- Pre Tax Project NPV(8%) = $548M -
- Pre Tax Project IRR = 23.3% -
TORONTO, May 3, 2012 /CNW/ - Volta Resources Inc. ("Volta Resources" or the "Company") (TSX: VTR) announces the results of a pre-feasibilty Study (the "Study") carried
out on the Kiaka Gold Project ("the Project") in southern Burkina
Faso. The Study was carried out by independent consultants, Tetra Tech
Wardrop ("Tetra Tech") out of Swindon in the UK. The Study discusses
scope, design features and the economic viability of the Project. All
references to currency are in USD unless otherwise noted.
The independent Study for the Project demonstrates a robust gold
development opportunity with the following highlights:
Proven and Probable Mineral Reserves of 126.08 million tonnes at a
diluted grade of 0.96 g/t Au for 3.89 million ounces, representing a
conversion from Measured & Indicated Mineral Resources to Proven and
Probable Mineral Reserves of 96%.
A base case evaluation using:
Owner mining 12 million tonnes per annum of gold ore from a single open
pit in the Kiaka Central Area at a strip ratio of 2.95:1,
Crushed and processed in two parallel trains of 6 million tonnes per
annum, each comprising Semi-Autogenous ("SAG") mill, Ball mill and
Carbon in Pulp ("CIP") leach circuit achieving an average metallurgical
recovery of 89.84%,
Annual production of 340,000 ounces of gold per year over a life of mine
of 10.3 years.
Initial capital costs of 609.7 million
Average on-site operating costs of US$ 671/ounce.
Pre-tax NPV of 548 million, assuming a 1,372 per ounce gold price and an
8% discount rate,
Pre-tax IRR of 23.3% with a 4.3 year payback on initial capital.
Kevin Bullock, Volta's President and CEO, said, "These are monumental
results for Volta that widely exceeded our expectations and place Volta
firmly on the path to production. It's notable that the strong
economic benefits arise from conservative assumptions and, along with
numerous options for optimization, we are confident that we can make
these numbers even more powerful. We will continue our aggressive pace
toward production. We will continue drilling our new high grade
deposit and conclude various technical tasks in order to begin a
feasibility study as soon as possible."
The Study is based exclusively on the mineral resources defined in the
Kiaka Central Area. Drilling undertaken 750 metres south of the Kiaka
Central Area has identified the potential for an open-pit high grade
satellite resource (see press release of February 14, 2012). The
drilling has so far identified continuous high grade mineralization
over a strike length of more than 175 metres to a vertical depth of 60
metres. In addition, potential parallel high grade zones, arranged en
echelon, have also been intersected. The Company is currently drilling
this target with a view to defining a maiden mineral resource estimate
at the Kiaka South Area in early Q3 2012. The close proximity of a
possible high grade satellite resource offers the project the
opportunity for commencing production at a considerably higher grade.
Currently the Kiaka South Area is not included in the Company's mineral
resources estimates, mineral reserve estimates or in the Study.
Mandating of Financial Advisor
The scale and robustness of the Project has resulted in multiple
expressions of interest from a range of banks and project finance
advisory groups seeking to assist the Company in exploring appropriate
financing arrangements for the project. Following review of proposals
submitted, the company is pleased to announce that it has selected
Standard Bank to provide advice on securing the financing for the
Standard Bank's Head of Mining, Energy & Infrastructure Lending, Don
Hultman, commented: "We are delighted with the opportunity to work with
Volta's experienced management team to ensure the successful funding
and development of their Kiaka Gold Project. Kiaka is proving to be one
of the most exciting new gold projects in West Africa, with a
considerable resource, strong annual production and potential for
economic upside from identified satellite resources."
Engagement of Whittle Consulting to undertake optimization studies
The Study has identified a number of opportunities to significantly
optimize the Project. Volta has engaged Whittle Consulting to
undertake a Project optimization study to highlight areas to focus on
during the Definitive Feasibility Study. The main benefit of Whittle
Consulting's approach lies in its unique ability to optimize all parts
of the business together. Novel philosophy and methodology are applied
by highly experienced personnel, backed by advanced proprietary
software ("Prober") developed in stages over the past twenty five
years. This will enhance cash flow in the early years, thereby further
improving NPV and reducing the payback period to provide stronger
This prefeasibility study has been completed to National Instrument
43-101 (NI 43-101) reporting standards, discusses scope, design
features and economic viability of the Kiaka Gold Project (the
Project), located in Southern Burkina Faso.
Key Project Data (assuming US$ 1,372 / ounce of gold)
Total Material Mined
Total Mill Mill Feed Processed
Open Pit Mine Life
Average Strip Ratio
Average Diluted Grade
Average Gold Recovery
Average Annual Tonnes Processed
Average Annual Production
2.95 : 1
* Volta Resources' ultimate ownership of the Project is 81%, with a
local Burkinabe Company holding 9% as a particpating partner and the
Burkina Faso state owning a 10% free carried interest.
* Project economics are pre-tax.
Tetra Tech worked with additional qualified consulting companies that
have taken responsibility for various portions of the Study. The areas
of responsibility for each consultant are listed below:
Tetra Tech (UK) - Overall project management, mineral reserves, mining
methods, metallurgical design, all mine infrastructure, environmental
summary, economic analysis, capital and operating costs pertaining to
mining, processing and infrastructure, including general and
administration costs (G&A) costs.
Energy and Power Consultants Ltd. (E&P) (UK) - Mine power solution
comprising of an option study investigating potential alternatives
including grid supply, photovoltaic (PV) and light fuel oil (LFO) and
heavy fuel oil (HFO) options.
SRK Consulting (UK) Ltd. (SRK) - Drilling, sample preparation and
security, data verification, mineral resource estimates, hydrology and
hydrogeology and geochemistry. SRK are also conducting the
Environmental and Social Impact Assessment (ESIA) as a concurrent body
SRK completed an independent mineral resource estimate for the Kiaka
Central Area in March 2012 (see press release March 21, 2012). The
results are summarized in the table below:
Mineral Resources *
* NI43-101 Resource estimate completed by SRK Cardiff in March 2012
* Cut-off grade of 0.60 g/t applied
* Whittle shell of $1,400 /oz used
* Mineral Resources that are not mineral reserves do not have demonstated economic viability
Tetra Tech applied the Lerchs-Grossman optimization algorithm using
Gemcom Whittle-4D V4.4 Software™ to evaluate the mineral resource model
provided by SRK. Assumptions used were prevailing mining, process and
G&A costs, an average CIP gold recovery based on existing test work,
pit slopes recommended based on a visual assessment, a designed
production rate of 12 million tonnes per annum of ore for 365 days and
a gold price of $1,372 per ounce. A pit design was completed guided by
the results obtained from Gemcom Whittle™. The diluted Proven and
Probable Mineral Reserve estimated by Tetra Tech within a final open
pit are given in the table below:
Total (Proven & Probable)
Total Waste Mined
* Mining Recovery of 97% and dilution of 5% applied
* Cut-off Grade of 0.40 g/t applied
* Selling price of gold used US $ 1,372 / oz
Tetra Tech designed an optimum open pit with final dimensions of 860 x
1,360 metres to a depth of 440 metres and starter pit and a three stage
pushback phased mining plan. The plan anticipates an average production
of 33,000 tonnes per day (of gold ore) and a plus 10-year LOM
production of 126 Mt (of gold ore).
A total of 373 Mt of waste will be stored in either low grade mineral
waste dumps or grade strategic stockpiles adjacent to the open pit.
Open pit mining operations will be conducted by conventional
drill/blast and load/haul using 177 tonne ore trucks, 177 tonne waste
trucks and shovels on initial 12 metre benches for waste and 6 m
benches for exploitation of mineralized zones.
Mineralogical test work has established the chemical and physical
properties of the ores. Dynamic leach test work established that the
gold is largely disseminated as free gold on grain boundaries or micro
fractures, with little association with sulphides, indicating that the
gold is 'free milling' non refractory ore, with significant liberation
occurring at a grind size of approximately 80% passing 75 microns (µm).
Metallurgical test work has investigated, crushing and grinding, as well
as preliminary investigations of high pressure grinding roller (HPGR)
crushing and SAG grinding. Combinations of gravity concentration,
flotation concentration and cyanide leaching have all been tested based
on well-established non-refractory gold process flowsheets.
Tetra Tech has made a comprehensive comparison of six different process
flowsheet options identified in the scoping study to process a design
throughput of 12 million tonnes per annum (Mt/a). The objective of
this comparison was to identify the lowest cost, lowest energy and
highest gold recovery flowsheet.
The options considered in this study were:
Base Case - Conventional crushing followed by grinding and carbon in
HPGR - Conventional and HPGR crushing followed by grinding and CIL.
Gravity - Conventional crushing followed by grinding, gravity
concentration, intensive cyanidation and CIL.
Flotation - Conventional crushing followed by grinding, flotation and
CIL of concentrates.
SAG CIL - SAG milling followed by CIL.
SAG CIP - SAG milling followed by leaching and CIP.
Capital costs for each option were established by creating mass and
water balances and an equipment list.
The evaluations of these flowsheets were conducted solely on gold
recovery based on available test work results, capital cost, operating
cost and installed power. The results from this study concluded that a
SAG CIP would provide the most cost effective solution and is briefly
Run of Mine (ROM) is processed by a single closed circuit jaw crusher,
operating seven days a week to produce a P80 product of -300
millimetres. The crusher product will be delivered, by conveyor to a
crushed ore stock pile, with two full day's operation capacity.
The stockpile will feed two identical process trains incorporating
SAG/ball milling and CIP leaching. The double train configuration,
each capable of handling 50% of the process feed, will enable the
opportunity to phase the plant construction reducing initial capital
investment. On completion of construction, the twin-train arrangement
will also provide the added operational stability of a 50% downturn,
during times of campaign maintenance or unforeseen downtime.
The mill plant is designed to operate 365 days a year processing 12
million tonnes per annum, which equates to 34,607 tonnes per day, with
an overall plant utilisation of 95%.
The SAG mills which are in closed circuit with an inline pebble crusher,
will feed a ball mill with F80 1.7 mm material. Each ball mill is in
closed circuit with classifying hydroclones which will deliver material
to the CIP leaching circuit at a rate of 4,542 cubic metres per hour.
The mill circuit will feed two trains of 12 leach tanks followed by six
carousel-type CIP pumpcells. Each pumpcell unit contains approximately
15 tonnes of carbon and one unit per carousel arrangement is emptied
approximately every two days.
The carbon is then pressure stripped with a 145 Degrees Celsius (°C)
caustic solution to re-dissolve the precious metals into a high grade
(HG) pregnant solution which flows through six 3.54 cubic metre
conventional electrowinning cells, in parallel. Each cell will contain
33 cathodes (stainless steel basketless) and 35 anodes (stainless steel
punch plate) to produce cathodes suitable for direct smelting on site.
The precious metal sludge which forms on the cathode, is recovered as
filter cake, before being treated in an electric drying oven at
temperatures up to 450°C for 10 hours.
The dried and partially calcined, sludge is then mixed with fluxes and
fed to a diesel fired tilting induction furnace at a temperature of
1,050°C. Doré gold bars are subsequently cast into 25 kilogram moulds
and cleaned before being sampled. Over the LOM an average of 7.99 doré
gold bars will be poured per week and transferred to a vault for later
transport to the refinery.
Based on the proposed mining schedule the total LOM production would be
126.08 Mt at approximately 12 Mt/a. Over the life of the mine the
total gold content held within this material is 3,888Koz Au, which
takes in to account the proposed heads of 1.3 and 0.7 g/t Au for the
two different ore types being processed. The expected gold recovery is
89.84% Au which will produce an estimated 3,493,000 ounces of gold over
The Project will be developed over an approximate area of 24 km2 that will require a number of infrastructure elements, which will
generally be constructed at the early stage of the operation. The most
important components are as follows:
Tailings Management Facility (TMF).
Access road from the nearby county road to the mine site.
Internal road network connecting the open pit, mine facilities and the
Perimeter security fencing with guard houses.
Flood control dam with a clay core, to prevent flooding of the open pit
from the adjacent Nakambé River.
Raw water management infrastructure, including a network of drainage
ditches, dewatering wells around the open pit, pumps and water storage
Fresh water supply to treat and distribute process, potable and fire
water, including pumps, a pipe network, water treatment plants and
Water treatment infrastructure, including detoxification and sewage
Waste management systems for sewage and domestic waste disposal.
Fuel storage and distribution facilities.
Power supply and distribution system, including HFO storage tanks and a
HFO power generation plant.
Explosive storage facility with safety berm and perimeter security
Temporary and permanent camps with recreation area.
Process plant with overhead cranes, electrical rooms, heating,
ventilation, and air conditioning (HVAC) system, storages, laboratory,
toilets, offices and a rooftop helicopter landing pad.
Ancillary structures, including administration, heavy vehicle workshop,
warehouse and laboratory buildings.
Capital and Operating Costs
Tetra Tech used standard industry practices, including consultations
with engineers, procurement specialists and cost estimators along with
input from Volta (Owner's costs) in arriving at an initial capital
expenditure (CAPEX) estimate of $609.7 million including an overall
contingency of 10% of direct costs. The CAPEX does not include
escalation of costs, interest payments, exchange rates, scope changes,
schedule or permit delays, or taxes.
A summary of the CAPEX is provided in provided below:
Project Capital Area
Mining & Pre-production development
Tailings Management Facility
Total Direct Costs
Total Indirect Costs (including Owner's Costs)
Using the same criteria, Tetra Tech have estimated a total sustaining
capital cost of US$230.5 million starting during the first full year of
production (Year 1) and running over a 10-year period.
Tetra Tech calculated a total operating expenditure (OPEX) of $18.30 per
tonne (/t) (of ore) which includes a mining cost of $6.40 per tonne,
processing cost of $10.90 per tonne and an all in G&A cost of $1.00 per
tonne. A summary of the operating costs is provided below:
US $/t milled
General & Administration
Total Direct Costs
This translates to cash operating cost of US$ 671 per accountable ounce
The current environmental and social baseline investigations have been
completed under the management and supervision of SRK. They include
the following aspects:
Environmental Studies - Geology and geomorphology, soils, land use,
climate, water, ecology and biodiversity, air quality, noise and
Social Studies - Socio-economic indicators including, demography,
migration, housing and settlements, health, gender, education and
literacy, livelihoods, living standards, social infrastructure,
communications, cultural heritage, archaeology.
The SRK Scoping Report also described the regulatory framework for ESIA
within Burkina Faso together with international obligations for the
project. These include the Equator Principles, utilised by the
majority of lending banks, the International Finance Corporation (IFC)
Performance Standards (PS) and World Bank Environmental Health and
Safety (EHS) guidelines, which are generally considered to be best
international practice and the Treaties and Conventions that are
relevant to the Project development. The baseline studies undertaken
satisfy the regulatory requirements and meet the standard expected by
the Equator Principles and the IFC Standards. Currently the IFC is an
equity shareholder of the Company.
Tetra Tech has completed a base case, 100% equity, pre-tax, economic
analysis of the Project based on the following:
Price of gold - $1,372 per ounce
Total LOM production of 126.08 Mt of ore.
Average diluted grade of 0.96 g/t Au and average recovery of 89.84% Au.
Total of 3,493 Koz Au recovered over the LOM and a mean of 340,000oz Au
recovered per year.
LOM at mine revenue of $4,451 million with a total OPEX of $2,292
million and a total CAPEX of $840 million (including sustaining
The resulting discounted cash flow NPV at 8% is $548 million; the IRR is
23.3% and the payback period is 4.3 years.
In addition to the possible impact on overall economics that could
result from variations in CIP recoveries or ore grades, sensitivity
analyses show that the project economics are particularly sensitive to
changes in gold price with lesser influence from operating and capital
costs. It is apparent that increases in gold price would have a very
significant positive impact on profitability of the Project.
Tetra Tech has provided a project execution schedule that includes
studies, financing periods and project execution leading to
commissioning and production ramp up to steady state. Tetra Tech has
recommended traditional Engineering, Procurement and Construction
Management (EPCM) with a timetable that runs from January 2013 until
start of production in February 2015.
Recommendations & Conclusions
Tetra Tech concludes that the Project is economically viable and
recommends that the Project proceeds to a feasibility study contingent
on completion of site and mine geotechnical evaluation and further
metallurgical test work as detailed in this report.
Exploration drilling, conducted by Volta during the duration of this
study, has identified mineralised extensions to the south of the
proposed pit area that could be evaluated in the subsequent study
phases. The potential contribution of this extension is currently
Based on the recommendations and conclusions Volta Resources will
immediately send out Requests For Proposals ("RFP's") to carry out a
Definative Feasibility Study.
A copy of the NI 43-101 technical report for the Study will be posted on
SEDAR within the next 45 days.
Volta Resources will be engaging in a search for a new CFO to replace
Mr. Alan Rootenberg, who will be persuing a new career opportunity.
The Company wishes to thank Mr. Alan Rootenberg for his tireless
efforts to date and wishes him success in his future endeavours.
About Volta Resources
Volta Resources has a portfolio of quality gold exploration projects in
Burkina Faso and Ghana, both mining-friendly West African jurisdictions
with proven world-class gold deposits. VTR will focus on fast-tracking
its flagship Kiaka Gold Project (NI-43-101 compliant resources include
90.29 million tonnes @ 1.04 g/t Au for 3,018,000 ounces in the Measured
and Indicated categories and 38.52 million tonnes @ 1.00 g/t Au for
1,260,000 ounces in the Inferred category [Please see VTR press release
dated June 29, 2011] including 34.38 million tonnes @ 1.04 g/t Au for
1,145,969 ounces of gold in the Proven category and 91.70 million
tonnes @ 0.93 g/t Au for 2,742,353 ounces of gold in the Probable
category [Please see current VTR press release]) towards a development
decision, aiming to complete a Feasibility Study in Q1, 2013. Recent
acquisition of properties around Kiaka have provided VTR with an
extensive ground position along the highly prospective Markoye Fault
Corridor in an important emerging gold province.
About Standard Bank
Rooted in Africa with strategic representation in key sub-Saharan and
other emerging markets, Standard Bank is a bank with a global sweep. A
mainstay of South Africa's financial system for over 145 years, its
international expansion has taken it to 18 countries on the African
continent and 16 countries outside Africa including Brazil, Russia and
China. Its headquarters are in Johannesburg and it is listed on the
Johannesburg Stock Exchange. Standard Bank's Corporate and Investment
Banking division is a leading global emerging markets corporate and
investment bank and offers its clients banking, trading, investment,
risk management and advisory services in developing economies
throughout the world. It has specific sector expertise in mining &
metals; oil, gas & renewables; telecommunications & media; power &
infrastructure and financial institutions.
Standard Bank Plc in London is the bank's principal international
subsidiary. It is authorized and regulated by the Financial Services
Authority, and is a member of the London Stock Exchange, the London
Bullion Market Association, the London Metal Exchange, the London
Platinum and Palladium Market and the New York Mercantile Exchange
(COMEX Division). For further information, visit: www.standardbank.com/cib.
This Study was prepared by Tetra Tech under the supervision of Jon
Priest, C.Eng MIMMM, who ia a "qualified person" under the standards
set forth in NI 43-101. Guy Franceschi, VP Exploration, was the
Company's designated Qualified Person for the purposes of the Study.
All parties have reviewed and approved their respective content of this
Forward Looking Information Caution:
This press release presents "forward-looking statements" within the
meaning of Canadian securities legislation that involve inherent risks
and uncertainties. Forward-looking statements include, but are not
limited to, statements with respect to the expected development of the
Kiaka Project based on the results of the pre-feasibility study, future
price of gold and other minerals and metals, the estimation of mineral
reserves and resources, the realization of mineral reserve estimates,
the capital expenditures, costs and timing of the resources, the
realization of mineral reserve estimates, the capital expenditures,
costs and timing of the development of Kiaka central area as well as
new areas, success of exploration activities, permitting time lines,
currency exchange rate fluctuations, requirements for additional
capital, government regulation of mining operations, environmental
risks, unanticipated reclamation expenses, title disputes or claims and
limitations on insurance coverage. Generally, these forward-looking
statements can be identified by the use of forward looking terminology
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or variations of
such words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be
achieved". Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of Volta
Resources to be materially different from those expressed or implied by
such forward looking statements, including but not limited to: risks
related to international operations, risks related to the integration
of acquisitions; risks related to joint venture operations; actual
results of current exploration and pre-feasibility activities; actual
results of current or future reclamation activities; conclusions of
economic evaluations; changes in project parameters as plans continue
to be refined; future prices of gold and other minerals and metals;
possible variations in ore reserves, grade or recovery rates; failure
of equipment or processes to operate as anticipated; accidents, labour
disputes and other risks of the mining industry; and delays in
obtaining governmental approvals or financing or in the completion of
development or construction activities. Although the management and
officers of Volta Resources believe that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions
and have attempted to identify important factors that could cause
actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be
no assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. Volta Resources does not
undertake to update any forward-looking statements that are
incorporated by reference herein, except in accordance with applicable
SOURCE Volta Resources Inc.
For further information:
For further information, please refer to our website www.Voltaresources.com or contact:
Kevin Bullock, P.Eng., President & CEO
Tel: (647) 388-1842
Fax: (416) 867-2298
Andreas Curkovic, Investor Relations
Tel: (416) 577-9927