Gascoyne Resources Updates Dalgaranga Mine Plan

Thursday, November 16, 2017
THE BOURSE WHISPERER: Gascoyne Resources (ASX: GCY) released an updated Mine Plan for the company’s 100 per cent-owned Dalgaranga gold project in Western Australia.

Gascoyne Resources said the Dalgaranga Mine Plan update now incorporates three deposits, Gilbeys (including Gilbeys South), Golden Wings and the more recently discovered Sly Fox deposit.

The Dalgaranga Mine Plan now incorporates 652,000 ounces of contained gold (16.2 million tonnes at 1.3 grams per tonne gold), following recent exploration carried out close to the mill.

Gascoyne Resources explained it had fast tracked development activities for the upper portions of the Sly Fox discovery to maximise plant throughput, following recognition that the 2.5 million tonnes per annum plant that is under construction has capacity to treat up to three million tonnes per annum of oxide ore.

The new mine plan includes an increase of approximately one million tonnes over the previous mine plan, which the company said allows it to utilise the excess plant capacity for the first two years of production, defer waste movement, and extend gold production beyond six years.

The updated Mining Inventory comprises:

Total Ore Reserve of 15.3 million tonnes at 1.3g/t gold for 612,000 ounces of gold (94%) – previously 582,000 ounces; and

A minor component of Inferred Mineral Resources within the pit designs of 0.9 million tonnes at 1.4g/t gold for 40,000 ounces of gold (6%).

The Gilbeys Ore Reserve has been updated to account for the updated Mine Design and now stands at 523,000 ounces (13.2 million tonnes at 1.2g/t gold) and is made up of a proved Ore Reserve of 2.8 million tonnes at 1.4g/t gold and a probable Ore Reserve of 10.4 million tonnes at 1.2g/t gold.

The Golden Wings Ore Reserve has also been updated as part of the updated Mine Design and Mineral Resource.

The Golden Wings Probable Ore Reserve now stands at 63,000 ounces (1.4 million tonnes at 1.4g/t gold).

The Sly Fox maiden Probable Ore Reserve has been estimated and stands at 26,000 ounces (0.6 million tonnes at 1.3g/t gold) and the deposit remains open in all directions.

Gascoyne Resources indicated the construction of the Dalgaranga gold project is currently on schedule and on budget, with first gold production scheduled to be in the second quarter of 2018.

“The inclusion of Sly Fox into Years 1 & 2, as well as implementation of a staged mining approach at Gilbeys has allowed utilisation of the processing plant above its nameplate capacity due to the increase in oxide ore,” Gascoyne Resources said in its ASX announcement.

“This results in gold production of up to 120,000 ounces per annum for the first two years, while also deferring around 10 million tonnes to 12 million tonnes of waste movement from these years of the operation.

“These changes further improve the early cashflow from the project.

“Deferring this waste movement delays approximately $20 million dollars of costs out of the first two years of the operation, with annual production effectively unchanged and enhancing the ability for early debt repayment.”