Tanzanian Gold Corporation (TSX:TNX) has unveiled procurement and construction plans for a 1,000+ tonnes per day (tpd) by Buckreef Gold Company Limited.
TanZan CEO, Stephen Mullowney, said that after analysing various options to construct a 1,000+ tpd processing plant at Buckreef Gold, including an EPC build, it was determined that the most cost effective and timely approach to building a 1,000+ tpd processing plant was to self-construct this operation as an expansion to the 360 tpd processing plant. This revised cost effective plan supersedes the previously released plan.
“We continue to gain confidence in the potential at Buckreef, both on the expansion of mining activities and the potential for significant exploration upside,” Mr Mullowney said.
“I would like to congratulate the TanGold and Buckreef Gold teams on de-risking a negative cash flow test plant, optimising recoveries to +90% and successfully expanding the processing plant to 360 tpd, which is now in the final stages of commissioning.
“Based on these successes we have increased confidence to again expand the processing plant to 1,000+ tpd. We expect to do this in a cost-effective, expedient manner and are excited about advancing on our second consecutive projected high returning project with an anticipated quick payback.
“The projected increase in cash flow from the expanded processing plant is expected to enable us to continue to advance Buckreef in a shareholder accretive fashion.”
The anticipated increase in cash flow from the 1,000+ processing plant will fund value enhancing activities at Buckreef Gold including, but not limited to, a robust exploration program in the Buckreef Main Zone, Buckreef West and the newly discovered Anfield Zone.
The company and Buckreef Gold have developed a robust mine plan for the expanded mining operations and have confidence in the execution of the expanded operations and its potential for high financial returns.
Buckreef Gold will operate the 360 tpd operation while simultaneously advancing construction on the 1,000+ tpd processing plant expansion. The 1,000+ tpd operation is expected to be capable of production 15,000 – 20,000 ounces of gold per year based on the initial mine plan and grade profile.
- Low-Cost Expansion Funded from Existing Cash Resources: As experienced on the 360 tpd processing plant build, in-house construction significantly reduces capital expenditures. Project capital expenditures for an expanded 1,000+ tpd processing plant is estimated to be approximately US$4.0 million, which includes an upgraded elution circuit and other capital equipment to accommodate the increased throughput;
- Advanced Gold Production: An in-house plant expansion accelerates construction timelines, and advances the mine plan and gold production over previously envisaged timelines. The targeted completion of the 1,000+ tpd processing plant expansion is expected in calendar Q2/Q3 2022;
- Proven Proof of Concept: Buckreef Gold has purchased an additional 720 tpd of ball mill capacity and is constructing an expanded CIL tank circuit following a similar methodology used in the 360 tpd processing plant expansion (see proposed Processing Plant Flowsheet below). The additional ball mills are in the process of being shipped and are one of the longest lead capital items. We do not anticipate any delays as a result of the ongoing issues with global supply chains;
- Reputable Owner Engineer: Ausenco has been retained as TanGold’s owner engineer to assist TanGold and Buckreef Gold in management of the 1,000+ tpd processing plant expansion;
- Locally Built: The process circuit will be primarily locally sourced and constructed by local teams in a cost effective and efficient manner similar to the 360 tpd processing plant expansion;
- Fully Permitted: Construction is on land that is 100% compensated and permitted; and
- Utiliwes Existing Tailings Storage: Expanded operations will utilize the same tailings storage facility as the 360 tpd processing plant, which will be expanded over time. Buckreef Gold will also continue to evaluate a dry stack tailings facility.
The self-construct option was given increased consideration as a result of:
- the success in locally building and efficiently expanding the existing plant by 360 tpd;
- (ii) a five month timeline from ordering the major components of the 360 tpd processing plant to the start of project commissioning in October 2021;
- (iii) the success of the oxide test processing plant in achieving 90% gold recoveries over July and August 2021 as previously disclosed;
- (iv) project capital expenditures of US$1.6 million for the 360 tpd processing plant expansion, which was completed on budget;
- (v) existing crushing capacity of 1,440 tpd; and (vi) installation of a larger transformer for the 360 tpd plant which can accommodate the additional capacity.
For further information please visit: https://www.tangoldcorp.com/i