If the results of Canadian mining company Osino Resources’ preliminary economic assessment (PEA) for its Twin Hills Gold Project in the Karibib vicinity are anything to go by, it signifies one of the most significant gold discoveries in southern Africa in recent years.
The PEA, published by Osino last week, indicates the discovery of a gold resource with a potential value of N$5.5 billion (US$377 million) based on an assumed gold price of US$1 700/oz.
The Twin Hills PEA envisages a 1.4 million ounce mine with an estimated 15-year lifespan. The mine is expected to reach an annual production of 124 000 ounces by year two of operations.
It is located approximately 20km from Karibib or 150 km from Windhoek and lies within the prospective Damara sedimentary mineral belt which includes the Navachab and Otjikoto gold mines. Navachab was sold by AngloGold Ashanti in 2014 to another Canadian producer, QKR, while
B2Gold at its Otjikoto mine has invested nearly N$4.4 billion and last year produced 178 000 ounces or roughly 20% of the group’s total gold haul for 2020.
“Twin Hills is a sedimentary hosted, structurally controlled gold deposit that fits the broad orogenic model and is amenable to conventional open-pit gold mining and carbon-in-leach metallurgical processing,” reads Osino’s report.
The Canadian miner added that the project is being rapidly advanced through accelerated exploration drilling and fast-tracked development studies. It said that the PEA was prepared by Lycopodium Minerals Africa in accordance with Namibia’s mineral laws and contemplates a low-risk, technically simple open-pit mine utilising contract mining and feeding a conventional carbon-in-leach metallurgical plant processing 3.5 million tonnes of mineralised material per annum.
Heye Daun, Osino’s co-founder, president and CEO commented: “We are very pleased with the results of this PEA which demonstrates that Twin Hills is what we always said it would be, namely a simple, economically robust and attractive open pit gold project with significant upside. It is geologically consistent, metallurgically simple and technically low risk with low capital intensity and significant future upside.
“We are proud to have been able to deliver this PEA within less than two years of discovery and our vision for the next two years is to unlock its true upside potential and to advance the project to the construction stage.”
Osino’s financial model for the project was completed on a 100% project basis and includes a 3% gross royalty and 1% export levy to the Namibian government.
The report reads: “The economic analysis carried out for the project uses a cash flow model at a base gold price of US$1 700 per ounce gold and a 5% discount rate. The financial assessment of the project was carried out on a 100% equity basis, not accounting for potential sources of funding which may include debt. No provisions were made for the effects of inflation, and Osino’s understanding of current Namibian tax regulations were applied to assess the tax liabilities.”
The anticipated infrastructure for the Twin Hills Gold project has numerous facilities including mine dry facilities, an equipment maintenance workshop, refuelling facilities and office administration blocks. The project will also need access roads, stockpiling areas, stormwater handling facilities, water supply, power supply network, diesel generators, a sewage treatment plant and waste management facilities.
Osino has applied to NamPower to connect to the national power grid and an application has also been made to NamWater to supply any possible shortfall in supply with bulk raw water from the Swakoppoort Dam’s existing pipeline connection with Karibib, which also supplies the Navachab Mine.
Various site visits by the Osino Project team were conducted in early 2021 in conjunction with preliminary civil engineering investigations.
Online publication, Moneyweb, recently quoted Daun as saying: “We figured that if we started searching along strike of the producing Navachab Gold Mine in Namibia, we would find a continuation of an already well proven gold resource – and that’s exactly what we found.”
– ebrandt@nepc.com.na