Projects

Bankable Feasibility Study - Banfora Gold Project

On 31st January 2013, Gryphon released the results of the Bankable Feasibility Study conducted at its flagship Banfora Gold Project in Burkina Faso. The study demonstrated the viability of developing the project, and confirmed Banfora as economically and technically robust.

Highlights

  • Bankable Feasibility Study based on a conventional 2.0Mtpa CIL processing plant and open pit mining operation using contractor mining, upscalable to +4Mtpa at a later date.
  • Construction period of 15 months with first gold anticipated in Q4 2014.
  • BFS supports a maiden Ore Reserve estimate of 1.05Moz of gold.
  • Banfora Gold Project global Mineral Resource estimate increased to 4.9Moz gold.
  • 90% of the Resource and Reserve estimates are shallow – above 150 metres depth and remain ‘open’ – strong likelihood for further increases through ongoing drilling.
  • Work continues on delivering the project’s huge potential upside with the option to expand the plant to +4Mtpa in addition to drilling aimed at further increases in resources and reserves and new discoveries.
  • Key operating results of the BFS on a base case of US$1,300 gold price include:

 

The BFS was coordinated by Lycopodium Minerals Pty Ltd with input from various industry consultants.  Mine planning and mine designs were prepared by Cube Consulting Pty Ltd and financial modelling of the BFS outputs was undertaken by Corality Pty Ltd.  Metallurgical test work was completed by ALS-AMMTEC and supervised by Lycopodium whilst environmental and social impact assessments were carried out by a group of West African expert consultants including MBS Environmental and Intersocial Consulting.

The BFS proposes a contract mining operation and a conventional industry standard Carbon In Leach (CIL) 2Mtpa gold processing plant, along with associated infrastructure, to mine and process approximately 16.7Mt of ore from defined ore reserves over an initial eight-year period.  The plant has been designed for up scaling to +4Mtpa at a later date, potentially funded from project cash flows.

A gold price of US$1,300 was used for pit optimisations and base case financial modelling. Key commercial results of the BFS are presented below.

Banfora Mining Operation

Plant Design & Processing

The 2Mtpa processing plant includes a single stage milling circuit (SAG Mill) and conventional CIL gold recovery processes. The mill is designed for a 30/70 oxide/sulphide blend for the LOM and using a coarse grind of 106µm will result in average gold recoveries of 92.0%.

Gold grades will average 1.95g/t for the current 8 year LOM, with higher grades of 2.38g/t during the first 5 years which have a positive impact by reducing cash costs to US$734/oz (A$706/oz) which are at the lower end of industry standards.

The first deposit has been paid on the long lead item SAG mill and is currently in the detailed design phase with delivery time expected to be 60 weeks.

The plant has been designed to be up-scaled to +4Mtpa at a later date, potentially funded from project cash flows.  Comminution modelling and process plant layout design support a readily up-scalable operation through the addition of a Ball Mill and extension of the leaching circuit and associated support services.

Mining

The project will be mined by a mining contractor using open pit methods including drilling and blasting, excavation and haulage. Ore will be trucked from the three satellite deposits of Samavogo, Fourkoura and Stinger to the processing plant at the Nogbele deposit. Gryphon is preparing the tender for the mining contract which it expects to award in Q3 2013.

Infrastructure

Gryphon has already commenced negotiations with key initial site works contractors including road upgrades, construction accommodation and other temporary facilities.

Power for the Project is intended to be sourced from the grid in Cote d’Ivoire. Discussions with Burkina Faso and Cote d’Ivoire authorities are well advanced and a Memorandum of Understanding between all parties is anticipated to be signed this quarter.

Site evaluations for the power supply route are well advanced.

Raw water for the Project will be pumped to the plant site from a water harvest dam.  There is anticipated excess water capacity for the 2Mtpa process plant from average annual rainfall.

Huge upside potential

While Gryphon is focused on bringing Banfora into production, the company will also continue to work to unlock the huge potential that exists to deliver further upside. This work includes some of the following elements:

Resource and Reserve growth

Step out drilling around current pit designs and current infill drilling to convert resources to reserves, including 13m @ 69.9g/t gold from 19m (Incl. 4m @ 207.9g/t gold from 19m) and 14m @ 36.50g/t gold from 56m (Incl. 4m @ 125.1g/t gold from 65m) from the Nogbele gold deposit (Refer to ASX announcement of 24/09/2012 for full details). Excluded from the BFS economics were all inferred resources that sit within the current pit designs. At gold prices above US$1,300 further in-pit Resources and Ore Reserves are potentially defined as per the table below.

Depth extensions

Significant potential for depth extensions to both push the pits deeper as well as underground potential.  Only 10% of the current resources and reserve estimates sit below 150 meters vertical depth. Deeper drill results at Stinger for example include 17m @ 4.26g/t gold from 261m, 22m @ 3.19g/t gold from 119m, 5m @ 15.71g/t gold from 103m and 10m @ 8.67g/t gold from 141m indicate that high grade mineralisation continues at depth. (Refer to ASX announcement of 02/07/2012 and 13/11/2012 for full details).


Regional discovery

Our huge landholding of 1,200 square kilometres at Banfora Gold Project remains largely untested.  Several regional targets such as Ouahiri and Stinger require further drilling with anticipated resource growth, as well as several high priority soil geochemical anomalies that require first pass drilling in 2013.


Expandability of plant

Gryphon retains the option to upscale the initial 2Mtpa plant to a +4Mtpa operation with anticipated Ore Reserve growth. Comminution modelling and process plant layout design for the 2Mtpa circuit support a readily up-scalable operation to +4Mtpa through the addition of a Ball Mill and extension of the leaching circuit and associated support services. Importantly, this option enables production to continue on target, substantially lowers and de-risks funding requirements and enables future upgrades to be funded by cash flows from the existing operation.


Silver

There is potential for silver credits from the Banfora gold operation. Drill results of up to 10g/t Ag have been reported at the Nogbele deposit.  Any silver recovered in the process plant will form part of the gold doré and will result in credits applied at the time of refinement.


Heap leach studies

Initial metallurgical results showed excellent recoveries averaging +90% gold after only 45 days leaching time.  Gryphon is now undertaking detailed metallurgical heap leach testing which could potentially target low cost cash flows early in the project life. Results from detailed metallurgical test work are expected in Q2 2013 with a feasibility decision to follow.


West Africa Regional targeting

Ongoing exploration at high priority targets in Mauritania and Cote d’Ivoire have the potential to bring through a pipeline of new organic discoveries for Gryphon.

Based on the progress made by Gryphon in the development of the Banfora Gold Project, completing the definitive feasibility study drilling program supported by engineering and mine design, the project development timeline remains focussed on pouring first gold by the end of 2014.

For further details of the Bankable Feasibility Study at the Banfora Gold Project, please refer to the BFS Summary:
ASX Announcement 31/1/2013