Pre-feasibility study confirms 3.1 Moz Reserve at Wits Gold’s flagship DBM Project
June 13, 2012: Johannesburg, South Africa - Witwatersrand Consolidated Gold Ltd. (Wits Gold - Stock Profile - TSX:WGR) announced the completion of a positive pre-feasibility study (PFS) on its De-Bron Merriespruit (DBM) Project, situated in the southern Free State goldfield of the Witwatersrand Basin. Among the positive developments that were highlighted by the PFS was the delineation of a Probable gold Reserve of 23.5Mt at a grade of 4.05g/t Au (3.1Moz). These Reserves are contained within the Project’s Indicated Resources of 26.7Mt at 5.8g/t Au (4.99 Moz).
Summary of PFS highlights:
- Indicated Resource of 26.7Mt at 5.8g/t Au (4.99 Moz), containing Reserves of 23.5Mt at 4.05g/t Au (3.1 Moz).
- Average annual gold production of 200 000oz over an 18-year life of mine.
- Production cash costs of US$628/oz.
- First gold production 47 months after shaft sinking commences.
- Peak capital funding of ZAR2.37 billion (US$296 million at ZAR8/US$)
- At ZAR400 000/kg Au (US$1 555/oz & ZAR8/US$) pre-tax NPV(5%) ZAR7.3 billion (US$909 million), IRR 28.0%.
- Shallow underground mine design comprising a twin shaft system to 660 metres.
- Semi-mechanised option increases IRR to 30.9% (at the above prices) and pre-tax NPV(5%) to ZAR10.2 billion (US$1.3 billion).
- Additional shallow Inferred Resources of 5.97Mt at 5.7g/t Au (1.1Moz) readily mineable from current mine design – this will be prioritised during feasibility drilling.