Southern Gold approves Cannon gold mine go-ahead

THE BOURSE WHISPERER: Southern Gold (ASX: SAU) announced formal approval of Stage 1 Open Pit mine schedule and budget for operations at the company’s Cannon gold mine, located east of Kalgoorlie in Western Australia.

“With all key regulatory approvals in place (and pastoral lease access agreement imminent), mine schedule and budget agreed, and with the formal approval of the joint Southern Gold and Metals X Operations Committee, the Cannon gold Resource will now proceed to mining,” Southern Gold said in its ASX announcement.

The Cannon project is currently under co-development with Metals X (ASX: MLX), which has been engaged to finance and operate the project under a Mine Finance and Profit Share Agreement struck between the two companies in November last year.

Metals X has been engaged to finance and operate the project under the Mine Finance and Profit Share Agreement.

Ore from Cannon is to be processed approximately 35km from the mine at Metals X’s South Kalgoorlie operations Jubilee mill on a batched, unblended basis.

Southern Gold has completed a detailed tender process and definitive costings, which has returned results of projected All-In Sustaining Costs (AISC) of $1084 per ounce of gold (US$841 per ounce).

The Stage 1 Open Pit is anticipated to mine 152,000 tonnes of ore at a fully diluted run of mine grade of 3.1 grams per tonne gold containing 15,000 ounces of gold, with 13,500 ounces of gold recovered with a C1 operating cost of $1053 per ounce of gold (US$817 per ounce).

The company recently updated the Cannon gold resource, in accordance with the JORC code to: 753,207 tonnes at 3.75g/t gold for 90,927 ounces of gold (Measured and Indicated).