The Company owns an NSR royalty on the Bonikro mine’s fifth push back, PB5, at a rate of up to 2.25%, capped at 280,000 oz. Production from PB5 is expected to exceed the cap. The NSR royalty is triggered by the commencement of production from PB5, with the royalty rate dependent on the gold price.
The Bonikro open-pit gold mine is located in Côte d’Ivoire, 230km north-west of Abidjan and has produced over 1 million oz of gold since production commenced in October 2008. In 2018, Newcrest sold Bonikro to AfriqueGold, who then sold it in 2019 to the current owner and operator, Allied Gold Corp. Allied Gold, subsequently appointed Capital Drilling as mining contractor for five years.
In 2017, Newcrest conducted a Pre-Feasibility Study on PB5. At a gold price of US$1,200/oz, the PFS estimated a pre-tax NPV of US$50m, leveraging the existing skilled personnel, infrastructure, and mining fleet to extend mine life by at least 5.5 years. Capital development is limited and includes TSF expansion and minor changes to the road, pipeline, and power line on the edge of the PB5 West Wall.
PB5 is estimated to contain an Indicated Resource of 26.5Mt grading at 1.04 g/t for 882,000 oz of contained gold and an Inferred Resource of 6.3Mt grading at 0.82 g/t for 166,000 oz of gold contained. Of this, a Reserve of 10.1Mt has been estimated, grading 1.39 g/t for 449,000 oz.
Allied Gold is understood to be in the process of commencing development of PB5 and is targeting a ramp-up to nameplate production of 100,000 oz per annum in 2023.