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.”