The Asia Miner

JAN-MAR 2016

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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38 | ASIA Miner | Volume 13 • Issue 1 | 2016 Papua New Guinea CRATER Gold Mining expected to be operating at full mining ca- pacity at its High Grade Zone (HGZ) project by the end of 2015 following completion of a mining plant upgrade. At full capacity the company anticipates producing 10,000 ounces of gold in the frst full year of production at an all-in cash cost of less than $400 per ounce over the mining lease term. In its September quarterly report, Crater Gold said a complete gold processing plant was being shipped to site while it was install- ing an additional compressor, generator and switchgear, another excavator and a compressed air bogger. The ASX-listed company began producing gold from HGZ at Cra- ter Mountain in May 2015 and production has been ongoing. It has recently secured Aus$3.4 million in a well-supported two-stage capital raising which was aimed at helping achieve full mining ca- pacity and positive cash fow by the end of 2015. This capital raising comprised two tranches with the frst tranche of Aus$1.3 million issued to a selection of international institutional investors and family offces. The second tranche of Aus$2.1 mil- lion was issued to Freefre Technology on the same terms, thereby maintaining Freefre's 62% holding. Drive development is continuing on gold bearing veins within the HGZ delineated from previous underground development and dia- mond drilling carried out in 2014. The veins are being developed at a narrow width. Additional drives are being commenced, increasing the number of headings being developed. Mining Development is being undertaken in right drives on miner- alized gold-bearing structures at the 1960 RL Adit. The drives are on the NV1 (North Vein No1), NV2, NV4, EV2 (East Vein No2), EV4, JL (Jeremiah Lode), JL2 and JL3 veins. Crater Gold stated in its quarterly report: "The HGZ project is a high margin operation. The HGZ mine will generate strong cash fows, which will fund further expansion at the HGZ mine and enable further exploration activities at the company's other assets. As our mining activities accelerate, revenue will rise exponentially. "While the current focus remains on the HGZ mine, there remains potential to increase the current JORC compliant resource of 24 million tonnes @ 1.0 grams/tonne gold for 790,000 ounces at the nearby Mixing Zone project at Crater Mountain." Crater Mountain is 50km southwest of Goroka in Eastern High- lands Province. There has been more than 14,500 metres of di- amond drilling to date, the majority focused on Nevera prospect which hosts HGZ. SIGNIFICANT channel sample results have been received from on- going exploration at WCB Resources' Umuna Gold Project on Mis- ima Island. The sampling recently identifed a major fault splay east of the main Umuna zone with positive initial results. Preliminary results include 38 metres @ 1.36 grams/tonne gold, 10 metres @ 1.0 grams/tonne and 31 metres @ 0.40 grams/tonne. The sampling is part of an ongoing systematic exploration program which continues to upgrade the project in preparation for further drill testing. Exploration has focused on the identifcation and validation of near-surface strike extensions of gold mineralization. Recent mapping at Ginesia to the southeast identifed a signifcant fault zone with base metal vein stockwork and disseminations. Initial interpretation of this zone based on map data, indicates a major strike parallel structure to the adjacent Tonowak zone. Both zones are fault splays at an oblique angle to the Umuna zone. At the intersection of these splays with the Umuna Zone, exaggerated thickness (up to 50 metres) and higher than average grades (above 2.5 grams/tonne) are observed over a distance upwards of 300 metres. This is the region where recent pit optimizations extend to depth as part of the recent indicated resource upgrade. WCB's president and CEO Cameron Switzer said, "The recognition of the mineralized Ginesia fault zone is exciting as not only does it sug- gest signifcant near-surface oxide mineralization potential, but the zone appears to have a reasonable width with a prospective strike length defned to date of more than 700 metres. "This area will continue to be a focus for further exploration activities as the defnition of near-surface oxide resources in this region has the scope to signifcantly enhance potential project economics." Misima Island has previously demonstrated mineral deposit ped- igree through past production of 4 million ounces of gold and 20 million ounces of silver from various operations but most recently the Misima Mine owned by Placer Dome Asia Pacifc. This mine ceased open pit production in 2001 and closed in 2004. WCB can earn up to a 70% interest in the exploration licence Misi- ma from Pan Pacifc Copper, through its subsidiary Gallipoli Explora- tion (PNG) Ltd, by spending a total of Aus$9 million within a staged timeframe subject to standard regulatory approvals. WCB has obtained an initial 30% equity interest in Gallipoli with an additional 19% being formally registered. The company is also progressing towards an additional 21% interest. Upgrade for HGZ mining plant Signifcant results from Umuna project A drill site at WCB Resources Umuna Gold Project on Misima Island in Pap- ua New Guinea's far east.

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