Chesser Resources (ASX:CHZ) - Managing Director & CEO, Andrew Grove
Managing Director & CEO, Andrew Grove
Source: Andrew Grove/LinkedIn
Market Herald logo


Be the first with the news that moves the market
  • Chesser Resources (CHZ) announces encouraging outcomes from a recently completed scoping study on the proposed development of its Diamba Sud gold project in Senegal, West Africa
  • The scoping study, which was focused on the Areas A and D deposits, “demonstrated” the project’s technically simple and low-risk nature with strong potential to generate economic value
  • Diamba Sud has a 7.5-year mine life and is forecast to produce 704,000 ounces of gold, with a payback period of just 15 months from commercial production
  • The pre-production capital cost has been estimated at US$159 million ($A221.7 million) and post-tax net present value at $A419 million
  • Chesser says it plans to advance straight to the definitive feasibility study phase
  • CHZ shares up 9.52 per cent to 11.5 cents

Chesser Resources (CHZ) has released a scoping study on the potential development of its Diamba Sud gold project in Senegal, West Africa, that points to a “robust, low-cost” operation.

The scoping study was based on the project’s maiden indicated and inferred mineral resource estimate (MRE) for the Area A and Area D deposits of 15.2 million tonnes grading 1.6 grams per tonne gold for 781,000 ounces of contained gold.

Diamba Sud represented a potentially long-life, technically simple, low-risk and “highly profitable” gold mining and production proposition, according to the study, which showed net cashflows reaching $US399 million.

Other key outcomes from the study included 704,000 ounces of gold production across an initial 7.5-year mine life at all-in sustaining costs (AISC) averaging $US820 (A$1142) an ounce, with a capital payback period of just 15 months from commercial production start-up.

The pre-production capital cost was forecast at $US159 million ($A221.7 million) including $US23 million ($A32 million) in contingencies.

The study indicates a post-tax net present value (NPV) for Diamba Sud of $A419 million and an internal rate of return of 59 per cent at a gold price of $US1,800 ($A2,510) per ounce.

Chesser said there remains significant upside in exploration to add to the mineral resource inventory as well as from future optimisation studies.

Managing Director and CEO Andrew Grove said the “excellent scoping study results clearly demonstrate” the low risk and robust nature of the potential gold mine at Diamba Sud.

“The project economics are expected to improve with future growth in mineral resources associated with the current drilling campaign, which is focused on defining the new discovery at Karakara and extending the resources at Areas A and D, as well as exploration leading to new discoveries,” he said.

Chesser is eyeing the tabling of an updated MRE for Diamba Sud incorporating drilling results from the Karakara prospect in the second half of 2022.

The company said it also intends moving straight to the definitive feasibility study (DFS) stage, which – along with receiving government approvals and reaching a final investment decision – has a timeline of about 18 to 24 months.

CHZ shares were trading 9.52 per cent higher at 11.5 cents at 2:37 pm AEDT.

CHZ by the numbers
More From The Market Herald
Ampol (ASX:ALD) - Managing Director & CEO, Matthew Halliday

" Ampol (ASX:ALD) gets all clear for Z Energy (ASX:ZEL) acquisition

Ampol Limited (ASX:ALD) welcomes the decision by the NZCC to provide clearance for its acquisition of…
Ampol Limited,APL - Managing Director and CEO Matthew Halliday

" Ampol (ASX:ALD) sells 20 retail sites for $48m in net proceeds

Ampol Limited (APL) announces the sale of 20 care freehold convenience retail sites to Charter Hall…

" Zenith Minerals (ASX:ZNC) begins drilling at Waratah Well

Zenith Minerals (ASX:ZNC) has begun drilling at the Waratah Well lithium project in Western Australia.
Resource Base (ASX:RBX) - Executive Chairman & CEO, Shannon Green

" Resource Base (ASX:RBX) makes significant REE discovery at Mitre Hill

Resource Base (ASX:RBX) has made a significant rare earth element (REE) discovery at its Mitre Hill…