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Swan Gold Mining to re-commence drilling at Carnegie gold project

Published: 11:04 24 Aug 2010 AEST

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Swan Gold Mining (ASX: SWA) intends to recommence mining operations at the Carnegie project, located in the gold mining region to the north of Kalgoorlie, Western Australia.

The Carnegie gold project includes a 1.2mtpa gold processing facility and has a large landholding of 2,700km2 in the region.

The project comprises the Riverina, Mulline, Davyhurst, Siberia, Lady Ida and Kunanalling project areas. The current mine plan is to initially focus on supplying the refurbished 1.2Mtpa Carnegie plant with ore from the Sand King and Missouri open pits.

The company is to commence a resource definition drilling programme to provide future plant feed from other deposits in the Siberia tenements as well as the Riverina and Lady Ida tenements immediately.

Marty Adams, director, said this programme is planned to be completed within the next three months at which time it is anticipated that a resource inventory representing some 18 months of processing should be available to commence mining.

The company is also conducting a strategic review to verify the inputs to its mine plan and financial model and is looking at opportunities to lock in lower unit costs for mining and processing through the re-structuring of major contracts.

Swan Gold said the soundest option for processing ore from the high-grade Mt. Ida mine is the addition of a flotation circuit to the Carnegie plant. Engineering work for this circuit will commence shortly.

Access and ore hoisting options for the multi-lode Mt. Ida deposit are also being assessed, with a view to securing longer term benefits for the operation.

The company expects to provide an update on the strategic review and the definitional drilling early in the fourth quarter.

Swan Gold anticipates that details of the updated mining plan, funding arrangements and other necessary requirements for the re-listing of the company will be submitted to the ASX in the fourth quarter.

Carnegie has resources of 1.5moz at 2.3g/t Au (Measured 21,000oz, Indicated 786,000oz and Inferred 695,000oz) and Probable Reserves 135,874oz at 2.7g/t Au).

The company is being fully supported by Stirling Resources (ASX: SRE) and its major shareholder DCM DECOmetal (DCM), a global commodity marketing group with a turnover of US$1billion per annum.

Swan Gold was established following the recapitalisation of Monarch Gold Mining Company by Stirling Resources, which was completed in early 2010.






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