Mineral Deposits spending US$80m

Production and Markets

Publishing Date: 28 Jan 2010 3:28pm GMT
Author: Mining Journal

Mineral Deposits Ltd, the Senegal-focused gold producer, says it plans to spend US$80 million to increased production capacity at the Sabodala gold mine by a third to 200,000oz/y from the middle of 2011.

The company says the original plant was designed and constructed with future expansion in mind, having certain infrastructure in place to handle the increased throughput.

The planned expansion will see the plant’s nominal capacity doubled from 2Mt to 4Mt/y. The average output is expected to increase to 200,000oz/year following the upgrade, although the mine life will fall from 11 years to 7 years, based on existing reserves.

The mine produced its first gold bars in mid-March 2009 and is expected to announce production of 160,000oz for the full year to end-December, and expects 140,000oz this year.

Under the expanded rates, cash costs are expected to be reduced by at least 10% according to the company. In the three months to end-September the company reported gross cash costs of US$382/oz, excluding royalties.

In November 2008, the company reported a reserve for the project of 1.63Moz at 2.1g/t Au. The company says there is potential to increase the reserves including potential for underground mining.