The Asia Miner

APR-JUN 2017

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

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Volume 14 • Issue 2 | 2017 | ASIA Miner | 33 Philippines MEDUSA Mining has made significant progress on its five focus areas of development at the Co-O Gold Project - E15 service shaft; mine ventilation upgrade; mine de-watering expansion; Level 8 drilling sta- tions for resource expansion; and prioritised mine development. The company says the benefits of work on some of these ar- eas will start to be felt in the second half of this financial year while others, including the service shaft, will not feed through until the following financial year. Medusa said production in the December quarter was affected by additional maintenance work. In the six months to December 31 it produced 38,507 ounces of gold, compared to 61,169 ounces in the same period of 2015, at an average recovered grade of 5.02 g/t versus 6.80 g/t the year before. The company has revised its production guidance range for this financial year from 105,000-115,000 ounces to 85,000-95,000 ounces. All-in sustaining costs of between US$1250 and US$1350 per ounce are forecast, an increase from the previous guidance of US$1000-$1100. The original guidance was presented as being back-end loaded, but with poor results for the December quarter when 17,350 ounc- es were produced, the production plan for the second half does not have the flexibility to recover lost production. The poor production relates to reduced grades due to the in- creased amount of development ore in the mill feed blend. Overall mine production output has been below plan and Medusa says the tonnage shortfall relates to higher L8 mine-shaft maintenance requirements, which impacted hoisting availability. The company expected the hoisting issue to be resolved in the March quarter, allowing it to deliver to the back-end loaded full year plan, albeit later than the original guidance. Co-O resources have been re-estimated at 961,000 ounces, which Medusa says is a robust number considering its 10-year production history and last year's production of 108,578 ounces. The first half resource drilling of approximately 23,000 metres is a significant investment in expanding Co-O's down dip potential. This rate will continue throughout the second half with the intent to re-building the resource and reserve base. Exploration activities have been aligned to a new strategy, with increased focus on near-mine activities while regional targets that have not returned expected results will be rationalised. The regional focus also includes exploration prospects outside Medusa's tene- ment position. A PROLONGED period of incessant rainfall has been a major fac- tor in hampering the plans of Metals Exploration to get its Runru- no Gold Project in Nueva Viscaya province up to full speed. The project is currently in the 'test running and debugging' phase. The UK-based company says that despite gold doré being pro- duced during the testing, the progress in ramping up has been slower than expected owing to the persistent heavy rain and other factors that have restricted the effective mining of waste materials. This, in turn, has adversely impacted the grade and sulphur content of ore available for processing. Metals Ex says that mechanically both the mining fleet and the processing plant have operated soundly. During these tricky circumstances at Runruno, which is about 340km north of Manila, the company continues to closely man- age its working capital requirements. Metals Ex first became involved with the Runruno deposit in 2005 and has undertaken extensive scientific and geological surveys since, with extremely encouraging results. The Nueva Viscaya area has been known to be abundant in gold and other precious metals since the early 2960s and has enjoyed a varied exploration history. In May 2010 the company announced the results of the Run- runo feasibility study which confirmed the viability of the project, projecting average annual production of 96,700 ounces of gold over a mine life of 10.4 years, at an average forecast operating cost $477 per ounce before any molybdenum credits. Runruno is a surface mine operation and uses the proven BIOX and carbon-in-leach processes to recover gold and molybde- num. Work has defined a resource of 1.42 million ounces of gold and 25.6 million pounds of molybdenum with 900,000 ounces of gold reporting to the measured and indicated categories and 780,000 ounces within the mining proven & probable reserve category. The deposit is within a large alkaline volcanic complex, ap- proximately 3.5km in diameter, of which less than 15% has been effectively explored presenting substantial exploration upside. Medusa progresses Co-O's five pillars Incessant rain hampers Runruno ramp-up Mine workings at the Runruno Gold Project of Metals Exploration.

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