Projects – Definitive Feasibility Study

Okvau Gold Deposit

On 1 May 2017 the Company announced the completion of the Definitive Feasibility Study (DFS) on the development of a 2.0Mtpa operation at its 100% owned Okvau Gold Project located in the Mondulkiri province of eastern Cambodia. The DFS was completed to +/-15% level of accuracy. 

Key Outcomes

  • DFS delivers an initial Ore Reserve of 14.3Mt @ 2.0g/t Au for 907,000oz at an average AISC of US$731/oz over an initial 7 year Life-of-Mine (‘LOM’) operating period
  • The DFS is based on a 2.0Mtpa plant to produce approximately 106,000oz pa on average over the initial operating LOM of over 7 years
  • Updated Mineral Resource estimate of 17.7Mt at 2.0g/t gold for 1.14Moz  (at 0.7g/t cut-off) with 1.01Moz as Indicated and 0.13Moz as Inferred
  • Key operating and financial results (US$1,250/oz gold) include1:

Development Capital Costs2


Mining Contractor Capital & Pre-Production Mining




LOM C1 Cash Costs3




Operating Cash Flow (pre-tax)

US$419M (A$558M)

Project Cash Flow After Capital (pre-tax)

US$298M (A$397M)

NPV(5%) (pre-tax)

US$223M (A$298M)

NPV(5%) (post-tax)

 US$160M (A$213M)

Payback (pre-tax)

26 months

Payback (post-tax)

30 months

IRR (pre-tax)

48% pa


40% pa

  1. All economics are 100% attributable to Emerald. Exchange rate of US$0.75. Refer Table One for further details
  2. Includes US$4.4M of capital spares and first fills
  3. C1 Cash Costs include site based mining, processing and admin operating costs plus transport and refining costs
  4. Includes C1 Cash Costs plus royalties, sustaining capital costs and rehabilitation & closure costs
  • 90% of Indicated Resources converted to Ore Reserves
  • Low development capital intensity of US$122/oz of LOM production
  • NPV(5%) to Pre-Production Capital Costs ratio of 2.3x
  • Operating margin of 46% at US$1,250/oz gold price
  • Targeting commencement of project development in late 4Q 2017 with gold production in early 2019
  • Financing plans underway, targeting conventional debt and equity funding
  • Emerald has cash reserves in excess of A$10M. Well placed to progress pre-development activities and exploration before project funding

Key operating and financial outcomes of the DFS, prepared in accordance with the requirements of the JORC Code (2012 Edition).

Study Results1

Ore Reserve

14.3Mt @ 1.98g/t gold for 907koz contained

LOM Strip Ratio (waste t : ore t)




Life of Mine

7.2 years

Processing Recovery


Recovered Ounces


Average Annual Production


Pre-production Capital Costs2


Sustaining Capital Costs3




Gold Price




Gross Revenue




LOM Net Revenue (net of royalties4 and refining)




Operating Cash Flow pre-tax




Project Cash Flow pre-tax




NPV(5%) pre-tax




NPV(5%) post-tax5




Payback pre-tax

3.0 years

2.2 years

1.6 years

Payback post-tax

3.3 years

2.5 years

1.8 years

IRR pre-tax


48% pa


IRR post-tax5


40% pa


LOM C1 Cash Costs6




LOM All-In Sustaining Costs (‘AISC’)7




  1. All economics are 100% attributable to Emerald
  2. Includes US$4.4M of capital spares and first fills and US$7.0M of mining capital and pre-production mining costs
  3. Includes US$14.4M of rehabilitation and closure costs

4 Royalties include Government royalty of 2.5% gross and a third party royalty of 1.5% gross (capped to A$22.5M)

5 Taxation is based on current and draft Cambodian tax law and does not allow for any incentives or tax relief

  1. C1 Cash Costs include site based mining, processing and admin operating costs plus transport and refining costs
  2. Includes C1 Cash Costs plus royalties, sustaining capital costs, contributions to environmental & community funds and rehabilitation & closure costs

Project Implementation

Emerald will manage the construction and development of the Project with its own internal construction team. Key senior members of this team have been actively involved in the DFS and have many years’ experience working together on the development of other successful gold projects, within Australia and Overseas. Certain works will be outsourced to independent consultants and contractors as required. 

Cambodia is well located for the cost effective procurement of key equipment and materials. An important objective will be to maximise the extent of procurement from within Cambodia.

Key Project milestones being targeted by the Emerald development team are shown below.

Okvau Gold Project Schedule

Next Steps

Given the completion of the DFS and targeted development for commencement late in the 4th Quarter of 2017, Emerald is focussed on:

  • Procuring project approvals and permitting including environmental approval of the completed Environmental & Social Impact Assessment (‘ESIA’) and an Industrial Mining Licence which is to be supplemented with a Mineral Investment Agreement with the Royal Government of Cambodia
  • Securing requisite project funding
  • Identifying additional cost-saving measures from the forecast capital and operating expenditure
  • Optimising open pit staging and scheduling
  • Pursuing an active exploration program aimed at discovering nearby additional gold deposits that can deliver additional mill feed to the Okvau Gold Project. This will include a dedicated effort to expand Emerald’s already substantial 400km2 ground position. Significant progress is being made in this area.

Growth Potential

Substantial opportunities exist for new gold discoveries across the broader Okvau and adjoining O’Chhung project areas covering approximately 400km2 (refer Figure One). Further drilling around the Okvau Deposit and exploration targets within close proximity to the Okvau Deposit offer an opportunity to expand the existing resource inventory and add to the current production target, both in terms of annual production and mine life.

The Okvau Deposit remains open to the north and north-east where anomalous gold-in-soils and geophysics indicate the potential for additional mineralisation.

This DFS has only considered an open pit mining operation.  The Okvau Deposit remains ‘open’ at depth with high grade shoots providing longer term underground potential. High grade resources have been defined immediately below the floor of the final pit design.

Emerald Licence Position with Surface Geochemistry

Historical drilling results beneath the DFS pit design include (refer Renaissance Minerals Ltd ASX announcement 17 September 2012):

  • 17m @ 4.5g/t gold from 320m (DD11OKV091)
  • 11m @ 8.4g/t gold from 399m (DD11OKV091)
  • 10m @ 9.7g/t gold from 411m (DD12OKV108)

Emerald recently drilled two deep diamond core holes to test for strike and down dip continuity of high grade gold zones intersected with previous deeper drilling. Results included (refer Figure Two):

  • 3m @ 14.3g/t gold from 432m (DD16OKV372)
  • 6m @ 9.7g/t gold from 520m (DD16OKV373)

Depth Potential at the Okvau Gold Deposit