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DRC’s Moto to lift gold resource 33%
David McKay
Posted:
[miningmx.com] -- MOTO Goldmines, a gold exploration company operating in the Democratic Republic of Congo (DRC), expected to report a one third increase in gold resources by mid-year.


Klaus Eckhof, Moto Goldmines president, confirmed some 15 million ounces of gold resources had been discovered at properties into which the company had ‘farm in’ agreements with Okimo, a government firm.

“The resource will improve dramatically in the next three to four months,” said Eckhof. He was commenting at the Emerging Mining Congress held in Livingstone, Zambia.

Eckhof also confirmed plans to consolidate the properties owned by Okimo into a single entity in return for handing a 10% stake in Moto Mines to Okimo which would also own 20% of the assets. “We’re basically swapping equity for greater participation,” he said.

Moto Goldmines previously reported gold resources of about 11 million ounces, but the figure has been growing rapidly. Eckhof said gold resources were grown 0.5 million oz every month.

Owing to the high-grade nature of the resource, the conversion rate (from resources to reserves) was about 95%.

At estimated throughput of 3 million tons/year, and an average gold price of $450/oz, and excluding capital and infrastructure costs, the company has potential for a 240,000 oz/year production at cash costs of about $220/oz. This would generate net cash flows in excess of $650m over a 12-year life of mine, Moto Goldmines said.

“At $500/oz this is a fantastic project,” Eckhof said. But the company could generate as much as 800,000 oz/year once it started mining gold from its underground regions. Capital for the startup is estimated to be between $160m to $200m.

Sam Jonah, who was recently appointed chairman of Moto Goldmines, said the company had been plucked from obscurity.

“It had six rigs operating in the DRC and nobody knew about it,” Jonah said. “It has now been drilling for 18 months and is due to enter a full-blown feasibility study.”

Okimo has become more prominent lately after it asked AngloGold Ashanti, the Anglo American subsidiary, to accelerate the development of its gold resource which is adjacent to Moto Goldmines.

Jonah said there had been no such pressure from Okimo. “Moto must be one of the most active companies in the DRC.”

Eckhof said the company would be moved to Britain’s Alternative Investment Market (AIM) later this year and delisted from the Australian Stock Exchange. It would retain its Toronto and Frankfurt listing, the latter representing its most active bourse".
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