Targeting gold production, unlocking VMS potential
Southern Cross Goldfields (ASX Ticker: SXG) is an Australian mining and exploration company that is on the move. Investors in SXG are exposed to a compelling combination of near-term cash flow and outstanding exploration potential in the gold sector.
Following its recent merger with Polymetals Mining Limited, Southern Cross Goldfields holds a diversified gold and base metal portfolio in Western Australia and New South Wales spanning projects at development, scoping study and exploration stage.
The Company holds a strong emerging pipeline of production assets at Marda in WA and Mt Boppy in NSW with the potential to support a near-term production profile of up to 69,000 ounces of gold per annum at competitive forecast cash operating costs, commencing in 2014.
SXG also offers outstanding exploration upside within an extensive portfolio covering 4,500 km2 in Western Australia within the under-explored Southern Cross and Sandstone greenstone belts and the Pilbara region, and 200 km2 in the highly prospective Lachlan Fold Belt of NSW.
SXG completed a feasibility study for the development of a new greenfields gold operation at its Marda Gold Project in May 2012. This study generated positive results, targeting an initial gold production rate of 35,000 oz per annum over five years from SXG’s internal resource base, treated through a centrally located 480,000 tonne per annum gold processing facility.
In August 2012, SXG announced a landmark agreement to acquire the Sandstone Gold Project assets from Troy Resources. This company-changing transaction gives SXG access to a fully permitted 600,000 tonne per annum CIL gold plant which can be relocated to Marda – an acquisition which will significantly reduce the time and cost involved in starting gold production.
In parallel with development at Marda, SXG is also pursuing near term production through the redevelopment of the Mt Boppy Gold Mine in NSW, acquired through the recent merger with Polymetals Mining.
A January 2013 Feasibility Study for Mt Boppy proposes a cut-back of the open pit and refurbishment of the existing plant to process 300,000tpa of ore. Over two years the project will produce a total of 69,000 oz of gold. All key permitting is in place.
SXG holds a commanding 5,100 km2 tenement position in the Southern Cross region, and the Company’s exploration strategy is focused on delineating additional resources at nearby deposits that would augment the potential gold operation at Marda.
A recent independent regional exploration review confirmed that the Marda region is highly prospective for additional discoveries especially along the Evanston Shear Zone, Golden Orb-King Brown Trend and Andromeda Trend where significant mineralisation has previously been intersected.
Southern Cross has discovered a highly prospective Volcanogenic Massive Sulphide (VMS) trend extending over 18km at its Copper Bore Project, with drilling confirming multiple occurrences of copper-gold mineralisation. A down-hole electro-magnetic (DHEM) survey of drill holes along a 10km trend between the Copper Bore and Southern Gossan prospects has identified numerous new targets for drill testing.
SXG’s nickel interests are being progressed under an agreement with Western Areas NL, whereby Western Areas holds 70% of the nickel rights across much of SXG’s tenement package. Multiple nickel sulphide targets have been identified within SXG’s Bullfinch North tenements, which include a 66km strike length with known favourable nickel sulphide host rocks. SXG’s agreement with Western Areas ensures that appropriate focus and resources are allocated to testing the nickel potential of the Marda and Southern Cross tenements, while also providing SXG shareholders with a highly leveraged exposure to any exploration success.
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