Bassari is still in business despite being ‘over-run by thousands of illegal miners’
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Emerging gold producer Bassari Resources has reassured shareholders its Senegal project will produce “excellent cash flow” despite being “over-run by thousands of illegal miners”.
Chairman Alex Mackenzie acknowledged at the company’s (ASX:BSR) annual general meeting on Thursday that the last 12 months had posed some early delay problems.
Bassari’s Sambarabougou permit, which contains the Douta alluvial gold area, was overrun by illegal miners from all parts of Africa, according to Mr Mackenzie.
Alluvial gold is found in soil in the form of dust, thin flakes or nuggets.
Bassari undertook a new drilling program last year to confirm that its Makabingui gold deposit was not depleted by the illegal miners.
The company then completed an updated bankable feasibility study that determined the mining of the four high-grade Makabingui pits would “produce excellent cash flow and returns at a low capex and a low operating cost”.
The study estimates the operation will produce 174,375 ounces of gold over 3.4 years delivering revenue of $US209 million ($276.4 million), based on a gold price of $US1200 per ounce, and net cash of $US76.9 million.
However, there is the possibility Bassari’s cash flows could be higher still, with the gold price now trading at close to $1300 an ounce.
Mr Mackenzie told shareholders the company has also jumped a number of other hurdles including finalising the $US13 million needed to build the mine.