Abujar is now fully funded to production. Could you comment on this achievement?
CAPEX financing can be very challenging for juniors transitioning to single-asset producers, many investors preferring to wait until the project has reached financial maturity before committing to invest. We are absolutely thrilled to have mandated fund manager Taurus Mining Finance Fund to underwrite between US$130 and US$140 million of debt funding over a 5 years loan.
Tietto has also raised A$85 million in a two-tranche, oversubscribed private placement, which makes Abujar fully funded to commence production in late 2022. This shows the market’s appetite and interest to be part in Abujar’s becoming the next gold mine in Ivory Coast.
What are the highlights of the recently published DFS and how does it compare to the earlier published PFS?
The DFS offers a significant increase in the total reserve, but also improved project economics, with a very competitive, optimized average AISC of US$832/oz over LOM. In our July 2021 MRE update, we did not only increase the resource base from 3 million oz to 3.4 million oz, but more critically, we published a 50% increase in the indicated resource to 43.4 million t at 1.3 g/t Au for 1.85 million oz of contained gold.
By October 2021 and with the announcement of our much-expected DFS, Abujar presented a compelling 1.45 million oz reserve project forecasted to produce 260,000 oz/y in the first year of production, and 200,000 oz/y over the first six years. Our IRR is at 155% pre-tax and 95% post-tax. Our CAPEX is also revised down from the PFS to US$200 million, with a very short payback period of under one year from the first production. The open pit probable reserves have been updated up to 34.4 million t at 1.3 g/t Au. Over the course of the entire 11 years initial LOM, Abujar should generate a revenue of US$2.87 billion, with plenty of opportunities to grow into this base.
How is the construction of the mine and site facilities progressing?
Abujar is fully permitted and we work against the clock to pour first gold by Q4 2022. We kick-started the construction with site infrastructure upgrades and the construction of the camp.
The community has been splendidly supportive and are prepared to welcome large-scale open pit operations in the region. They look forward to enjoying some benefits from local procurement and employment. As a company, Tietto has paid great attention to different projects in the country so that we can maximize the utilization of local skills at both managerial and technical levels.
What are the main challenges of transitioning from a junior to a producer?
Entering Ivory Coast just at the end of its domestic crisis, I started a long and beautiful exploration journey in a country that I still consider to be one of the best in terms of exploration and project development. The main challenge Tietto faces today is to reinvent ourselves from junior explorers to mining operators of a reasonably large open pit mine and processing system – and this involves many changes. In this position, juniors must prove themselves able to build and run a mine successfully.
Tietto holds a large land package in Ivory Coast. What is your exploration strategy from here on?
We only explored 10% of our 1,114 km2 land area, including 70 km strike length gold corridor across our tenements. The upside potential is immense. Within 10 km of Abujar we have identified at least 20 other prospects. Tietto is defining targets in both the northern and southern tenements, with over 30 targets ready for drilling. While we move into production we should be able to feed in greater resources and increase the output.
We have recently completed 30,000 m infill drilling to delineate the measured resources, as well as started a 5,000 m AG deep drilling to explore the underground potential under the main ore reserves of the AG Core. Tietto has in-house drilling capacity. This makes us a truly unique explorer with an enviable cost and time flexibility to drill according to our needs.