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Centamin (LSE: CEY) (TSX: CEE) announced on Thursday results of a definitive feasibility study (DFS) for the Doropo gold project in Côte d’Ivoire that it believes underline a commercially viable mine with robust economics.
The project economics include a post-tax net present value of $426 million, a 34% internal rate of return and a 2.1-year payback period. According to Centamin, the IRR fulfills its hurdle rate of 15% at the $1450/oz. gold price used for mineral reserve estimation.
Total construction capital expenditure is estimated at $373 million, representing an increase of less than 7% from the 2023 prefeasibility study. Mining and processing operations remain consistent with the PFS, Centamin said.
“The results of the DFS demonstrate a robust project that meets Centamin’s investment criteria. The project shows a strong first five years with production in excess of 200,000 oz. per annum at an AISC below $1,000/oz, delivering an accelerated payback on investment,” CEO Martin Horgan stated.
Over the entire 10-year mine life, Doropo’s annual gold production is estimated at 167,000 oz. at an all-in sustaining cost of $1,047/oz. The production is supported by 1.88 million oz. of probable mineral reserves at an average grade of 1.53 grams per tonne of gold.
According to Horgan, the DFS has also resulted in a plan with significantly lower execution risk, relative to the PFS, reflecting a reconfiguration of the project to reduce its social impact on local communities.
This includes a significant reduction in the need for community resettlement from 2,000-3,000 persons as estimated in the PFS to less than 500, meaning no resettlement will be required during the construction period and the first two years of commercial operation, Centamin said.
The Doropo project currently comprises seven exploration permits covering an area of approximately 1,850 km2. Centamin first began work on the project in 2016, and it eventually built a gold resource base of 3.1 million oz. grading 1.26 g/t.
As part of the mining licence application with Côte d’Ivoire government, Centamin received its environmental permit for the project last month following submission of the impact assessment in Q1 2024.
The company said it had already completed extensive work during the DFS stage. The study, together with the environmental permit, will form key documents in support of its mining licence, for which it expects to submit applications in Q3 2024.
Following the award of the mining licence, Centamin will then make a final investment decision. Should it proceed, Doropo would become the gold miner’s second producing asset after the Sukari mine in Egypt.
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