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Feasibility Study Confirms Cardinal’s Namdini as a Tier One Gold Project

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Feasibility Study Confirms Cardinal’s Namdini as a Tier One Gold Project






Cardinal Resources Limited (ASX:CDV) (TSX : CDV) is pleased to announce the results of the Feasibility Study for the Namdini Gold Project in Ghana, West Africa. The FS confirms Namdini as a gold project with attractive economic returns.




  • 5.1 million ounces (Moz) Ore Reserve* (Pre-Feasibility Study (PFS) 4.76 Moz)
  • 421,000 oz in first 12 months (PFS 420,000 oz); 1.1 Moz forecast for first 3 years of full production
  • US$1.46 billion in undiscounted, pre-tax free cashflow forecast with the current life of mine (LOM) plan of 15 years at US$1,350/oz (US$2.05 billion undiscounted, pre-tax free cashflow at US$1,500/oz)
  • US$324 million in undiscounted, pre-tax free cashflow, forecast during 1st Year of full production at US$1,350/oz (US$384 million first year pre-tax free cashflow at US$1,500/oz)
  • US$348 million capital expenditure (CAPEX) plus US$42 million contingency allowed with a robust level of accuracy of +15/-5% (PFS US$414 million total Capex; +30/-20% accuracy)
  • CAPEX payback of 21 months at US$1,350/oz (12 months at USD$1,500/oz); driven by early higher grades and recoveries, low strip ratio and low costs, within the starter pit
  • Low all-in sustaining costs (AISC) of US$585 during CAPEX payback (PFS US$599)
  • Pit design LOM Strip Ratio 1.9:1 (PFS 1.4:1); Starter pit Strip Ratio of 0.9:1; LOM pit design based on US$1,235/oz (PFS US$1,105/oz)
  • Financial Model based on US$1,350/oz for 15 years (PFS US$1,250/oz)
  • 4.2 Moz (130 metric tonnes) produced over 15 years (PFS 3.9 Moz); AISC US$895/oz (PFS US$769/oz)
  • Aachen Process Technology has been adopted to provide economic benefits via operating cost savings; 85% gold recovery during first three years; 83% gold recovery for current LOM plan
  • Namdini 9.5 Mtpa gold project is based upon a single, large open-pit with a conventional process plant design; crush, grind, float, regrind, high shear oxidation (AachenTM) and carbon in leach (CIL)
  • First gold pour targeted for H2 2022 (subject to financing in H1 2020)
  • Namdini Project Net Present Value (NPV) and Internal Rate of Return (IRR) at US$1,350/oz:
      Net Present Value (NPV5)  Internal Rate of Return (IRR)
   Pre-tax  US$914 Million  43.0%
   Post-tax  US$590 Million  33.2%
  • Cardinal’s Board has approved this Feasibility Study and plans to further de-risk the project by commencing the Front End Engineering Design (FEED) programme and further enhancement of the Project Execution Plan (PEP). Early site works and advancement of engineering towards construction, will be funded through Cardinal’s strong cash position of circa A$27 million.

138.6 Mt @ 1.13 g/t Au; 0.5 g/t cut-off, inclusive of 0.4Moz Proved (7.4 Mt @ 1.31 g/t Au) and 4.7Moz Probable (131.2 Mt @ 1.12 g/t Au); 0.5 g/t Au cut-off.
♦ Pre-Feasibility Study (PFS) released on ASX / TSX 18th September 2018
 129.6 Mt @ 1.14 g/t Au; 0.5 g/t cut-off, inclusive of 4.76 Moz Probable (129.6 Mt @ 1.14 g/t Au); 0.5 g/t Au cut-off.



Project Sensitivity Analysis


Sensitivity to US$ Gold Price; Pre and Post-Tax


Capital Cost Estimate


The following table compares the major Project parameters for the FS with those for the PFS:



Direct FS ($US Million)

+15/-5% accuracy

PFS ($US Million)

+30/-20% accuracy

Process Plant 230 205
Infrastructure & Utilities 57 76
Sub-total direct 287 281
Indirect FS ($US Million) PFS ($US Million)
Engineering & Contractors 36 37
Owners costs 25 35
Sub-total indirect 61 72
Contingency 42 61
Total Capital Cost 390 414


Sensitivity of Project Outcomes to US$ Gold Price; Pre-Tax


Sensitivity of Project Outcomes to US$ Gold Price; Post-Tax


US Dollar Gold Price Sensitives


The FS has been evaluated at a gold price of USD$1,350 per ounce. The average US$ gold price per gold ounce for the period from October 2017 to current day was US$1,387 per ounce. During the period, the US dollar gold price has been in steady uptrend from a low of US$1,177 in August 2018 to a high of US$1,550 per ounce traded during September 2019.


Key Technical and Financial Outcomes


The key technical and financial outcomes from the FS on a 100% basis are summarised in the following tables. Further details are provided in the Appendix to this announcement.


Financial Summary for 9.5 Mtpa throughput (based upon a gold price of US$1,350/oz)


Capital cost (including 11% contingency) US$ M 390
All-in Sustaining Cost (AISC)1 Starter Pit US$/oz 585
Life of Mine US$/oz 895
Total Project payback Months 21
Pre-Tax NPV US$ (5% discount rate) US$ M 914
Post-Tax NPV US$ (5% discount rate) US$ M 590
Pre-Tax IRR % 43
Post-Tax IRR % 33

Table Notes:
1 Cash Costs + Royalties + Levies + Life of Mine Sustaining Capital Costs (World Gold Council Standard)
Royalties calculated at a rate of 5.5% and a corporate tax rate of 32.5%; both subject to negotiation, and expected to be finalised over coming months.


Starter Pit Production Summary



Gold price US$/oz 1,350
Gold produced (average for full production years) (koz/yr) 361
Gold head grade (Starter Pit, Ore Reserve) g/t Au 1.41
Gold recovery (Starter Pit) % 85
Strip ratio (Starter Pit) W:O 0.9 :1
Ore mined (0.5 g/t cut-off grade) Tonnes (Mt) 47
Waste mined Tonnes (Mt) 43
Starter Pit life (including ramp-up) Months 27
Total Project payback Months 21



LOM Production Summary (including Starter Pit)


Gold price US$/oz 1,350
Gold produced (average for LOM full production years) (koz/yr) 287
Gold produced (LOM) (Moz) 4.2
Gold head grade (LOM, Ore Reserve) g/t Au 1.13
Gold recovery (LOM) % 83
Strip ratio (LOM) W:O 1.9 : 1
Ore mined (0.5 g/t cut-off grade) Tonnes (Mt) 138.6
Waste mined Tonnes (Mt) 263
Mine life (Including ramp-up and mine closure) years 15
Capital cost (including 11% contingency) US$ M 390
Total Project payback Months 21


Production Profile and LOM AISC


Ongoing Activity


The activities summarised in the Project development schedule below are subject to favourable timelines for finalising project funding, permitting, contracting and procurement.


Further Project optimisation and regional exploration


In conjunction with moving the Project toward a financial investment decision, work continues on further project optimisation and regional exploration utilising Cardinal’s strong cash at bank of approximately A$27 million.


Cardinal’s ~900 km2 of prospective exploration tenure within hauling distance of the proposed Namdini gold production plant remains a short-term opportunity for project enhancement.


Exploration activities, including drilling, will recommence shortly with the stated aim of identifying shallow, high grade deposits that can augment existing Namdini ore to further enhance the current project economics. Recent positive results from exploration activities, for example at Ndongo East1, provide encouragement that higher grade gold systems may exist in the region within trucking distance to the Namdini deposit.


Funding and Strategic Alternatives


Cardinal’s Board has approved this Feasibility Study and recommends progressing the Project to construction pending successful completion of financing activities.


The Company has been actively working with its appointed debt advisor, Cutfield Freeman & Co (London) to secure Project debt finance on competitive terms and continues to assess various funding options.


In early 2019, the Company commenced Project finance discussions with a number of Australian and International Banking groups from which the Company received a number of preliminary (non‐binding) financing term sheets. Discussions with these interested financial institutions have progressed where financial and technical due diligence has commenced, with a data room prepared and accessed, with several technical site visits already conducted. Review of financing options for the Namdini Project will be completed in due course following the Feasibility Study.


In addition to traditional financing solutions, the Company is concurrently evaluating strategic alternatives to bring the project into production with a view to maximising economic outcomes for Cardinal shareholders.


A final financing decision will be made at a time assessed as most appropriate and beneficial to the Company.


In the meantime, the Company remains in a strong financial position with cash reserves of approximately A$27 million.


1 Refer to the announcements “Cardinal Intercepts HighGrade Shallow Gold at Ndongo East” released to the ASX and TSX on 27 March 2019 and “Cardinal Reports Further Shallow HighGrade Gold at Ndongo East” released to the ASX and TSX on 10 July 2019.





The FS demonstrates a viable, globally significant, long-life gold project at Namdini. Potential remains for further improvements in Project economics which will form the basis of ongoing evaluation work, including:


  • FEED and PEP programmes incorporating Whittle Consulting’s mine and schedule optimisation plan.
  • OPEX savings by evaluating a flotation cleaner circuit; potential to reduce required regrind power.
  • Additional Mineral Resources that are not part of the current Ore Reserve which represent lateral strike and depth extensions to the current LOM pit design at US$1,235/oz. Subject to the outcome of additional drilling beyond the current pit design, any economic discovery not in the current mine plan may extend the life of the current mine plan which may also include a new underground mine plan.
  • The Regional land package may also have potential to define satellite pits with close proximity to Namdini. Recent results from drilling completed within the Ndongo Project, located approximately 24 km north of Namdini are within hauling distance.2 Drill testing new zones of high-grade gold mineralisation to define satellite pits will recommence soon.


Archie Koimtsidis, Managing Director and Chief Executive Officer, commented:


“Cardinal’s Technical Team, led by our Chief Operating Officer Dave Anthony, along with Lycopodium, Golders and various study managers, have delivered a compelling and robust technical and economic outcome, paving the way for our planned development of the Namdini Gold Project.


With over 1 million ounces slated for production in the first three years; 421,000 oz in Year 1 alone, and an average annual gold production of 287,000 oz over a 15-year mine life, Namdini ranks amongst the world’s largest known, financially robust, undeveloped gold projects.


Namdini has a 5.1 Moz Ore Reserve that is projected to generate US$1.46 billion in undiscounted, pre-tax free cashflow over 15 years including US$324 million in undiscounted, pre-tax free cashflow during its 1st Year of full production, based on a gold price of US$1,350, which is significantly below the current spot gold price.


Since the discovery of Namdini in 2015, we have continued to be focused on de-risking the project and have reached a robust Project CAPEX accuracy level of +15/-5% for this Feasibility Study. Unlike whole of ore gold processing plants, we have the benefit of being able to produce a concentrate for gold extraction on site which means that we have a much smaller back half of the plant providing a huge positive impact on capital costs. Economic and technical optimisation confirms a large, single open-pit utilising a conventional process plant with a throughput of 9.5 Mtpa and a very attractive   24-month debt payback.


On a social level, Namdini is poised to become the first large scale operating mine in the Upper East Region of Ghana, delivering sustainable prosperity and opportunities to all stakeholders. We are grateful for the continued overwhelming support of these communities and their elders along with the Government of Ghana to bring this project into production.”

2 Refer to the announcements “Cardinal Intercepts HighGrade Shallow Gold at Ndongo East” released to the ASX and TSX on the 27 March 2019 and “Cardinal Reports Further Shallow HighGrade Gold at Ndongo East” released to the ASX and TSX on the 10 July 2019



About Cardinal


Cardinal Resources Limited is a West African gold‐focused exploration and development Company which holds interests in tenements within Ghana, West Africa.


The Company is focused on the development of the flagship Namdini Gold Project.


Exploration programmes are also progressing at the Company’s Bolgatanga (Northern Ghana) and Subranum (Southern Ghana) Projects.


Posted October 28, 2019

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