Feasibility Study
SXG has commenced a Feasibility Study on the Company's base case production scenario of a minimum initial production rate of 30,000ozpa over five years. The opportunity exists to increase this minimum initial production rate to 50,000ozpa with extensions to its existing deposits, the inclusion of production potential from its existing regional prospects (Andromeda, Blue Peter, Evanston) and regional consolidation activities including Barranco Resources NL (Red Legs and Die Hardy deposits – 140,000oz) and Renaissance Minerals (Radio gold mine). The Feasibility Study is expected to be completed in calendar year 2011.
The Company aims to provide guidance on the production potential and capital and operating costs of its proposed Marda gold project following updates to resource estimates and mine plans expected to be completed in the September Quarter, 2011. Pending the results of the feasibility study, SXG would then approach financial institutions regarding project financing arrangements and hedging programmes in the December Quarter, 2011. Production is targeted for mid to late calendar year 2012 subject to the results of the feasibility study and financing.
Feasibility Study and project development activities required for each deposit are being undertaken by independent consultants assisting SXG. Work to be undertaken includes:
- In-fill and extensional drilling;
- Updated resource estimates;
- Geotechnical drilling and analysis;
- Additional metallurgical sampling and testwork;
- Process flow sheet design and capital and operating cost estimates;
- Updated mine designs and operating cost estimates;
- Infrastructure cost estimates;
- Environmental studies and approvals..
A comprehensive project development and approvals schedule for each deposit is being developed. This will provide an estimate of the lead times involved prior to potential production from each deposit.