Focus Minerals Ltd.

Published : April 03rd, 2008

Upgraded Gold Reserves at Perseverance Gold Deposit Boosts Economic Returns as Fir

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Focus Minerals Ltd (ASX: FML)

 

 

ASX / MEDIA RELEASE                                                                                                   3 April 2008

 

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 

 

Focus Minerals Ltd.

PRODUCER
CODE : FML.AX
ISIN : AU000000FML4
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Focus Min. is a gold development stage company based in Australia.

Focus Min. holds various exploration projects in Australia.

Its main assets in production are COOLGARDIE, TINDALS MINING CENTRE and MOUNT GOLD in Australia and its main exploration properties are NEPEAN MINE, MOUNT (REDEMPTION JV), LAKE COWAN and TREASURE ISLAND in Australia.

Focus Min. is listed in Australia and in Germany. Its market capitalisation is AU$ 52.1 millions as of today (US$ 38.9 millions, € 33.5 millions).

Its stock quote reached its highest recent level on March 05, 2004 at AU$ 9.75, and its lowest recent point on March 13, 2020 at AU$ 0.15.

Focus Min. has 182 750 000 shares outstanding.

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3/31/2015Focus Minerals Limited – Financial Report YE 2014
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2/11/2015Focus Minerals Ltd December 2014 Quarterly
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1/31/2013December Quarterly Report
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