Coffey Mining has completed an independent feasibility at Luiri Gold’s Dunrobin project in Zambia, which confirmed that the mine is technically feasible and economically viable in the current gold price environment.

At the request of potential debt funders, Luiri Gold commissioned Coffey Mining to complete an independent feasibility study of the project.

The study used a life-of-mine $1,300/oz gold price, which produced a positive internal rate of return of 18.2%, even in the current low gold price environment.

The mine is forecast to produce 77,000oz of gold over a six-year mine life, with initial capital expenditure of $21m and cash costs, excluding royalties, of $766/oz.

Luiri Gold chairman Melissa Sturgess said the Coffey Mining feasibility study verified the internal feasibility studies generated by the company in the last 12 months.

"Although the initial Dunrobin development anticipates modest production of 12,000oz-17,000oz per annum, it will satisfy the mining licence development conditions and provide the company with both the time and cash flow to unlock the full value of its underexplored 277km² mining licence holding," Sturgess added.

"We expect this report to accelerate our ability to finalise debt negotiations."

The development of the Dunrobin openpit mine and processing plant is the first phase of Luiri Gold’s development strategy to exploit the potential of its tenement holding.

Envisaged phase 2 developments include the possibility of building a moderate scale open-pit mine at Matala followed by deeper extraction of ore from underground.

The company said the advanced targets of Chosa and Shadreck, which are near to Dunrobin, will be further investigated for near surface ore that could be easily mined to extend gold production for a number of years.

Luiri Gold holds two mining licences in Zambia that cover the Dunrobin and Matala gold deposits.

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