Defiance makes progress in Mauritania

The government of Mauritania has granted Defiance Mining (DM-T) an exploitation permit for its Tasiast gold project, east of the port of Nouadhibou.

The permit is for 312 sq. km surrounding the Tasiast deposit. It is valid for 30 years but can be extended in 10-year increments.

The permit allows Defiance to build a mine and proceed with development. Additional permitting would be required for any work outside the permit area, including access roads from the main highway and construction of a water pipeline.

A scoping study at Tasiast suggests annual production of around 120,000 oz. at an average cash cost of less than US$185 per oz. for seven years. Initial capital costs are estimated at US$37 million; another US$11 million in sustaining capital would be required.

In October, on the back of about 28,000 metres worth of reverse-circulation and core drilling, Defiance tabled an updated resource figure for Tasiast. ACA Howe International pegged the measured and indicated resource at 12.1 million tonnes grading 3.1 grams gold, or 1.2 million contained ounces of gold. The estimate is based on a cutoff grade of 1 gram gold per tonne. About 65% of the tonnes are found in primary mineralization; the balance is oxide ore. An additional 12.4 million tonnes of inferred material runs 2.25 grams gold.

The updated resource estimate includes 172,000 oz. of gold re-classified to the indicated resource category from a September estimate that had them as inferred resources. Resources at Tasiast extend to a depth of 180 metres, and the deposit remains open at depth and along strike. Gold mineralization at Tasiast is hosted by a banded iron formation.

The Tasiast deposit comprises two main zones: the 4.8-km East Branch and the 2-km West Branch. So far, Defiance’s efforts have been focused on the East Branch’s central high-grade zone, known as Colonne Piment. Combined, the Colonne Piment and South Piment zones constitute nearly all the project’s previously tabled indicated resource and about two-thirds of the inferred resource.

Metallurgical tests on primary and oxide ore from Tasiast by SGS Lakefield Research indicate gold recoveries of 94-95%. Results from hydrological drilling are expected later this month. The work is part of an ongoing bankable feasibility study slated for completion during the first quarter.

News of the permit had shares in Defiance up a nickel, or more than 8% higher, in afternoon trading in Toronto on Jan. 15. The shares trade in a 52-week range of 5-77.