The government of Mauritania has awarded Defiance Mining (DM-T) an exploitation permit for its Tasiast gold project, 170 km east of the West African nation’s main port of Nouadhibou.
The permit covers 312 sq. km surrounding the Tasiast deposit and is valid for 30 years, but can be extended in ten-year increments several times.
The permit allows Defiance to build a mine and proceed with development at the project. Additional permitting would be require for any work outside the permit area, including access roads from the main highway and construction of a water pipeline.
A scoping study at Tasiast suggests annual production of around 120,000 oz. at an average life-of-mine (about 7 years) cash cost of less than US$185 per oz. Initial capital costs are estimated at US$37 million. Another US$11 million of sustaining capital would also be required.
In October, on the back of about 28,000 metres worth of reverse-circulation and core drilling, Defiance tabled an updated independently prepared resource figure for Tasiast. ACA Howe International pegged measured and indicated resource at 12.1 million tonnes grading 3.1 grams gold, or about 1.2 million contained ounces of gold. The estimate is based on a cutoff grade of 1 gram gold per tonne. About 65% of the tonnes are found in primary mineralization; the balance is oxide ore. An additional 12.4 million tonnes of inferred material runs 2.25 grams. The updated resource estimate includes 172,000 oz. of gold that have been re-classified to the indicated resource category from a September estimate that had them as inferred resources.
The resources extend to a depth of 180 metres, and the deposit remains open at depth and along strike. Gold mineralization at Tasiast is hosted by a banded iron formation.
The Tasiast deposit comprises two main zones: the 4.8-km East Branch and the 2-km West Branch. So far, Defiance’s efforts have been focused on the East Branch’s central high-grade zone, known as Colonne Piment. Combined, the Colonne Piment and South Piment zones constitute nearly all the project’s previously tabled indicated resource and about two-thirds of the inferred resource.
More recently, metallurgical test work on primary and oxide ore from Tasiast by SGS Lakefield Research indicated gold recoveries of 94-95%. Results from recently completed hydrological drilling and test work for the process water supply for the mine are expected later this month. The work is part of an ongoing bankable feasibility study slated for completion during the first quarter.
News of the permit had shares in Defiance a nickel, or more than 8%, higher in afternoon trading in Toronto on Jan. 15. The shares trade in a 52-week rage of 5-77.