Excelsior Gold pleased with Kalgoorlie North PFS results

THE DRILL SERGEANT: Excelsior Gold (ASX: EXG) has received positive results from a Pre-Feasibility Study (PFS) into the development of the company’s Kalgoorlie North gold project.

The PFS was based on development of a multiple open pit and underground mining operation centred on the Zoroastrian gold system located 45 kilometres north of Kalgoorlie in Western Australia.

Excelsior said the results of the PFS demonstrate the project to potentially be a solid base case gold operation, which it expects to be able to develop through further underground and open pit Ore Reserve conversion and expansion and refinement of capital and operating cost estimates.

 

Source: Company announcement

The PFS featured construction of a new standalone one million tonne per annum conventional carbon in leach gold treatment plant to process ore sourced from large open pits at the Zoroastrian and Excelsior deposits and seven smaller satellite pits as well as underground ore from the Zoroastrian gold system.

The final mining phase of the PFS was calculated using an increased gold price of $1,450 per ounce to reflect the current gold price ($1,507/oz at 2 March 2014) and currency exchange rate forecasts for a potential production term from 2016 to 2024.

The PFS Ore Reserves stand at 7.64 million tonnes at 2 grams per tonne gold Au for 491,600 ounces of gold, which were derived from total project Measured and Indicated gold Mineral Resources of 15.6 million tonnes at 1.80g/t gold for 899,800 ounces of gold.

The PFS results include the addition of another Mineral Resource at El Dorado, into the Ore Reserves as well as a reduction in processing costs that were excluded from the interim PFS Ore Reserves earlier this year.

“The new Ore Reserve represents a refinement and extension of the prior interim PFS Ore Reserve open pit and underground mine designs as part of the detailed second pass process to provide optimal results,” Excelsior Gold said in its ASX announcement.

“In the case of Zoroastrian, previously economic material, based on a gold price of $1,375 per ounce, was omitted due to the selection of the suboptimal revenue factor (RF) 0.78 Whittle shell.

“The new Zoroastrian open pit Ore Reserve has utilised the RF 1.0 shell at a $1,450/oz gold price, resulting in a larger open pit and subsequent increase of almost 500,000 tonnes of ore and approximately 38,000 ounces of gold.”

Excelsior declared the current Ore Reserve position demonstrates a potential 7.5 year life of mine, explaining the expected production scheduling indicates improvements in project economics can be achieved by the inclusion of additional higher grade underground ore feed into the milling schedule.

“The PFS Ore Reserve, operating and capital cost estimate is a solid base from which the company now expects to significantly expand open pit and underground gold Ore Reserves and focus on cost reductions to enhance the project economics,” Excelsior said.

“At a time of apparent improving gold price, depreciating exchange rate and more positive investor sentiment, the company intends to devote its resources to improving the economics of the project.

“Subject to available capital the company will initiate further dedicated drilling programs to expand the Ore Reserves to in excess of 600,000 ounces of gold during 2014 in order to extend the potential mine life and drive improved return on capital investment.”

Email: admin@excelsiorgold.com.au

 

Website: www.excelsiorgold.com.au