HomeEast AfricaOreCorp completes ECI process for Nyanzaga Gold Project

OreCorp completes ECI process for Nyanzaga Gold Project

OreCorp has announced that the ECI process for the development of the Nyanzaga Gold Project is complete. The company’s subsidiary, Sotta Mining Corporation awarded ECI contracts earlier this year to both Ausenco Services and DRA Global following the DFS completed in August 2022.

The DFS pre-production capital cost estimate for the Nyanzaga Gold Project totalled $US 474 million, which included mine establishment, process infrastructure, non-process infrastructure, accommodation village, resettlement, operational readiness and a $US36 million contingency. Of the original DFS pre-production capital cost estimate, the ECI scope was $US215 million.

The Nyanzaga Gold Project ECI process involved Ausenco and DRA, in parallel but independently, completing early engineering and design activities, including value identification and optimisation studies. This comprised development for the process plant and related infrastructure, engineering plans, schedules, execution methodology, resource requirements and cost estimates.

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Ultimately, the aim of the ECI process was to deliver the EPCM package for the Nyanzaga Gold Project. Detailed costings were developed through consultant databases and supply market verification, including tendering of the comminution equipment supply.

The revised pre-production capital cost estimates and project schedules submitted by both Ausenco and DRA identified notable savings and importantly, did not exhibit the significant cost inflation recently seen in some projects in Western Australia and other jurisdictions.

Cost savings for the ECI/EPCM scope were in the order of 9% to 13% (of the ECI/EPCM scope) which relates to an overall Project cost saving of between 4% to 6% compared to the DFS pre-production capital cost estimate. Optimisation work identified reductions in the project schedule of approximately 14 weeks.

An executable EPCM contract, which was an ECI deliverable, has been provided by both Ausenco and DRA. Both contracts include incentivisation for the successful EPCM consultant to achieve costs, schedule and safety targets as defined in their ECI submissions.

Completion of the process, by both Ausenco and DRA, was within the agreed timeframe and contract sum. OreCorp is very pleased with the outcome of the ECI process and will continue to evaluate the ECI submissions, considering the proposed transaction with Silvercorp Metals Inc. which the company is currently progressing.

OreCorp CEO & MD Henk Diederichs commented:

“The initial findings of the ECI submissions provide confidence that the capital cost estimate and project schedule, developed during the DFS, are conservative and targets are achievable.

“The ECI process has provided OreCorp with valuable data including current market rates from suppliers and contracting companies operating in Tanzania and will be beneficial in the continued optimisation and progress of the project.”