The Asia Miner

JUL-SEP 2017

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

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14 | ASIA Miner | Volume 14 • Issue 3 | 2017 Papua New Guinea AN addendum to the feasibility study for PanAust's Frieda River Copper-Gold Project has upgraded resources and added reserves. Measured and indicated copper resource at the HITEK (Horse- Ivaal-Trukai-Ekwai-Koki) deposits increased 8% while ore reserves increased 13%. The global HITEK measured and indicated resource increased from 1.846 billion tonnes @ 0.44% copper to 1.860 billion tonnes @ 0.47% copper. This was primarily due to the conversion of about 120 million tonnes from the inferred category to indicated at Ekwai and Koki deposits. Ore reserves increased by 13% to 686 million tonnes @ 0.5% copper and 0.28 g/t gold as a result of the upgrading of Ekwai and Koki resources along with improvements to the open pit de- sign incorporating interim stage designs and water management structures. Behre Dolbear Australia (BDA) completed an independent review of the feasibility study and addendum. BDA concludes that the study and addendum pro- vides a study of a standard that could be provided to lenders for consideration of finance. Frieda River represents one of the world's largest undeveloped copper-gold deposits. The HITEK global resource is now estimated to contain 2.64 billion tonnes at an average grade of 0.44% copper and 0.23 g/t gold representing 12 million tonnes of copper and 19 million ounces of gold. The addendum confirms the feasibility of an initial project based on the HITEK porphyry deposits and comprising a large-scale, open-pit operation that supplies a conventional process plant with a nominal annual capacity of 40 million tonnes. Average annual production of metal in concentrate is 175,000 tonnes of copper and 240,000 ounces of gold. Initial mine life is estimated at 18 years with 714 million tonnes of mill feed that in- cludes 686 million tonnes of ore reserve. The mill feed represents approximately 25% of the global resource. The project will have a competitive C1 cost of US$0.69/lb cop- per, which places it within the first quartile of the global copper cost curve. There remain multiple pathways to further expand and extend the initial project with potential development scenarios indicating that mill feed could be increased to potentially 1.7 billion tonnes. The project is held by the Frieda River Joint Venture, which is 80% owned by PanAust and 20% by Highlands Pacific. THE Simberi Gold Project of St Barbara produced a record 30,430 ounces during the March quarter at an all-in-sustaining cost (AISC) of A$1025 per ounce. This exceeded the 28,057 ounces produced in the previous quarter at an AISC of A$1277 per ounce. St Barbara said the improved AISC was due to higher production and improved grade and recovery, together with the benefit of lower ore handling costs. Grade improved to 1.14 g/t from 1.13 g/t in the December quarter. Total material moved in March quarter was 3.5 million tonnes, down on the previous quarter due to planned maintenance of the excavator fleet and lower strip ratio. The strip ratio decreased to 2.4, consistent with the life of mine plan. The company said the high intensity program of pre-stripping required to access new ore sources at Sorowar and Pigiput was largely complete. Plant recovery improved to 85% from 83% due to ongoing im- provement in ore and waste mining identification and selection, im- proved quality ore, particularly from Pigiput, as well as incremental operational improvements in the processing plant. The company has increased its 2017 guidance for Simberi from 95,000-105,000 ounces to between 105,000 and 110,000 ounc- es at an AISC of between A$1285 and A$1330 per ounce, down from between A$1330 and A$1490. Proposed capex is unchanged at between A$4 million and A$5 million. At Tatau Island trenching, mapping and drilling continued at the Southwest Tatau project during the March quarter targeting high- grade sulphide-oxide gold mineralisation at Mt Tiro, Mt Siro and Seraror prospects. A detailed topographic map was generated from airborne LiDAR (light detection and ranging) survey flown in the December 2016 quarter to support regional exploration. A 43 line kilometre ground magnetic survey was completed in March. Areas covered included access tracks around Southwest Tatau as well as a soil grid over Talik. Diamond drilling at Southwest Tatau continued during the March quarter with nine diamond holes for 748.1 metres completed. Eight trenches were completed at Mt Siro with results including 25 me- tres @ 1.7 g/t, 75 metres @ 2.3 g/t, 10 metres @ 3.1 g/t and 30 metres @ 1.2 g/t. Record quarterly production at Simberi PanAust managing director Dr Fred Hess and Frieda River site manager Phil McCormack inspect drill core. Addendum boosts Frieda River reserves

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