Osino Resources, a Vancouver-based gold-mining company, released its feasibility study results at its Twin Hills project in central Namibia. The study reports positive results showing an excellent net present value, mine lifespan, cash flow, and all-in sustaining costs.
Osino advanced the Twin Hills gold project rapidly through expedited expansion-focused drilling and accelerated development research. In doing so, the company completed its feasibility study on June 12 with numerous exciting figures. Lycopodium Minerals Canada Ltd. helped prepare the Definitive Feasibility Study on the sedimentary-hosted open-pit mine in Namibia’s Damara orogenic belt.
To start, the study revealed a net present value of $742 million at a 5% discount rate and a $1,750-per-ounce gold price. The post-tax net present value came to $480 million, with the internal rate of return at 28%. The company also forecasted figures for gold prices rising to $1,950 per ounce, adjusting the after-tax net present value to $656 million at a 36% internal rate of return.
At the spot gold price of $1,950 per ounce, Osino forecasts the project to generate just below $1.5 billion in net pre-tax cash flows. Given this figure, stakeholders can clearly see Twin Hills’ strong potential in terms of economics.
“We are very pleased with the results of this DFS which confirms Twin Hills as a technically simple, long-life, and low-cost gold project with very strong economics and plenty of upside,” Heye Daun, the co-founder, president, and CEO of Osino Resources, commented on the report.
The life of mine cash flow at the lower gold price came to $721 million, while the higher price could yield $958 million. With this, Osino forecasted cash costs of $365 million, including $35 million in contingency and $18 million in capitalized pre-strip.
The payback period on the cash costs is just 2.2 years. With the higher gold price of $1,950, the payback period would reduce to 1.9 years. The company’s sustaining capital requirement for the project is $41 million. Osino Resources’ report shows a 13-year life-of-mine estimate, offering 5 million tons per year.
The Twin Hills project’s measured and indicated resources came to 84.3 million tons grading at 1.08 grams per ton. The inferred resources totaled at 7 million tons, grading at 1.1 grams per ton of gold with 250,000 ounces contained. Using a cut-off grade of 0.45 grams per ton of gold, the proven and probable resources came to 64.5 million tons grading at 1.05 grams per ton containing 2.2 million ounces.
With the 13-year life-of-mine, Osino expects the processing plant to recover 92% of the gold resources contained in ore using a three-stage process that involves “crushing, ball milling, gravity separation, pre-oxidation and CIL circuit plus filtration & dry-stack tailings deposition,” according to the report.
The life-of-mine operating costs came to $918 per ounce, with average cash costs at $991. The largest achievement on the report may just be the low all-in sustaining costs, though, allowing the company to potentially yield such high net value and cash flows. The forecasted all-in sustaining costs came to just $1,011 per ounce for the life of mine.
Based on the feasibility study, Osino plans to begin the next steps on construction and plan execution in the coming months with the hope of reaching a financial decision on construction by the end of 2023. If all goes according to plan, Osino hopes to bring Twin Hills to production within the next three years, Daun explained further.
“Now that the DFS has been completed, we will immediately commence with detailed engineering, and our vision is to reach a fully financed construction decision by the end of 2023. The results of this DFS demonstrate that Twin Hills is a very robust, cash-generative project which will deliver outstanding returns to shareholders once it goes into production, hopefully towards the end of 2025 or early 2026,” Daun continued explaining in the statement.
Beyond the Twin Hills gold project, Osino Resources also operates numerous mining operations and exploration efforts across Namibia. The Ondundu Project is just 130 kilometers northwest of the Twin Hills project and yields gold recovery in the hefty range of 76% to 79%. The Omaruru Lithium Project sits 20 kilometers from Twin Hills and contains over 65 known and almost all zoned pegmatites belonging to the Lithium-Caesium-Tantalum grouping of rare pegmatites.
Osino currently controls numerous Namibia-based exploration efforts as well, including “25 Exclusive Prospecting Licenses (EPL) covering nearly 8,000km².”
With Twin Hills’ exciting feasibility reports of the Twin Hills project, the company is on track to expand output as planned.