Altus shares skyrocket on Diba economic assessment

African mining company Altus Strategies released positive results from a preliminary economic assessment of its wholly-owned Diba gold project in western Mali on Wednesday.

The AIM-traded firm said the assessment was for an open-pit oxide gold mine, with “strong” cash flow and rapid payback.

Applying a 10% discount rate and a gold price of $1,500 per ounce, the company said it had pre-tax net present value of $115m, an internal rate of return of 728%, and a payback of 6.2 months.

Its after-tax net present value was $81m, with an internal rate of return of 469% and a payback of 6.9 months.

Average production was set at 52,000 ounces per year, with a 3.25 year mine life and a low strip ratio of 1:1.37.

Altus said there was “significant” growth potential for the Diba project, with seven further significant oxide gold targets to be systemically drill tested, and a metallurgical study to test potential for sulphide ores to be processed via carbon-in-leach.

The board noted that Diba is contiguous with the Sadiola mining permit, which it said was “at the heart” of a “world-renowned” belt.

“The preliminary economic assessment envisages a simple low-cost and low-strip ratio open-pit gold mine, using standard heap-leach processing to generate a pre-tax valuation of $115m, yielding an internal rate of return of 728%,” said chief executive officer Steven Poulton.

“While the preliminary economics are compelling, we believe Diba has considerable growth potential.

“We now intend to systematically drill test the seven priority targets we have discovered within seven kilometres of the Diba hill deposit.”

Poulton said the company would also undertake metallurgical test work to determine if the sulphide material, which was not modelled in the current preliminary economic assessment, and which represented about 50% of the current mineral resource, was amenable to conventional carbon-in-leach processing.

“We believe we have only scratched the surface on Diba's potential to generate substantial value for our shareholders and look forward to providing updates in due course.”

At 1610 BST, shares in Altus Strategies were up 40.32% at 43.5p.