The company says the Kobada operation can churn out gold at a ridiculously low all-in sustaining cost of just US$1004 (A$1586) per ounce to deliver at least US$134m a year in pre-tax cashflows using a very conservative gold price of US$2200. That number jumps to a whopping US$211m a year using a US$3000 an ounce gold price, which is still lower than the spot price.
The project generates a post-tax net present value of US$500m at US$2200 an ounce and US$951m a year at US$3000 an ounce.
Toubani says that given its high percentage of easier-to-process oxide ore, Kobada would also be one of the lowest capital intensity development projects in the sector.
Toubani says its agreement with the Mali Government on key fiscal terms puts the company firmly on a development pathway towards a final investment decision for the project later this year.
It is also a sign of an improving regulatory framework in Mali, which is building momentum to move the nation’s mining industry forward. Mali reopened its mines department on March 15 and has recently finalised other agreements with peer-mining companies.
In a further sign of improving confidence in its mining industry, Allied Gold recently formed a strategic partnership with United Arab Emirates-based investment fund Ambrosia for a US$373M investment to acquire an interest in half of Allied Gold’s Mali operations.
Toubani has already completed its necessary early engineering activities and drilling program and is accelerating its project readiness workstreams for Kobada.
Toubani sees the project as an increasingly executable, technically simple, low capital cost asset, backdropped against an exceptionally strong gold price environment. Even after accounting for the Mali government’s free carried interest, royalties and other fees, Kobada’s technical advantages still allow it to spit out serious money for its 65 per cent owner Toubani.
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