Silver Lake to commence Wombola production

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THE BOURSE WHISPERER: Silver Lake Resources is about to commence gold production from the Wombola pit, which is part of the company’s Mount Monger operations.

Production from Wombola is due to commence in March with open pit production also being sourced from Wombola Dam starter pit.

The Wombola pit is located nine kilometres northwest of the Daisy Milano mine and boasts a current JORC gold resource of 460,200 tonnes at 2.9 grams per tonne for 42,300 ounces of gold.

 

Mount Monger Operations location plan. Source: Company announcement

“Gold mineralisation is contained within 50 metres of the surface in a series of steep north-west dipping quartz veins hosted within the Wombola dolerite and extends in several directions and remains open,” Silver Lake Resources said in its ASX announcement.

“Wombola pit is located on granted mining leases and was previously mined in the 1980’s producing 87,000 tonnes at 2.9 grams per tonne gold for 8,000 ounces.

“Metallurgical test work has been completed and the ore is free milling and ideally suited for processing at the Lakewood Gold Processing Facility (LGPF) located 40 kilometres away.”

Silver Lake said that commencing the project in March 2012, allows additional ore stock available for feed in readiness for stage 2 upgrade of Lakewood Mill to one million tonnes per annum in the September quarter 2012, which is currently on target.

Upon completion of the Wombola Dam starter pit Silver Lake will conduct further drilling below 30 metres depth with grade control and depth drilling to be carried out within the conceptual big pit shell.

Silver Lake is targeting to increase production from the Mount Monger operations to 200,000 ounces per annum by 2014 via mining from multiple underground and open pit ore sources.

Silver Lake’s Mount Monger operations have a current JORC resource of 5.1 million tonnes at 8.9 g/t for 1.5 million ounces of gold.

Scoping Study okays Aphrodite gold project

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THE BOURSE WHISPERER: Aphrodite Gold booked a table in The Roadhouse’s lounge bar last week and invited a few members of the resources press gallery over for lunch and to hear about the company’s recently completed scoping study.

The Aphrodite gold project is located 65 kilometres north of Kalgoorlie in the Eastern Goldfields of Western Australia.

In March last year the company released a 1.033,000 Ounce JORC Resource at Aphrodite comprising 10.06 million tonnes averaging 3.19 grams per tonne gold for a total of 1.033 million ounces in JORC compliant Indicated (451,000 Ounces) and Inferred (582,000 Ounces) Resource categories.

 

Aphrodite JORC Resource. Source: Company announcement

 

By September the company had commissioned a Scoping Study to determine a preferred mining and processing scenario for Aphrodite.

Two consultancy firms, Tetra Tech Australia and Mineral Engineering Technical Services (METS) were selected to complete the study.

Tetra Tech conducted the mining related part of the study, including estimates for capital and operating costs, and the overall economic analysis for the project, while METS was engaged to determine the preferred method for processing the Aphrodite ore including associated capital and operating costs.

“The two independent consultants that were involved in the Scoping Study both recommended that we go to a Prefeasibility Study,” Aphrodite Gold executive director exploration and development Leon Reisgys told the collection of chomping correspondents in attendance.

“The scoping study shows that we have potential to become a significant, cost-competitive gold producer.”

The Scoping Study analysed a number of mining scenarios in order to identify a preferred mining option for the company that will maximise resource recovery and project Net Present Value (NPV).

Pit optimisation was carried out using a conservative gold price of $1,350 per ounce to determine potential open pit and underground mining inventories and select a target plant throughput.

Open pit mining will be evenly distributed between two pushbacks to create two near symmetrical linked pits, on the Alpha and Phi lodes with an adjoining ‘saddle’.

 

Illustration of proposed mine design. Source: Company announcement

 

From this point a portal will be developed to access higher grade underground ore.

Mineralised linking structures between the lodes may reduce the size of the saddle between Alpha and Phi pits in the future.

The Study was able to assume 90 per cent process recovery for all material types during the pit optimisation process.

“The scoping study showed the preferred mining scenario to be contract operated mining with selective open pit and underground operations providing, in total, about five million tonnes of ore over the initial mine life,” Reisgys said.

“It also identified an on-site processing plant, processing at a nominal rate of around 750,000 tonnes per year.

“The plant has been scaled at one million tonnes to accommodate any continued rise in the price of gold, enabling us to put more feed through should we find another ore body nearby, which I think we will.”

To provide a basis for the Scoping Study Aphrodite conducted a metallurgical testwork program leading up to its commencement to determine the metallurgical properties of the project’s mineralisation.

This early testwork demonstrated the deposit to contain both free milling and refractory ore.

Importantly, the refractory material performed well during the flotation tests where a high gold grade, sulphide concentrate was produced at a very low mass pull.

Gold recoveries of 91.3 per cent were achieved in 2.9 per cent of the mass at a grade of 46.35 grams per tonne gold.

“We had a lot of people saying that because it is refractory ore we wouldn’t be able to process it and extract the gold,” Reisgys said.

“We have proven to the doubters that this is not the case.

“We carried out a lot of metallurgical work last year and the flotation work we conducted on core samples demonstrated that we can produce a low-mass, high-grade gold concentrate.”

Reisgys said, when in operation, the Aphrodite project will have an initial gold production of over 550,000 ounces of gold over a nine year project life with gold production peaking at around 84,000 ounces per annum over years two to six.

The NPV of the project, at current gold prices, is around $129 million, which compares favourably to the company’s current market capitalisation of around $9 million.

“At current gold prices we have a three year payback on the initial capital outlay,” Reisgys said.

“We also have potential to increase our production profile, which is currently based on the JORC resource estimate that was completed back in March 2011.

“The Board will be reviewing the scoping study work over the coming weeks and we expect to commence a prefeasibility study within the next few weeks.”

Nupower enters JV targeting phosphate

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THE BOURSE WHISPERER: Northern Territory-based phosphate exploration company NuPower has entered into a Heads of Agreement with private fertilizer company FERTOZ.

The deal is in regard to a joint venture (JV) into an exploration license owned by FERTOZ, which will be known as the ‘Barra Joint Venture’.

 

Location of Fertoz EL26915 with respect to Arganara and Warrabri Project EL’s. Source: Company announcement

Under the terms of the Barra JV NuPower can earn an initial 10 per cent through exploration expenditure totaling $100,000 during the first year.

Once it has qualified for that level of ownership, NuPower may then elect to earn an additional 40 per cent by solely meeting exploration covenants over the next 24 months.

NuPower will manage the JV throughout this initial three year earn period to a 50 per cent JV interest.

“Progressing beyond this point both FERTOZ and NuPower may elect to co-contribute towards the ongoing exploration and development or dilute at a rate of 10 PER CENT per $100,000 spent by the other party,”NuPower said in its ASX announcement.

“If either party reaches 90 per cent ownership then it can automatically move to 100 per cent ownership through dilution, leaving the minority party with a right to be paid 0.5 per cent of gross revenue from any operation that may be developed on EL26915.”

The Exploration License in question is located between NuPower’s Arganara and Warrabri phosphate projects.

At Arganara NuPower has defined an area of phosphate mineralisation through reverse circulation (RC) drilling of 205 holes with numerous intersections already reported above 30 per cent Phosphate.

“Mineralisation remains open both to the east and south and is intersected by a tenement boundary to the west,” NuPower said.

“Arganara mineralisation is hosted by the Arthur Creek Formation and or equivalents of the Georgina Basin.

“Interpretation by NuPower indicates the Arthur Creek Formation extends west from Arganara through the new Barra JV exploration license EL26915 before trending northwest towards NuPower’s wholly owned Warrabri Project licenses.”

Nupower said it intends to complete a Rapid Air Blast (RAB) drill program on the JV exploration license targeting phosphate during 2012.

Altona produces first Outokumpu concentrates

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THE BOURSE WHISPERER: Altona Mining has produced the first copper concentrate at the company’s Outokumpu project in Finland.

The company has been able to ramp up the concentrate grades quickly to the design grade of 24 per cent copper.

 

24% copper concentrate accumulating in the concentrate shed at the Luikonlahti processing plant. Source: Company announcement

 

Altona said this was a positive for the project as low grade feed is being used for commissioning of the Luikonlahti processing plant.

The concentrate has met the company’s expectations in that it is clean with no penalty elements.

Commissioning is now continuing using higher grade feed of 1.0 per cent to 1.5 per cent  copper.

Managing Director, Dr Alistair Cowden said

“We are now a producer!,” Altona Mining managing director Dr Alistair Cowden exclaimed in the company’s announcement to the Australian Securities Exchange.

“I am very proud of the team in Finland.

“To reach first production seven months after starting plant refurbishment is a great achievement.

“This is a significant milestone for the project following closely after achieving first production from the Kylylahti mine”.

The company said it expects to commence trucking concentrate deliveries the 400 kilometre journey to New Boliden’s Harjavalta smelter in south-western Finland this month.

This should result in first revenues being received in March.

Eastern Iron acquires all of Nowa Nowa

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THE BOURSE WHISPERER: Eastern Iron has exercised its option to acquire 100 per cent of the Nowa Nowa iron project in Eastern Victoria from Waygara Mines.

The transfer of the enclosing Exploration License to Eastern Iron was completed following approval from the Victorian Department of Primary Industries on 3 February 2012.

Under the terms of the option agreement Eastern Iron will be required to pay $100,000 and allot one million shares to Waygara on transfer of the title.

 

Location of Nowa Nowa iron project and infrastructure. Source: Company announcement

 

“We are pleased to have completed the acquisition of the Nowa Nowa iron project,” Eastern Iron managing director Greg De Ross said in the company’s announcement to the Australian Securities Exchange.

“The project is a strong addition to our existing portfolio and our current focus.

“The company has announced a maiden JORC resource estimate and is undertaking metallurgical test work that will allow us to expedite our evaluation of potential mining scenarios for the project.”

Eastern Iron recently announced a JORC Inferred Resource of 9.47 million tonnes at 49.1 per cent iron at a cutoff 40 per cent Total iron.

The company will be carrying out preliminary metallurgical test work investigating possible product scenarios.

According to Eastern Iron magnetite iron deposits at Nowa Nowa were drilled in 1955 by the Victorian Mines Department as a follow up to regional magnetic surveys.

Most drilling was centred on the largest of the magnetic targets, the Five Mile Deposit, with 27 cored drill holes completed.

Other nearby magnetic targets including the Seven Mile, Six Mile and Three Mile deposits have received some exploratory drilling but not to the same extent as Five Mile.

The company is of the opinion other potential sources of additional resource exist and these have been earmarked for further exploration.

Eastern Iron said it is investigating the potential to develop the Nowa Nowa iron deposits primarily as a source of feed for steelmaking operations.

St George identifies new Dragon

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THE BOURSE WHISPERER: St George Mining has claimed to have identified a new gold trend, the Golden Dragon gold trend, at the company’s 100 per cent-owned East Laverton property in the Goldfields region of Western Australia.

The company identified the Golden Dragon after it had conducted an MMI (mobile metal ion) soil geochemical survey in 2011, which focused on an area east of the Minigwal Fault.

 

The St George tenements at East Laverton. Source: Company announcement

 

This study extended one previously conducted by the company that identified the Red Dragon gold target.

St George said the recent survey had confirmed an anomalous gold zone that extends for approximately five kilometres of strike and remains open to the north, which defines the southern end of the Golden Dragon.

The total strike length of the Golden Dragon gold trend is inferred to be approximately 15km, of which only 5km has been tested.

“The Golden Dragon trend is by far the largest and most visible gold target we have identified to date,” St George Mining technical director Tim Hronsky said in the company’s announcement to the Australian Securities Exchange.

“The prominent nature of this gold target appears to be related to a highly favourable structural setting, occurring within a lower metamorphic-grade greenstone environment, similar to the Laverton area to the east.

“We are very excited about pursuing this new gold target, which is in an area where no known gold exploration has occurred.”

White Rock upgrades Mt Carrington

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THE BOURSE WHISPERER: White Rock Minerals has more than doubled its silver resources and lifted its gold resources by 50 per cent at its wholly-owned Mt Carrington project near Drake in northern New South Wales.

The total in‐situ gold‐equivalent* endowment of the six near‐surface resources on the project is now approximately 730,000 ounces.
*calculated at 52:1 silver:gold using metal prices of gold at US$1,650 per ounce and silver at US$32 per ounce and does not account for mining or metallurgical recoveries

The company said the updated Resource base at Mt Carrington provides it with the foundation to immediately commence conceptual mining studies with the aim of moving to pre‐feasibility studies from 2013.

 

Mt Carrington: Central Mining Leases gold – silver Resource locations. Source: Company announcement

“This resource upgrade, the first since our IPO in 2010, has exceeded our expectations and gives us confidence that we have a significant emerging gold-silver development project in an under‐explored high‐grade epithermal gold‐silver district,” White Rock managing director Geoffrey Lowe said in the company’s announcement to the Australian Securities Exchange.

“We have a quality Resource base on granted mining leases with a tailings dam, water reservoir and high voltage power in place.

“This provides us with an exciting opportunity to pursue near‐term development options.

“Further upgrades to the Resource base will be delivered as the project moves towards pre‐feasibility, along with an acceleration of the regional exploration program.

“We will commence a substantial drilling campaign on our portfolio of new near‐mine and regional exploration targets in the coming months, each of which has the potential to significantly upscale the project through a new high grade gold‐silver discovery.”

Key features of the updated Resource estimate are:

SILVER

–    The total silver Resource has increased from 10.5 million ounces to 23.3 million ounces;

–    Newly classified Indicated Resource of 4.3Moz silver;

–    Expanded Inferred Resource of 19Moz silver;

–    Mineralisation exists from surface to 250 metres depth and further Resource growth potential is evident along strike and down dip at the Lady Hampden and White Rock North deposits; and

–    Newly identified mineralisation at the Silver King deposit demonstrates expansion capacity.

GOLD

–    The total gold Resource has increased from 190,000 ounces to 284,000 ounces;

–    Newly classified Indicated Resource of 153,000 ounces of gold.

–    Expanded Inferred Resource of 131,000 ounces of gold;

–    Mineralisation exists from surface to 220m depth and further Resource growth potential is evident along strike and down dip at the Strauss and Kylo deposits.

Eastern Iron in the here and Nowa Nowa

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THE BOURSE WHISPERER: Eastern Iron has announced an initial JORC Code complaint Inferred Resource estimate for the company’s Nowa Nowa project located in Eastern Victoria.
 
The resource at a lower cutoff of 40 per cent total iron includes:

–    8.92 million tonnes at 49.2 per cent iron at the Five Mile deposit; and

–    0.55Mt at 48.3 per cent iron at the Seven Mile deposit where the company has conducted less drilling.

 

Source: Company announcement

“We are pleased to report an initial resource estimate for the Nowa Nowa iron project,” Eastern Iron managing director Greg De Ross said in the company’s announcement to the Australian Securities Exchange.

“We have continued to deploy a low cost model of growing the value of the company’s asset base, and this high grade resource estimate is a positive first step.

“It is encouraging to have defined a resource in a short period since acquiring the Nowa Nowa project and, as Eastern Iron’s primary focus, we will continue to investigate available options and scenarios for a potential mining and development with the objective of pursuing early stage cash flow generation.

“In addition to the potential to expand the resource through exploration of areas adjacent to the known deposits, the company is also planning large diameter core drilling to advance the metallurgical test work program with results anticipated in the coming months.”

Eastern Iron said the Resource had been classified as Inferred due to the fact it is based on drilling and assay data from work carried out in the 1950’s by the Victoria Department of Mines and is therefore unverifiable and that the lack of density measurements introduces a level of uncertainty.

Rox delivers Mt Fisher maiden

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THE BOURSE WHISPERER: Rox Resources has announced a maiden Mineral Resource for its 100 per cent-owned Mt Fisher gold project, located 450 kilometres north of Kalgoorlie in Western Australia’s goldfields region.

“In just twelve months we have established a maiden resource of almost one million tonnes and added considerable value to the company through exploration,” Rox Resources managing director Ian Mulholland said in the company’s announcement to the Australian Securities Exchange.

 

Mt Fisher mine – long section. Source: Company announcement

“We are confident further value will be added with follow up drilling later this year.

“Geophysical surveys carried out at Mt Fisher in 2011 identified numerous highly prospective gold targets which we will test this year.

“This is a major milestone for Rox Resources. We anticipate further milestones will be achieved over the next 12 months as we continue to define the resource, conduct pit optimisation and metallurgical test work.”

Winmar cashes up on share placement

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THE BOURSE WHISPERER: Winmar Resources has pocketed $2.18 million as part of a placement of $3 million by PXSteel International Asia Corporation Limited.

The placement is via 15 million ordinary Winmar shares at $0.20 per share, which represents a 100 per cent premium to the company’s share price, as at close of trade on 8 February 2012.

PXSteel is due to pay the remaining $820,000 will be paid by PXSteel on receipt of an independent expert’s report and shareholder approval.

Winmar said it will schedule an Extraordinary General Meeting soon in order to do so.

These requirements need to be met because PXSteel’s shareholding in Winmar is set to exceed 20 per cent on completion of the deal

Winmar indicated it would be using the funds to fast track its exploration program at the Hamersley iron project, in the Pilbara region of Western Australia.

The funds it has received so far cover the company’s 2012 exploration and development commitments under the Joint Venture Agreement in relation to the Hamersley project.

Winmar said the completion of the placement will put it in a position to complete its 51 per cent earn-in to the Hamersley project ahead of schedule.

“The company is delighted to have completed this phase of the placement, and welcomes PXSteel as a key strategic investment partner in Winmar’s plans to develop the Hamersley project,” Winmar Resources said in its ASX announcement.

“Winmar has confirmed a $2.2 million exploration budget for 2012 and has engaged specialist minerals exploration and geological service group Terra Search to manage the exploration program at the Hamersley project.”

“Terra Search has a strong depth of experience in the iron ore sector, having previously worked with Dynasty Metals Australia, Atlas Iron and Polaris Metals, among other companies.”

The placement transaction will result in Ms Tu Juan, a director and vice-president of Jiangxi PXSteel Industrial Co., Ltd joining the Winmar Board as a non-executive director.