Aurum unveils billion-dollar West African gold giant

Aurum Resources has muscled its way into the developer big league, delivering a stunning 1.21-million-ounce maiden probable ore reserve for its Boundiali gold project in West Africa that underpins a pre-feasibility study (PFS), projecting an 11-year mine life delivering an emphatic 1.5 million ounces of gold.

The company’s PFS outlines a technically robust and economically compelling large-scale open pit gold development that boasts a post-tax net present value of US$1.5 billion (A$2.14B) and an internal rate of return of 119 per cent.

The much-anticipated maiden ore reserve has landed at an impressive 42.1 million tonnes grading 0.9 grams per tonne gold for 1.21 million ounces of the heavy yellow metal and was derived from four open pit deposits at the project. Aurum says it represents an impressive 77 per cent conversion of its indicated mineral resources to probable ore reserves.

The PFS has outlined a 6-million-tonne-per-annum processing operation that will produce an average of 185,000 ounces of gold per year for the first five years of its life, with a whopping 201,000 ounces targeted in its first year.

The study used a consensus mean gold price of US$4076 (A$5821) an ounce, roughly in line with the current spot price. However, even using a more conservative gold price of US$2900 (A$4142) per ounce, the project still delivers an impressive post-tax net present value of US$553 million (A$790M) and an internal rate of return of 44.1 per cent.

The pre-production capital cost to get the mine up and running has been pegged at a modest US$342 million (A$488M), which includes a US$34.2 million (A$49M) contingency. The payback period is expected to be less than a year from commissioning, driven by the projected total of 923,000 ounces of gold production in the first five years.

Aurum’s Boundiali project lies in northern Côte d’Ivoire, a country that has fast become the belle of the ball for ASX-listed gold explorers. It sits within the globally renowned Birimian greenstone belt, a geological terrain that stretches across five West African countries, including Ghana, Mali, Burkina Faso and Guinea, and hosts a growing swarm of multi-million-ounce gold deposits.

Aurum’s project features enviable logistics, with sealed roads, grid power and an airport all within a good Aussie cooee. The presence of extensive historical artisanal workings throughout the company’s tenure is a classic pointer to near-surface gold across multiple trends that, a couple of years ago, would have been screaming “drill me” at first sight for the company’s geologists.

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