Friday, June 24, 2011

Wits Gold [TSX:WGR] - Wits Gold Completes a Positive Scoping Study on the DBM Project

Highlights of the Scoping Study

• Shallow underground mine design comprising a 700 metre vertical shaft for men and materials and a conveyor decline for rock transport
• Based on Indicated Resources of 34.5Mt at 5.3g/t Au (5.9Moz) The same reefs host Indicated Resources of 17.0Mt at 0.16kg/t U3O8 (6.1Mlb)
• First production 32 months after initiating construction
• Production rate of 80 000 tonnes of ore per month
• Average recovery of 150 000 oz/yr for the first 10 years of full production
• Life of mine 25 years with total production of 2.9Moz Au at an average grade of 4.4g/t recovered.
• Peak capital required ZAR1.59 billion (US$227m at ZAR7/US$)
• Cash costs of production US$569/oz
• At ZAR275 000/kg Au (US$1 222/oz & ZAR7/US$) pre-tax NPV (10%) ZAR2.08 billion (US$298 million), IRR 26%, payback 6 years
• At current gold price of ZAR325 000/kg Au (US$1 444/oz & ZAR7/US$) pre-tax NPV (10%) ZAR3.54 billion (US$506 million), IRR 35%, pay back 5 years

In response to the results of the scoping study, the CEO of Wits Gold Dr Marc Watchorn said, ‘We are delighted with the extremely positive outcome of the Turgis study, which justifies our earlier statements that DBM is likely to be South Africa’s next shallow gold mine. We intend proceeding immediately with a pre-feasibility study in the anticipation of further optimising the mine design and financial returns. We appreciate the patience of our shareholders, but realise that the time is now right to investigate any opportunity to extract maximum value from this world class resource’.

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