Toubani Resources (ASX:TRE) is working towards its end goal of reaching a Final Investment Decision (FID) for the Kobada Gold Project in Mali, West Africa.
Speaking to Mining.com.au ahead of Mines and Money Connect Melbourne on 14-15 June, Toubani Chief Executive Officer (CEO) Phil Russo says since he and his technical team joined the company in January, it has defined a strategy that focuses on the oxide strength of the asset.
“We are really blessed with quite a deep weathering profile here of almost 100m, and that’s a real advantage in terms of delivering a very strong project, both technically and economically.”
In the first 5 months of 2023 alone, the company defined an oxide-dominant strategy, established a Toubani-led exploration and development team, delisted from the Toronto Stock Exchange (TSX-V), increased the strike extent at Kobada to 11km, and added 2 senior mining executives to its board.
“We bolstered the technical team, and brought those skills into Toubani, who used to rely on external consultants. We simplified our listing structure because we had a dual listing, so we ceased our listing on the TSX-V as rapidly as we could, and we’re focusing on just one market for investors.
And then we made some new discoveries in this exploration program, so we’re really excited about that. To find a continuous structure right next to the current big resource, where we had no real drilling at Kobada West, was just a testament to how prospective our ground is.
It’s a big project with 3.1 million ounces and it just has the potential to get a lot bigger. And then we also strengthened our board, so we’ve added some big mining names to our board with 2 names that have got experience taking a project from here to the big leagues.
“The last thing we’re working on now in the coming weeks is the option analysis work of our 2021 DFS, that assesses whether this project can look a lot different, and that is even more compelling”
The last thing we’re working on now in the coming weeks is the option analysis work of our 2021 DFS, that assesses whether this project can look a lot different, and that is even more compelling.”
Throughout the second half of 2023, the company will update the Definitive Feasibility Study (DFS) completed in 2021, and will undertake resource conversion drilling at the project, while in 2024 the company will finalise a convention agreement, develop a funding plan, and drill out ‘high-priority’ targets. These activities are the building blocks towards a FID and the start of development slated for the first half of 2025, Russo says.
The current DFS for Kobada contemplates a 3 million tonne per annum throughput of oxide ore feed for the first 8 years at 100,000 ounces per annum. This will be followed by a combination of oxide and fresh run-of-mine (ROM), as well as stockpile feed from years 9 through to 16.
This DFS demonstrated a life-of-mine (LOM) all-in-sustaining-cost (AISC) of US$972 per ounce, including a material component of hard rock associated costs. Toubani reports it will be targeting a reduction in the AISC profile though a scaled, oxide-dominant LOM as part of optimisation workstreams. The company notes oxide dominant projects at scale offset grade and achieve wide operating margins with ‘strong’ cash flow profiles.
The CEO tells this news service that the option analysis will be rolled forward into the updated DFS for Kobada.
“We think the project can do more than 100,000 ounces a year of oxide only for a significant mine life, and we think those parameters mean it’s going to have a low all-in-sustaining-cost, which makes the project really different from other African development projects in our view.
That’s our target. That’s our vision, and that’ll be the second half of 2023. And then we’ll roll into 2023, where we’ve just got to finalise an agreement with Mali and look to position this asset with a funding plan and an execution plan during 2024.
But it would be remiss of me to not add in there that is all dependent on the stock being re-rated in parallel with us achieving these milestones. And we think by delivering an asset that doesn’t exist in the market, 150,000 ounces a year for a long life mine doesn’t exist in the sector for an oxide-only project, so that re-rate will come in parallel with that.
We don’t have any significant drill out plans in the foreseeable future, so we’re going to keep our capital structure pretty tight, and we think all those things mean a high share price.”
Toubani describes the Kobada Gold Project as a ‘large’ gold system with numerous near-surface targets including Kobada West, Kobada North 1 and 2, Gosso, and Kobada West. The company reports the 2023 drilling program extended the strike extent from 5km to 11km and identified new areas of gold mineralisation outside the current Mineral Resource Estimate (MRE).
In 2021, Toubani delineated a total MRE of 42.03 million tonnes @ 1.06g/t Au for 1.433 million ounces of gold. Additionally, over 44km of strike remains untested.
Russo tells Mining.com.au that it’s hard to convince him that Toubani’s current valuation is right for an asset like Kobada in any market condition, or any jurisdiction.
“I keep my story really simple, and that is we’re oxide-dominant, we’re free milling, we have scale, we’re permitted, and we’re low all-in-sustaining costs, and we’re underexplored, and we trade at $3 bucks an ounce. Peers trade at $17, and so that is a compelling opportunity for investors.”
Toubani Resources is an ASX-listed exploration and development company based in Toronto, Canada. The company is focused on developing a gold platform, primarily through its Kobada Gold Project in Southern Mali.
Write to Harry Mulholland at Mining.com.au
Images: Toubani Resources Inc