Toubani Resources (ASX:TRE) has confirmed the Kobada Gold Project in southern Mali as a “highly attractive” oxide gold asset after completing a Definitive Feasibility Study (DFS).
Due to Kobada’s scale and free-dig, simple processing, and oxide resources, the DFS has shown the potential for “strong” financial metrics, according to Toubani. The study indicates the mine will produce more than 160,000 ounces of gold on average over its nine-year mine life.
Toubani, which has a market capitalisation of $62.66 million, reports the DFS also places Kobada as one of the lowest capital intensity development projects in the sector — with an initial upfront capital of US$216 million ($328.72 million), including US$18 million in contingency.
Kobada would have a post-tax net present value (NPV) of US$635 million ($966.23 million) and an internal rate of return (IRR) of 58% based on a gold price assumption of US$2,200 per ounce.
Toubani adds there is “significant” upside at current gold price levels with post-tax NPV increasing to US$897 million with an IRR of 73% based on the gold price assumption of $2,600 per ounce.
Further, the study estimates all-in sustaining costs of US$1,004 per ounce and C1 cash costs of US$825 per ounce, on the basis of the current cost environment. The company notes this underpins “strong” average annual operating cash flows of US$158 million per year.
Managing Director Phil Russo says Kobada’s key attributes are the resource of near-surface mineralisation and the free-dig and free milling oxide ore reserves — which totals 1.26 million ounces.
“The strategy to update the Kobada Feasibility Study was driven by our belief that the Kobada Gold Project is a unique and rare development asset that has yet to reveal its true potential,” Russo says.
“The economic leverage of a low capital and operating cost project is seen in the financial outcomes of the DFS with a rapid payback of 1.5 years at significantly lower gold prices than today’s spot prices.
“While Kobada is clearly strong today, numerous opportunities to enhance the Kobada DFS have been identified and are being pursued to further enhance our already lean capital and operating cost profile, while in parallel our exploration strategy to define additional high-value oxide growth targets to supplement, and potentially increase production, is set to commence.”
Russo adds the company is confident the project can succeed in West Africa today with the DFS establishing a solid platform for Toubani to continue building momentum.
Toubani is now seeking several opportunities to optimise capital and operating costs, including conducting confirmatory testwork to validate the processing flowsheet and reduce capital.
The company will also aim to uncover opportunities to self-perform construction of non-process related infrastructure to further reduce costs and improve the schedule, as well as undertake geotechnical and hydrological studies to refine mine design to improve stripping ratios and reduce mining costs.
A resource drilling program is ready to begin, with the aim of focusing on delineating additional high-margin oxide mineralisation along the 50km prospective structures. The program will also test for depth extensions below the DFS pit design and current extent of the resource estimate.
Toubani is working on de-risking Kobada towards shovel-ready status in 2025. The company is well-funded to advance its strategy with $10.5 million cash at hand.
Toubani Resources is an explorer and developer focused on advancing Africa’s next gold development project with its oxide-dominant Kobada Project.
Write to Aaliyah Rogan at Mining.com.au
Images: Toubani Resources
