Exterra earns tick of approval from Scoping Study at Second fortune

THE BOURSE WHISPERER: Exterra Resources (ASX:EXC) has received the results of a Scoping Study and preliminary economic assessment of the company’s 100 per cent-owned Second Fortune gold project at Linden in Western Australia.

The study has confirmed the project’s economics and potential to deliver positive cash flows with estimated pre-tax net cash (after royalties) of $52.3 million.

The study, comprising mining, infrastructure, environmental and financial analysis, considered the recent 151 per cent increase in the Second Fortune resource to 300 vertical metres as a base case scenario and included the Main Lode only.

A model of the Main Lode quartz vein was created for the Scoping Study with an undiluted grade of 18.20 grams per tonne gold.


Aerial photo of Second Fortune mine and infrastructure. Source: Company announcement


“The completion of this Scoping Study confirmed the company’s belief that the project has the potential to be economically viable, with low start-up capital expenditure requirements, low ongoing operating costs, and attractive cashflow,” Exterra Resources said in its ASX announcement.

“The company is looking forward to completing the preliminary works required to commence a mining operation with the confidence that further discoveries within the project portfolio will add further to a very attractive near-term production opportunity.”

In order to prepare for the commencement of an underground operation, Exterra said it has committed to completing the following tasks:

–    Detailed Mine Design and Schedule to the base of the current model;

–    Environmental Baseline Studies including landform and soils, waste characterisation, vegetation flora and fauna, surface and groundwater, cultural heritage and social impacts leading to mining approvals; and

–    Dewatering of the Second Fortune pit. There is a small amount of water in the bottom of the Second Fortune pit and historic underground workings. The company is progressing an application to dewater the pit in preparation for mining.