Gryphon Minerals (ASX:GRY) has updated the market on its Banforo gold project in Burkina Faso which contains 3.6 million ounces of gold. The recovery rate on the oxide zones will be excellent at 85% and decreasing to 78% and 68% for respectively the transitional zone and primary zone with most of the gold being extracted within 30 days. The results of this test work have been used in the company’s feasibility study at Banfora.

This feasibility study calls for a 2Mtpa processing rate which should result in a production rate of 70,000 ounces of gold per year over an initial 9.2 year mine life. The initial capital expenditures are expected to be $97M and the all-in sustaining cost per ounce will be less than $900/oz. This results in an NPV5% of $81M using a gold price of $1250/oz, increasing to $121M should the gold price average $1350/oz during the mine life.

Disclosure: The author holds no position in Gryphon Minerals. Please see our disclaimer for current positions.

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