Roxgold has completed a feasibility study for the Bagassi South project located in its Yaramoko concession in Burkina Faso, clearing the way for the expansion of gold production.

The study was conducted to evaluate the feasibility of a satellite underground operation at Bagassi South and an expanded processing facility at Yaramoko.

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Based on results of the study, the project is said to have after-tax net present value (NPV) at 5% discount of $50m, as well as an after-tax internal rate of return (IRR) of 53.2%.

The project, which has proven and probable mineral reserves of 170,000oz of gold at 11.54 grams per tonne (g/t) Au, is estimated to have average annual gold production of 40,000oz over a mine-life of 4.2 years.

“The economics of this additional high-grade feed source are highly accretive and generate increased cash-flow from a modest capital outlay.”

Roxgold president and CEO John Dorward said: “The Bagassi South expansion adds substantial value to Roxgold by increasing Yaramoko gold project gold production by approximately 40% to over 150,000oz in the near-term.

“Like the neighbouring 55 Zone, the economics of this additional high-grade feed source are highly accretive and generate increased cash-flow from a modest capital outlay.

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“In addition, work is already underway to extend the mine life at Bagassi South through the current infill and extensional drilling programme on the QV Prime structure.”

The projected pre-production capital required for the project is around $29.6m, including $7.9m for underground pre-production development.

Once the Bagassi South project is formally included in the company’s existing Yaramoko exploitation permit, a 10% interest in the project is likely to be transferred to the Government of Burkina Faso.