Quarterly Report
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SARACEN MINERAL HOLDINGS LIMITED
ACN: 009 215 347
Ramp-up of Deep South underpins Carosue Dam production outlook
Carosue Dam set to meet FY16 and FY17 outlook of ~150-160,000ozpa as part of total group production of ~300,000ozpa at AISC of
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Corporate Details:
11th May 2016
ASX code: SAR
Corporate Structure:
Ordinary shares on issue: 800.8m
Unvested employee performance rights: 20.2m
Market Capitalisation: A$921m (share price A$1.15)
Cash & Bullion (31 March): A$34.3m Debt: Nil
Directors:
Mr Geoff Clifford
Non-Executive Chairman
Mr Raleigh Finlayson Managing Director
Mr Mark Connelly Non-Executive
Mr Martin Reed Non-Executive
Ms Samantha Tough Non-Executive
Substantial Shareholders:
Van Eck 8.6%
Wroxby 8.2%
Paradice Investment Management 6.6% Karara Capital 6.1%
Registered Office:
Level 4
89 St Georges Terrace Perth WA 6000
Telephone: +61 8 6229 9100
Facsimile: +61 8 6229 9199
For further details contact:
Troy Irvin Telephone +61 8 6229 9100
[email protected]
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Key Points
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Stoping now underway at the Deep South underground mine at Carosue Dam, with production on track to ramp-up to ~60kozpa from FY17
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The addition of Deep South improves Carosue Dam's operating profile, resulting in a lower risk mine plan
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Positive results returned from recent grade control drilling at Deep South with further grade control drilling planned next quarter. Results include:
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Deep South remains open along strike and at depth with extensional drilling planned in FY17 (including follow-up work on a previous intersection of 18m @ 7.4g/t, 40m below the base of the current Reserve)
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Deep South has now become the base-load feed for Carosue Dam's Northern Region, with relatively modest contributions of ~15koz in each of FY17 and FY18 expected from Red October (in line with the Carosue Dam five-year outlook)
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Ramp-up of Deep South enables Saracen to focus on exploration at the high-grade Red October mine, where exploration opportunities include vertical and lateral extensions and repetitions of the deposit
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Drilling is currently underway at Red October, with recent results reinforcing the deposit's high-grade credentials:
4.5m @ 14.7g/t
12.4m @ 7.2g/t
15.5m @ 5.9g/t
0.4m @ 141g/t
2.0m @ 91g/t
Saracen Mineral Holdings (ASX: SAR) is pleased to advise that the Carosue Dam project in WA is well on track to meet its production and cost outlook with stoping now underway at the Deep South underground mine.
The Deep South ramp-up improves Carosue Dam's operating profile, resulting in a lower risk mine plan. It also facilitates a reinvigorated exploration effort at the high grade Red October mine where drilling is underway targeting potential extensions and repetitions.
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Carosue Dam Production Update
Saracen is pleased to advise that its Carosue Dam project in WA is well on track to meet production and cost outlook (refer to ASX announcement dated 27th October 2015 - "Robust Five-Year Outlook - Revised") with stoping now underway at the 100 per cent-owned Deep South underground mine.
Figure 1 - Carosue Dam on track to meet five-year outlook
200,000
Production (oz)
150,000
100,000
50,000
0
FY16 FY17 FY18 FY19 FY20
$1,200
$900
AISC (A$/oz)
$600
$300
$0
CD - Southern UG CD - Northern UG CD - Open Pits CD - Stockpile AISC (CDO only)
The Carosue Dam five-year outlook includes "CD - Northern UG" contributions of ~75koz in FY17 and FY18 (Figure 1). Deep South's contribution comprises ~60kozpa from FY17, leaving a modest ~15koz in each of FY17 and FY18 from Red October (as per the Carosue Dam five-year outlook).
The upside case for Red October includes exploration opportunities with drilling underway to test for extensions (vertical and lateral) and repetitions. Key targets include:
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Lower Marlin Lode
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Northern Anchor Lodes
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Lionfish Lode
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Red October repeats
The above targets are detailed in the Red October Drilling Update on page 5.
Deep South Drilling Update
As activities rapidly progress at Deep South, grade control continues to de-risk the short term mine plan.
During April 2016, the opportunity was taken to drill some short, close spaced, grade control holes from the 2275 Butler Ore Drive South. These holes were drilled above and below the 2275 Scarlett Ore Drive South.
Results closely resemble the historical data and confirmed the continuity of the mineralisation. Intersections included:-
4.5m @ 14.7g/t
12.4m @ 7.2g/t
15.5m @ 5.9g/t
Figure 2 - Deep South Long Section illustrating Grade Control results
Routine face sampling of the lodes during development has also highlighted the continuous nature of the mineralisation (Figure 3).
Figure 3 - Deep South Plan view of the 2275 Level with sampled faces
Further grade control drilling is planned in the September quarter 2016.
Resource extension and infill drilling is also planned in FY17 following the development of two hangingwall drill positions.
The deepest drilling at Deep South is only ~400m below surface (Figure 2) and remains open at depth (highlighted by high grade results including 18m @ 7.4g/t) and also along strike.
On a regional scale, the mineralised structure remains open over several kilometres along strike. Surface exploration programs will be undertaken in the future to test for high grade mineralisation proximal to the Deep South mine infrastructure. Mexico, located less than 400m to the south of the mine and which has a high grade intercept of 5.7m @ 12.2g/t less than 300m below surface, is one of several enticing prospects in the region.