Quarterly Report
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SARACEN MINERAL HOLDINGS LIMITED
ACN: 009 215 347
Carosue Dam set for long life as Karari Resource grows 38% to 873,000oz
Further increases expected on back of imminent new drilling platforms
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Corporate Details:
13th April 2016
ASX code: SAR
Corporate Structure:
Ordinary shares on issue: 792.8m
Unvested employee performance rights: 20.2m
Market Capitalisation: A$896m (share price A$1.13)
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:
Wroxby 8.2%
Paradice Investment Management 7.9% Karara Capital 6.2%
Van Eck 6.1%
Group Resources and Reserves:
Resources 7.6Moz (30 June 2015)
Reserves 1.5Moz (30 June 2015)
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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Resources at Carosue Dam's Karari deposit increase by 240,000oz to
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Reserves increase by 114,447oz to 212,447oz @ 3.0g/t
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The new Resource and Reserve estimates represent 38% and 117% increases respectively, relative to 30 June 2015 (after mining depletion of 30,708oz)
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The increases come on the back of strong drilling results, including:
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83% of the five-year production outlook now in Reserves, up from 75%
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Karari extended approximately 100m down dip with an intersection of 12.0m @ 5.1g/t from 557m, highlighting strong potential for further Resource/Reserve growth
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New drill platforms about to be developed; these are aimed at further extending mine life well beyond the current Carosue Dam five-year plan (FY16-20)
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$2.9m of planned capital development (drill platforms) will facilitate an additional $4.5m of extensional drilling in FY17
873,000oz @ 2.8g/t
12.0m @ 5.1g/t
10.7m @ 4.8g/t
10.0m @ 7.2g/t
8.0m @ 7.4g/t
20.0m @ 5.4g/t
Saracen Mineral Holdings (ASX: SAR) is pleased to advise that its strategy to grow the mine life at its Carosue Dam project in WA is delivering outstanding results, with a substantial increase in Resources and Reserves at the Karari underground mine.
Karari's Resources have increased by 38 per cent to 873,000oz and Reserves have grown by 117 per cent to 212,447oz. Both numbers are after mining depletion since 1 July 2015.
The increases mean that Carosue Dam's forecast production for the five years to June 30, 2020 is now 85 per cent covered by Reserves. In addition, Karari now has Indicated Resources of 630,000oz, highlighting the potential for further significant increases in mine life.
The latest drilling has also extended the known mineralisation at Karari a further 100m down dip.
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Karari Drilling Update
The $1.8m drill program approved in November 2015 has now been completed.
The program was predominately aimed at in-filling the Inferred areas of the Mineral Resource with a small proportion testing extensional opportunities. The program has been highly successful with large areas of the Inferred Resources converted into Indicated Resources and Ore Reserves.
The Dhoni Lode continues to impress with solid widths and grades (Figure 1) including:
10m @ 7.2g/t
8m @ 7.4g/t
The lode has also been extended at depth by another 100m. Extensional exploration hole KREX005 returned 25m @ 2.9g/t including 12m @ 5.1g/t down dip from the previously reported 23m @ 7.5g/t.
Figure 1 - Drilling results at Karari (Long Section)
Karari Mineral Resource Upgrade
The drilling at Karari over the past three months has enabled a Mineral Resource update which includes all results to date.
The Mineral Resource has grown at depth to 9.8Mt @ 2.8g/t for 873,000 ounces (30 June 2015: 7.2Mt @ 2.7g/t for 633,000 ounces). This represents an increase of 38% (+240koz).
Table 1 - Karari Mineral Resource as at April 2016
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Karari
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Measured
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Indicated
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Inferred
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Total
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tonnes
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g/t
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oz
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tonnes
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g/t
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oz
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tonnes
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g/t
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oz
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tonnes
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g/t
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oz
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Karari O/P
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-
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-
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-
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136,000
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1.2
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5,000
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191,000
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1.5
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9,000
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327,000
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1.3
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14,000
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Karari U/G
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-
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-
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-
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7,404,000
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2.6
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625,000
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2,105,000
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3.5
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234,000
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9,509,000
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2.8
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859,000
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Karari -Total
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-
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-
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-
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7,540,000
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2.6
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630,000
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2,296,000
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3.3
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243,000
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9,836,000
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2.8
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873,000
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Importantly, the drill program has converted a significant proportion from Inferred Resource to Indicated Resources resulting in an Indicated Resource of 7.5Mt @ 2.6g/t for 630,000 ounces (30 June 2015: 4.4Mt @ 2.4g/t for 336,000 ounces). This is an increase of 87% (+294koz).
Since the commencement of the Karari underground mine in November 2014 (portal cut 16 months ago), the total Mineral Resource has grown by 180%, with the Indicated resource increasing by 350% (+490koz).
Figure 2 - Mineral Resource growth timeline at Karari
1,000,000
900,000
UG Drilling Phase 3 set to commence
800,000
700,000
Ounces
600,000
500,000
400,000
300,000
200,000
100,000
0
171koz
140koz
Portal Cut
UG drilling commences
295koz
338koz
UG Drilling Phase 2
243koz
630koz
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
Inferred Measured + Indicated
Karari Ore Reserve Upgrade
The drilling has also enabled an increase in Ore Reserves.
The Ore Reserve has grown to 2.2Mt @ 3.0g/t for 212,447 ounces (30 June 2015: 1.0Mt @ 3.0g/t for 98,000 ounces). This represents an increase of 117% (+114koz) after mining depletion of 340kt @ 2.8g/t for 30,708 ounces.
Table 2 - Karari Ore Reserve as at April 2016
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Deposit
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Mine Type
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Proved Reserves
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Probable Reserves
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Total Ore Reserves
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tonnes
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g/t
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oz
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tonnes
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g/t
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oz
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tonnes
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g/t
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oz
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Karari
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UG
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-
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-
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-
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2,213,014
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3.0
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212,447
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2,213,014
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3.0
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212,447
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83% of the five-year production outlook is now in Reserves, up from 75%.
Karari Drill Plan FY2017
To improve visibility beyond FY20, two additional drill drives will be committed to further extend and define the Karari Resource.
FY17 will see the execution of an extensive drill program ($4.5m) from the new platforms (Figure 3 and 4), the first of which will become available in the September Quarter 2016.
The investment in this capital development ($2.9m) will allow the resource to be tested some 300m down dip below the base of the current Inferred Resource.
Figure 3 - Plan view of planned drill drive positions