logo-loader

Intermin Resources Ltd updates gold resource to build production pipeline

Published: 13:40 16 Aug 2016 AEST

au_wa_map_near_fraser_range__358_57b2a3e8e5c2a

Intermin Resources Ltd (ASX:IRC) has updated the Mineral Resource for the 100% owned Goongarrie gold project located 80 kilometres north of Kalgoorlie-Boulder in Western Australia.

The new estimate stands at 272,000 tonnes at 2.86 g/t gold for 25,028 ounces of gold.

The updated resource is based on extensions to the existing open pit mined in the late 1990s.

The resource will form a key part of Intermin’s production pipeline beyond the Teal Stage 1 open pit gold mine which is nearing development.

Mine optimisation work has commenced to generate a maiden mining inventory and initial mine design to support the completion of statutory approvals to mine.


Background

Intermin has a number of quality gold assets in the world class gold mining region surrounding Kalgoorlie in Western Australia.

The company’s flagship projects are the 100% owned Menzies and Teal projects which host significant mineralisation and have the potential to be mined via open cut and underground methods.

The Teal Stage 1 open pit gold mine within the Teal project represents a near term opportunity for gold production.


Teal Stage 1


The recently completed feasibility study indicates Teal Stage 1 to be a technically strong and financially viable small open pit gold project capable of producing 17,723 ounces of gold over 9 months.

The project is forecast to generate $10.1 million of free cash flow and would have a low $4.5 million capital development cost.

Intermin recently executing a binding letter agreement for ore treatment with Paddington Gold Pty Ltd, a wholly-owned subsidiary of Norton Gold Fields Ltd.

The deal enables an accelerated mining schedule at a reduced capital cost for Teal Stage 1, which is located 12 kilometres from Kalgoorlie-Boulder in the goldfields of Western Australia.

The ore will be delivered by Norton’s haulage contractor at cost using their existing private haul road 2 kilometres to Teal’s east.

This avoids the building of a rail crossing and highway intersection that would be required to deliver ore to the other mills.

Capex savings will be circa $750,000, and with lower haulage costs, this improves the overall project economics.


Production pipeline potential

Intermin has identified a number of shallow oxide and primary mineralisation targets to build a production pipeline past Teal Stage 1.

Scoping study and feasibility work has commenced on a number of projects with the aim of continuous mining and cash flow.

This pipeline includes:


- Teal Stage 2 / Peyes Farm: Extension drilling commenced and historic resource at Peyes Farm being followed up;
- Goongarrie: Resource update and mine optimisation underway; and
- Pericles deposit (Menzies Gold Project): Current resource of 0.53 million tonnes at 2.49 g/t for 42,500 ounces of gold with open cut oxide followed by underground mining.


Analysis

Updating Goongarrie increases Intermin’s total JORC gold resources to 3.53 million tonnes at 2.36 g/t gold for 268,085 ounces of gold providing a potential long term production pipeline for Intermin.

The updated resource at Goongarrie is based on extensions to the existing open pit mined in the late 1990s.

Very little exploration has been completed since then and further drilling is planned on both strike extensions around existing workings and greenfields target on structures identified on the lake system.
 
This latest resource will now be re-optimised with the latest mining and milling costs and A$1,600 per ounce gold price as part of the open pit reserve study.

Goongarrie is a key part of the medium to longer term production pipeline strategy beyond Teal Stage 1 that is currently nearing development.

The stock is trading up 150% year to date ahead of a decision to mine Teal Stage 1 this quarter.

Intermin holds $2.7 million in cash, $3 million in liquid investments and no debt.

Directors and associates hold over 45% of the issued share capital.

An accelerated exploration drilling campaign is underway with high priority walk up targets identified for resource growth.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

Horizon Minerals plans merger with Greenstone to create new emerging gold...

Horizon Minerals Ltd (ASX:HRZ) (Horizon Minerals Ltd (ASX:HRZ)) CEO Grant Haywood sits down with Jonathan Jackson in the Proactive Australia studio to discuss a proposed merger with Greenstone Resources. The merger is designed to create a new emerging gold producer in the WA Goldfields,...

on 13/2/24