JORC 2012 Table 1 – Section 4 Estimation and Reporting of Ore Reserves
JORC Code explanation
Mineral Resource estimate for conversion to Ore Reserves
Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve. Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.
• The Nkosuo Ore Reserve is based on the Nkosuo Mineral Resource. The Nkosuo Mineral Resources are compiled and estimated by Mr Gary Brabham FAusIMM, MAIG, who is the Competent Person for those Mineral Resource estimates.
• Mineral Resources quoted in this report are inclusive of Ore Reserves.
Comment on any site visits undertaken by the Competent Person and the outcome of those visits. If no site visits have been undertaken indicate why this is the case.
• The Competent Person for the Nkosuo Ore Reserve, Mr Adrian Ralph FAusIMM has visited the Edikan Gold Mine (Edikan), including the Nkosuo project from the 22th to 24th March 2022.
The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves. The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.
• The Nkosuo Ore Reserves are supported by a Feasibility level study undertaken by Perseus Mining Limited (Perseus). On this basis, the Nkosuo Mineral Resources have been converted to Ore Reserves.
• Ore Reserves are determined from technically achievable pit designs based on Open Pit optimisation and the application of appropriate modifying factors. The designs were assessed to ensure economic viability.
• Nkosuo Ore Reserves were incorporated into a mine schedule based upon the current Life of Mine Plan for the Edikan Mine to demonstrate economic viability.
The basis of the cut-off grade(s) or quality parameters applied.
• The cut-off grade is based on the economic parameters developed from the operation. The cut-off grade varies by material type as follows;
Mining factors or assumptions
The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design). The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc. The assumptions made regarding geotechnical parameters (e.g. pit slopes, stope sizes, etc.), grade control and pre-production drilling. The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate). The mining dilution factors used. The mining recovery factors used. Any minimum mining widths used. The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion. The infrastructure requirements of the selected mining methods.
• The chosen method of mining is conventional open pit mining utilising hydraulic excavators and trucks, mining bench heights of 5 m with 2.5m flitches to minimise ore loss and waste rock dilution. This configuration is the same as currently used for mining of similar orebodies at the nearby Edikan Gold Mine.
• The economic pit shell was defined using Whittle pit optimisation software (“Whittle”) with inputs such as geotechnical parameters, metallurgical recovery and mining costs.
• The pit optimisation was run with revenue generated only by Measured and Indicated Mineral Resources. No value was allocated to Inferred Mineral Resources.
• Whittle input parameters are based on Perseus Mining Limited site operating experience in similar deposits at Edikan and supporting technical studies undertaken as part of the Nkosuo Feasibility study.
• The pit slope design assumptions are based on a geotechnical study by Chris Orr of George, Orr and associates (Australia) Pty Ltd. Inter-ramp pit slopes are 30 to 60 degrees and vary by material weathering. Inter-ramp slopes are excluding ramp but include a 6m berm every 5m vertically in weathered material and 10m berms every 20 m in fresh rock. Additional berms are located at the top of fresh rock (10m wide), and every third bench (60 m vertically) in fresh rock (13m wide).
• As with other open pit mines at Edikan, a conventional reverse circulation drilling (RC) grade control program will be undertaken ahead of open pit mining. This has been accounted for in mining cost estimates.
• Aside from RC grade control, the only other pre-production drilling for the Nkosuo project is sterilisation auger drilling for the Nkosuo waste dump.
• The Nkosuo Mineral Resource is a Multiple Indicator Kriging (MIK) Model. MIK models are considered to represent a recoverable Mineral Resources, and therefore no further mining dilution or ore loss (mining recovery) modifying factors were applied in the conversion of the Mineral Resource to an Ore Reserve.
• Pit ramps have been designed for a 100-tonne payload truck fleet and are set at 24 metres (dual lane) to 16 metres (single lane). Minimum mining with is 40m for the 100-tonne class truck fleet.
• Inferred Resources have not been included in the Ore Reserve.
• The Edikan Gold Mine has been in operation since 2011. The administration, processing and related infrastructure at Edikan will be suitable to support the Nkosuo Ore Reserves. New infrastructure for the Nkosuo Ore Reserve includes a haul road, waste dump and short term stockpiles at Nkosuo.
Metallurgical factors or assumptions
The metallurgical process proposed and the appropriateness of that process to the style of mineralisation. Whether the metallurgical process is well-tested technology or novel in nature. The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied. Any assumptions or allowances made for deleterious elements. The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole. For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?
• The Edikan processing plant uses crushing, grinding, gravity, flotation, concentrate regrind and cyanide leaching to extract gold. The plant has a nominal capacity of 7Mtpa.
• The technology used in the processing plant is well proven, and the plant has been operating successfully since 2011.
• The processing test work is representative of the different material types throughout the mining area.
• No deleterious material has been identified.
• The process metallurgical recovery for gold is fixed by material type for the Nkosuo deposit:
• Metallurgical testwork has been completed for the Nkosuo deposit as described in Table 1, Section 3 for the Nkosuo Mineral Resource.
• There are no mineralogy specification requirements.
The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.
• No environmental issues are known to exist which will prevent open pit mining and ore processing to continue to operate. Perseus has sufficient space available for waste dumps and tailings dams to store the expected quantities of mine waste rock associated with the Nkosuo open pit Ore Reserve. Capital costs for additional lifts to the Edikan tailings facilities have been included in the Nkosuo Feasibility study.
• Testwork on waste and ore material from the Nkosuo deposit indicates that the potential for the development of acid mine drainage (AMD) within the material types tested is low, with all samples either classified as either non-acid forming or low potential.
The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided or accessed.
• All material infrastructure for Nkosuo is available at the existing Edikan Gold Mine.
• A dedicated haul road is planned to be constructed from Nkosuo to the Edikan Gold Mine processing facility, and the cost for this has been included in the Nkosuo Feasibility capital estimate.
• Power supply is from the national grid system supplied Ghanaian electricity company, GRIDCO. Future power will be generated on site at Edikan from piped gas under a power purchase agreement with Genser Energy.
• Water supply is largely from groundwater extracted from dedicated boreholes and supplemented by decant water for the processing plant.
• Access to site is via public roads
• A camp is established to accommodate non-local employees
• Workshops, offices, storage of reagents and laboratory are established at the processing plant
The derivation of, or assumptions made, regarding projected capital costs in the study. The methodology used to estimate operating costs. Allowances made for the content of deleterious elements. The derivation of assumptions made of metal or commodity price(s), for the principal minerals and co- products. The source of exchange rates used in the study. Derivation of transportation charges. The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc. The allowances made for royalties payable, both Government and private.
• The mining costs are based on schedule of rates provided by Perseus mining contractors and Perseus actual performance
• Processing and G&A costs are based on Perseus actual performance and the results of testwork on the Nkosuo deposit for the Nkosuo Feasibility Study.
• Capital costs are based on either actual costs from Perseus experience in West Africa, or on quotes from local suppliers as part of the Nkosuo Feasibility Study.
• No deleterious materials have been identified
• Gold is the only metal considered in the Ore Reserves.
• All costs are in US$
• A gold price of US$1,300/oz was used for mine planning and pit optimisation
• Bullion and Refining cost of US$2.24/oz was applied
• Total royalties of 6.5% of net revenue and a discovery bonus of US$2.0/oz are accounted for in mine operating costs.
The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc. The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.
• A gold price of US$1,300/oz was used for mine planning and pit optimisation.
• Economic modelling by Perseus is at US$1,500/oz
• Bullion and Refining cost of US$2.24/oz was applied
• Total royalties of 6.5% of net revenue to the Government of Ghana and the Adio Mabas Group have been applied to costs for the Nkosuo project
• A discovery bonus of US$2.0 per ounce of Ore Reserve (payable to the Adio Mabas group) are accounted for in the Nkosuo project costs
The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future. A customer and competitor analysis along with the identification of likely market windows for the product. Price and volume forecasts and the basis for these forecasts. For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.
• The demand for gold is considered at the gold price used.
• It was considered that gold will be marketable beyond the processing life.
• The processing forecast and mine life are based on life of mine plans.
The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc. NPV ranges and sensitivity to variations in the significant assumptions and inputs.
• A schedule and economic model have been completed by Perseus on a pre-tax basis using the Ore Reserves published in this Statement. The inputs used are as per those stated in the relevant sections of this Statement. The assessment used a discount rate of 10% which is considered appropriate.
• The base case results from the financial model confirm that the Project is economically viable.
• Note that as the gold price changes so too will the economic limits of the pits and their Reserves. Consequently, the size of the Project will therefore adjust to suit the revised economics.
The status of agreements with key stakeholders and matters leading to social licence to operate.
• Perseus has established relevant agreements with local stakeholders in order to operate the Edikan Gold Mine
• Further community engagement will continue to occur with local stakeholders as part of the Ghanaian Environmental Assessment process
To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves: Any identified material naturally occurring risks. The status of material legal agreements and marketing arrangements. The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.
• The estimate of an Ore Reserve for the Nkosuo Open Pit is not materially affected by any other known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors other than that described in the preceding text. It is believed that the classification of Ore Reserves as set out in the following sections is reasonable.
• The Nkosuo project will require regulatory mining and environmental approval thought the usual processes for such activities in Ghana, which are well documented. Perseus is not aware of any reason why such approvals should not take place in due course.
The basis for the classification of the Ore Reserves into varying confidence categories. Whether the result appropriately reflects the Competent Person’s view of the deposit. The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).
• Ore Reserves have been classified based on the underlying Mineral Resources classifications and the level of detail in the mine planning. The Mineral Resources were classified as Measured, Indicated and Inferred. The Ore Reserves, based only on the Measured and Indicated Resources, have been classified as Proved and Probable Ore Reserves, respectively.
• The Ore Reserve is classified as Proved and Probable in accordance with the JORC Code, corresponding to the Mineral Resource classifications of Measured and Indicated and taking into account other factors where relevant. The deposit’s geological model is well constrained. The Ore Reserve classification is considered appropriate given the nature of the deposit, the moderate grade variability, drilling density and structural complexity. It was deemed appropriate to use Measured Mineral Resources as a basis for Proved Reserves and Indicated Mineral Resources as a basis for Probable Reserves.
• No Inferred Mineral Resources were included in the Ore Reserve estimate.
Audits or reviews
The results of any audits or reviews of Ore Reserve estimates.
• Perseus has completed an internal review of the Ore Reserve estimate.
• The JORC Code provides guidelines which set out minimum standards, recommendations, and guidelines for the Public Reporting of exploration results, Mineral Resources and Ore Reserves. Within the JORC Code is a “Checklist of Assessment and Reporting Criteria” (Table 1 – JORC Code). This checklist has been used as a systematic method to undertake a review of the underlying Study used to report in accordance with the JORC Code.
Discussion of relative accuracy/ confidence
Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate. The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used. Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage. It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.
• The accuracy and confidence of the inputs is supported by a Feasibility Study for the Nkosuo project
• The key factors that are likely to affect the accuracy and confidence in the Ore Reserves are:
– Accuracy of the underlying Resource Block Models;
– Changes in gold prices and sales agreements;
– Changes in metallurgical recovery; and
– Mining ore loss and dilution
• The accuracy of the underlying Mineral Resources is defined by the Resource Category that the Mineral Resources are assigned to. Only the highest categories of Resource classification, Measured and Indicated, have been used as a basis for estimating Ore Reserves.