Altus Strategies (AIM:ALTS) has announced positive results from a Preliminary Economic Assessment ("PEA") for its 100% owned Diba gold project ("Diba") in western Mali.
The African mining royalty generator told investors that the PEA came back positive for an open-pit oxide gold mine, demonstrating strong cash flow and rapid payback with project economics applying a 10% discount rate and a gold price of US$1,500/oz gold price.
The PEA has shown “compelling” preliminary economics, generating an after-tax net present value of US$81 million, internal return rate of 469% and payback of 6.9 months.
“The PEA envisages a simple low-cost and low-strip ratio open-pit gold mine, using standard heap-leach processing to generate a pre-tax valuation of US$115m, yielding an IRR of 728%,” said Steven Poulton, Altus’ CEO, adding that the PEA demonstrated “robust” results.
Shares in Altus Strategies skyrocketed to 65p trading 109.68% higher on Wednesday.
Altus believes Diba has “considerable growth potential” and now intends to systematically drill and test the seven priority targets it has discovered within 7km of the Diba hill deposit.
The next phase of drilling on the project will focus on the potential to convert Inferred Resources into Indicated Resources, as well as the down dip potential of the deposit.
“We will also undertake metallurgical test work to determine if the sulphide material, which is not modelled in the current PEA and which represents approximately 50% of the current mineral resource, is amenable to conventional CIL processing,” said Poulton.
He added, "We believe we have only scratched the surface on Diba's potential to generate substantial value for our shareholders and look forward to providing updates in due course.”
Follow News & Updates from Altus Strategies here: