True Gold Mining (TGM.V) has released the results of its long-awaited feasibility study on the 90% owned Karma gold project in Burkina Faso. The FS roughly confirms the findings of the PEA last year and envisages an annual production of 97,000 ounces of gold at an All-In Sustaning Cost (AISC) of just $720/oz, which is excellent. As the initial capital expenditures are just $131.5M, the project has a very short payback period of less than 1.5 years at a gold price of $1250/oz.
The after-tax NPV5% comes in at $178M, and this is based on the current 950,000 ounces of gold in the oxidized layer of the deposit and could increase if the company would be able to find additional ounces. The project is extremely robust as the NPV still is positive at a gold price of just $1000/oz, and this might attract some other players who are keen to get involved in the gold mining business in Burkina Faso.
> Click here to read the press release
Disclosure: The author holds a long position in True Gold Mining. Please see our disclaimer for current positions.
