The Asia Miner

JUL-SEP 2017

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

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48 | ASIA Miner | Volume 14 • Issue 3 | 2017 A DEFINITIVE feasibility study (DFS) has confirmed that Emerald Re- sources' Okvau Gold Project in Cambodia is robust and compel- ling. The DFS is based on a 2 million tonnes per annum operation and an ore reserve of 907,000 ounces. The company's Board has approved the project to proceed to construction subject to financing arrangement and permitting, in- cluding a Mineral Investment Agreement with the Royal Government of Cambodia to support an Industrial Mining Licence. The DFS confirms Okvau's robust nature with an initial operating Life-of-Mine (LOM) of more than seven years, annually producing approximately 106,000 ounces from a single open pit. Ore will be processed through a 2 million tonnes/annum plant utilising a single stage crushing circuit and SAG mill, sulphide flotation, regrind mill followed by conventional cyanide leaching. The initial ore reserve is 14.3 million tonnes @ 2.0 g/t with average AISC of US$731/ounce. The updated resource estimate is 17.7 million tonnes for 1.14 million ounces with 1.01 million ounces as indicated and 130,000 as inferred. The LOM strip ratio is 5.8:1, and processing recovery is 84% for 762,000 recovered ounces. Emerald managing director Morgan Hart said: "The Emerald team has delivered a maiden reserve of just under 1 million ounces along with a DFS demonstrating the exceptional economics of Okvau, all of which has been achieved within 12 months of Emerald becoming formally involved in the project. "The results of the DFS, including a pre-tax NPV (5%) of approxi- mately A$300 million with IRR of 48% pa, vindicates Emerald's de- cision to acquire 100% ownership. Importantly, given the reserve grade and moderate strip ratio, the project has low AISC of US$731 per ounce over the LOM. "This will be the first large-scale gold project to be developed in Cambodia and Emerald is confident this first mover status will result in a number of growth opportunities." Given completion of the DFS and with targeted development due to commence late in the fourth quarter, Emerald is focused on: • Procuring project approvals and permitting; • Securing project funding; • Identifying additional cost-saving measures from the forecast capital and operating expenditure; • Optimising open pit staging and scheduling; and • Pursuing an active exploration program aimed at discovering nearby additional gold deposits that can deliver additional mill feed to the project. DISCUSSIONS are ongoing between FYI Resources and China's Yuntianhua Group (YTH) regarding the Sino-Lao Potash Project joint venture. The companies are continuing to refine a common de- velopment strategy on the project and to explore various equity, expansion, production and capital expenditure options. FYI and its legal team have made a number of visits to Laos and Kunming, China, this year and the key negotiating points between the parties remain the joint venture structuring and the valuation of various components of the project. Ultimately, the final decision on any joint venture agreement will be subject to approval from the Chinese State owned Assets Super- vision and Administration Commission (SASAC), which is charged with the responsibility of preserving and enhancing the value of state-owned assets and has final oversight on the transaction terms and conditions. In its Q1 report, ASX-listed FYI advised that no field work was un- dertaken during the quarter while the high-level JV discussions are progressed and that due diligence on the project, which is owned by YTH, is still to be finalised. The company did, however continue its internal reviews of the Sino-Lao project and assessing of the extensive technical infor- mation to determine the array of possible development option schedules and capital requirements in order to recommence operations. The company's Sino-Lao due diligence review aims to verify de- posit quality and evaluate the overall development potential. As well as continuing JV discussions and due diligence, during the remainder of 2017 FYI aims to review selected components of the database, and undertake metallurgical studies and process design in respect to the unusual deposit characteristics. FYI's managing director Roland Hill met with the Deputy Prime Minister of Laos, Dr Bounthong Chitmany, informally in Melbourne, earlier this year with a number of other delegates involved in the Lao mining and mining services sectors to discuss the various issues facing the industry and separately, private lobbying for FYI's potash interests. FYI considers the South East Asian potash sector to be of world- class standard and it continues to review potential commercial op- portunities. Furthermore, FYI is continually introduced to project opportunities in a variety of commodities and will continue to review selected proj- ects with the purpose of delivering value. Sino-Lao Potash Project discussions continue The camp at Emerald Resources' Okvau Gold Project in eastern Cambo- dia's Mondulkiri province. Okvau 'robust and compelling'

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