An updated prefeasibility study (PFS) for One Asia Resources’ Awak Mas Gold Project in Indonesia shows improved economics for the main deposit and two satellite deposits. There have been material improvements in capex, cash cost and net present value (NPV).
The updated PFS is based on the same mine plan as the PFS released in March 2015. The project is held by One Asia under a seventh generation Contract of Work, which covers an area of 14,390 hectares and allows for a construction period of three years and an operating period of 30 years.
The revised pre-production capital cost is estimated at US$161 million, down from US$198 million as reported in the previous PFS. Estimated C1 cash costs are now US$496 per ounce, down from $565 and all in sustaining costs are US$535, down from $745.
The revised NPV, after taking into account the capital and operating cost adjustments, is estimated at US$231 million based on a US$1250 per ounce gold price and a 7.5% discount rate.
This is up from the US$166 million reported in the previous PFS for the same gold price and discount rate. It also retains the pit design and physical parameters re used in the 2015 study.
The revised IRR is estimated at 49%, up from 34%. The payback period is year two of operations, which is one year better than the 2015 PFS, with a two-year mine construction phase.
The production target in the updated PFS is:
- Resource – 60.6 million tonnes @ 1.45 grams/tonne (g/t) gold for 2.3 million ounces.
- Mine/treated – 23 million tonnes @ 1.55 g/t gold.
- Treatment rate – 2.5 million tonnes/annum.
- Mine life – 10 years
- Gold recovered – 1.02 million ounces.
The mining inventory on which the production target is based is derived from 89% measured and indicated resources and 11% inferred resources.
One Asia says capital costs have been reduced owing to material reductions in industry costs, particularly in a number of areas associated with pre-strip, earthworks and inputs for plant construction. Further reductions have been made possible through engagement with credible local supply and construction suppliers, reflecting the significant fall in mining construction activities and equipment pricing since the 2015 PFS estimate was prepared.
Substantial capital and operating cost savings from recent market price reductions in major consumables such as fuel and cyanide have also been recognised.
Operating costs have benefited from price reductions in major consumables such as fuel and cyanide. In addition, local costs have also reduced due to the depreciation of the Indonesian Rupiah compared with the US dollar.
Meantime, the alliance established with Provident Capital Partners Pte Ltd in May 2015 continues with its objective of resolving the IUP dispute over the Pani Gold Project. The Marisa Court decision in January 2016 was mostly supportive of One Asia but appeals subsequently lodged by both sides. A decision is expected by the end of June.