Focus Minerals Ltd (ASX: FML)
UPGRADED
GOLD RESERVES AT PERSEVERANCE GOLD DEPOSIT BOOSTS ECONOMIC RETURNS
AS FIRST ORE IS MINED
KEY POINTS
·
Upgraded Probable gold reserve to an estimated
287,000t @ 8.3g/t for 76,000oz
·
Detailed mine planning based on upgraded probable
reserve substantially improves economic benefits over and above initial
Bankable Feasibility Study (BFS)
- Upgraded resource
increases net cash flow estimate by 47% to A$28.4m
- Associated cash
operating cost reduction by approximately 18% to A$473/oz
·
Development of Perseverance mine progressing well
with first gold production on target for April 2008.
·
First ore was mined from the Perseverance Main lode
on 31 March 2008.
|
Australian-based
gold and nickel company Focus Minerals Ltd (ASX: FML) is pleased to
announce an increase in Probable gold reserves at its flagship Perseverance
Gold Project to an estimated 287,000t @ 8.3g/t Au for 76,000 contained
ounces ahead of the planned commencement of gold production next month.
The upgrade at Perseverance
- which is located within the Company’s Coolgardie Gold Project
in Western Australia - in conjunction with detailed mine planning subsequent to
last year’s Bankable Feasibility Study (BFS), has shown that the new
resource base will significantly enhance the Project’s economics ahead of
production next month.
The revised project
net cash flow based on the upgraded reserve now equates to approximately $28.4m
for a Return on Funds Employed (ROFE) of 86%; compared to the BFS base
case scenario of $19.3m and 52% respectively. The initial BFS cash flow
contained the previously estimated reserve of approximately 64,000 recovered
ounces at 6.9g/t. The upgraded probable reserve is estimated at 70,100
recovered ounces using a 90% mining recovery rate at the higher grade of
8.3g/t.
Additionally, cash
operating costs have been reduced from the base case figure of A$577 per ounce
to a revised figure of A$473 per ounce, equating to a significant 18%
reduction from the original costs outlined in December 2007.
As a
result of increased geological knowledge and further technical evaluation, the
mining method has now moved to a long-hole stoping approach utilizing three
separate ramps to access development levels. The mining method as costed within
the bankable feasibility study was a combination of cut-and-fill and shorter
long-hole stoping within each mining panel, based around an internal spiral
incline/decline.
This
has resulted in a more efficient mining extraction method and contributed to
mining cost savings.
The
revised ramp access method along with excellent contract mining progress has
resulted in earlier access to the ore, with the first ore tonnes from
Perseverance being mined on 31 March 2008. Ore is being stockpiled at surface in
readiness for treatment at the Higginsville treatment plant later this month.
The table below
details the comparison between the BFS release, announced 20 December 2007, and
the revised outcomes based on the upgraded reserve at gold prices of both A$900
per ounce and A$1,000 per ounce.
Table 1 –
Revised Project Economics
Assumptions
|
BFS Release 20 Dec 2007
|
Revised Project Outcomes
|
Gold Price ($AUD)
|
900
|
900
|
1000
|
Gold Royalty
|
2.50%
|
2.50%
|
2.50%
|
|
|
|
|
Production
|
|
|
|
Ore Milled (tonnes)
|
315,000
|
287,000
|
287,000
|
Average
Monthly Production Rate (tonnes/month)
|
15,000t
|
15,000t
|
15,000t
|
Operating Life (months)
|
21
|
21
|
21
|
Grade (g/t Au)
|
6.9
|
8.3
|
8.3
|
Metallurgical Recovery %
|
92
|
92
|
92
|
Gold
Recovered (life of mine) ozs
|
64,200
|
70,100
|
70,100
|
|
|
|
|
Financial outcomes
|
|
|
|
Cash
Operating Costs (AUD/oz)
|
533
|
454
|
454
|
Total Cost (AUD/oz)
|
577
|
473
|
473
|
|
|
|
|
Capital Costs (AUD)
|
2,800,000
|
1,340,000
|
1,340,000
|
Net Cash Flow (AUD)
|
19,297,678
|
28,354,000
|
35,188,000
|
|
|
|
|
Return on Funds Employed %
|
52%
|
86%
|
106%
|
Development Months
|
11
|
10
|
10
|
Payback Period (months)
|
14
|
10
|
10
|
The Perseverance
Reserve upgrade also follows last week’s announcement of a 70% increase
in the total Countess Gold Deposit Resource to 452,900t @ 4.0g/t for
approximately 57,700 contained ounces, providing further strong evidence
of the potential for surrounding areas within the Tindals Mining Centre
to host high-grade gold deposits similar to Perseverance.
The Tindals Mining
Centre resource inventory now stands at more than 550,000 ounces with an Indicated
Resource of 348,900 ounces and an Inferred Resource of 208,100 ounces.
A Feasibility Study is currently underway to ascertain the viability of mining
the new Countess Resource and the synergies of potentially mining Countess in
conjunction with Perseverance.
Commenting on the
Reserve upgrade and project economics Focus Minerals’ Managing Director,
Mr Peter Williams said: “We
were very confident that we would be able to expand on the Perseverance reserve
figure and in conjunction with last week’s resource upgrade at Countess,
Focus is making significant steps towards sustainable production, which has always
been our aim.
“Our view is
that there is a wealth of new deposits yet to be discovered on our land
holdings and we will continue to aggressively explore Perseverance and the
surrounding Tindals project area to bring these to fruition,” he added.
ENDS
Released
by:
|
On
behalf of:
|
Nicholas Read/Jason Cunningham
|
Don Taig, Chairman
Peter Williams, Managing
Director
|
Read Corporate
|
Focus Minerals Ltd
|
Telephone:
(+61-8) 9388-1474
|
Telephone:
(+61-8) 9215-7888
|
www.readcorporate.com.au
|
Web: www.focusminerals.com.au
|
COMPETENT
PERSON’S STATEMENT
The information in
this report relating to Resources and Reserves are based on work supervised by
Mr Chuck McCormick who is a Fellow of the Australasian Institute of Mining and
Metallurgy (AusIMM). Mr McCormick has the relevant experience as a
“Competent Person” as defined in the 2004 edition of the
Australasian Code for Reporting of Mineral Resources and Ore Reserves in relation to the
mineralisation reported on. Mr McCormick is Exploration Manager of Focus
Minerals Ltd and consents to the inclusion of the material in the form and
content in which it appears.
The information in this report that relates to Ore Reserves was prepared under the
direction of Brett Ustick, who is a member of The Australian Institute of
Mining and Metallurgy. Brett Ustick is a full-time employee of Redemption
Management Pty Ltd. Brett Ustick has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the
activity for which he is undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Brett Ustick
consents to the inclusion in the report of the matters based on his information
in the form and context in which it appears.
BACKGROUND
INFORMATION – FOCUS MINERALS LTD
Focus Minerals Ltd
(ASX: FML) is an Australian-based exploration and development group
whose focus is to become a significant gold and nickel producer in the
Coolgardie-Kalgoorlie-Widgiemooltha region of Western Australia.
Focus Minerals is
the largest landholder in the Coolgardie Gold Belt located in Western
Australia, 560km east of Perth and 35km west of the ‘Super Pit’ in
Kalgoorlie-Boulder. More than 2.6 million ounces of gold has been produced from
the Coolgardie gold belt alone since 1892. Focus holds the mineral rights to
more than 210sq km of tenements including Measured, Indicated and Inferred
Resources exceeding 1.65 million ounces of gold as well as the 1.2mtpa Three
Mile Hill processing plant.
Focus Minerals is
also fast tracking development of its wholly-owned Nepean Nickel Project
(current estimated resource totalling 591,300t @ 2.2% Ni) located 25km south of
Coolgardie. Focus has a view of recommencing mining operations from the
historic production centre in 2008.
READ CORPORATE
Public Relations
Corporate Communications
T: (+61-8) 9388-1474
| F: (+61-8) 9388-1472 | E: info@readcorporate.com.au | Web: www.readcorporate.com.au