Kingsgate Consolidated updates Challenger Mineral Resources and Ore Reserves

THE DRILL SERGEANT: Kingsgate Consolidated (ASX: KCN) has released an update to the gold Mineral Resource inventory and Ore Reserves at the company’s Challenger mine in Western Australia, as at 30 June 2013.

The new statement incorporates implementation of the company’s new mine plan, which is focussing on the higher grade Challenger West ore body as well as mining depletion over the 12 months ending June 2013.

Kingsgate has reported the Challenger Mineral Resources at 5 grams per tonne gold cut-off grade for underground and 1.5g/t gold cut-off grade for open pit.

These are now estimated at 750,000 ounces of gold, compared to the June 2012 estimate of 1,080,000 ounces of gold.

Kingsgate said the reduction reflects a reassessment of the gold endowment at Challenger Deeps largely around and below the 79 Fault/215 Shear.

This is only partially offset by greater delineation of the Challenger West structure that is now defined for over almost two kilometres down plunge.

Challenger underground Ore Reserves are estimated at an average cut-off grade of 6.4g/t gold and now stand at 102,100 ounces of gold at 6.81g/t gold compared to 640,000 ounces gold in 2012.

The company explained this Ore Reserve is effectively the interim mine plan it is implementing as part of the transition to the Challenger West ore body.

Kingsgate is currently carrying out a drill program now at Challenger West in order to better define the ore body, which it hopes will determine a longer term mine plan.

The program will take several months to complete and Kingsgate said it anticipates a revised Ore Reserve statement will be released during the 2013/14 year incorporating results from this drilling.

“The 2013 Challenger Reserve and Resource statement should be regarded as an interim position,” Kingsgate Consolidated managing director and chief executive officer Gavin Thomas said in the company’s announcement to the Australian Securities Exchange.

“The transition to a Challenger West focussed operation is occurring earlier than previously anticipated with implementation of the new mine plan.

“As the current drill program at Challenger West advances, the longer term outlook for Challenger will become better defined.

“We acknowledge that Challenger is currently in a transition phase but remain confident in the gold endowment in the system and the potential to grow reserves over the next 12 months and beyond.”