Targeting gold production, unlocking VMS potential
SXG has announced interim results for the Feasibility Study on the Marda Central base case production scenario of a minimum initial production rate of 30,000ozpa over five years. (Click here to read the announcement.) The Feasibility Study interim results define a robust initial Base Case based on a centrally located 400ktpa gold plant at Marda, WA. The Base Case production is to be sourced from JORC Measured and Indicated Resources of 4.3Mt @ 2.15 g/t Au for 300,000oz which form part of the total resource base of Measured, Indicated and Inferred Resource of 8.8Mt @ 2.07g/t Au for 590,000oz. 90% of Base Case production will be sourced from JORC Measured Resources.
The Feasibility Study interim results demonstrate a technically robust mining operation with anticipated life-of-mine (LOM) parameters as follows:
| Item | Description / Estimate |
|---|---|
| Whittle Optimisations Results | 1.8 million tonnes @ 2.58 g/t Au |
| Mining method | Open Pit |
| Processing rate | 400,000 tonnes per annum |
| Metallurgical recovery | 95% |
| Average annual gold production | 31,500 ounces per annum |
| C1 cash operating costs | A$790 per ounce recovered |
| Pre-Production Capital Cost | A$55 million |
| Pre-tax operating cashflow | A$130 million |
| Annual sustaining mine capital | A$2 million |
| Construction commencement | H2 calendar year 2012 |
| First production | H1 calendar year 2013 |
The interim results are based on detailed feasibility study work conducted to date particularly the updated resource estimate, Whittle pit shell optimisations and capital and operating cost estimates. Work required to finalise the feasibility study includes additional metallurgical optimisation testwork, geotechnical analysis and detailed documentation.
SXG will continue to advance opportunities to enhance the Base Case including conducting in-fill and extensional drilling at the Company’s existing deposits and prospects to define additional Measured and Indicated resources in the Marda region, including:
The Company has the flexibility to schedule high grade production from existing deposits to maximise gold production and cash flow in the early years of the proposed operation. The potential definition of additional Measured and Indicated Resources at the Company’s regional deposits and prospects would provide the opportunity to upgrade the throughput rate of the proposed modular process plant. There is significant leverage from even moderate increases to the annual gold production rate to enhance the initial Base Case.
High grade mineralisation has been intersected below the Whittle open pit optimisations particularly at the Battler, Golden Orb and King Brown deposits and below existing workings at the historic Radio gold mine.
The Company holds a dominant and strategic 4,000 square kilometre exploration footprint in the Marda and Southern Cross region. Present year drilling results at the Company’s gold and base metals projects have demonstrated that the region remains highly prospective for additional discoveries. A recent review of the exploration potential in the Marda region (refer September, 2011 Quarterly report) has identified several high priority targets.
The next steps for the Company in regards to the Feasibility Study include:
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SXG A$0.037
A$1,617 oz