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Exterra Resources demonstrate high gold recoveries at Second Fortune

The Second Fortune gold mine is currently being developed.
Exterra Resources demonstrate high gold recoveries at Second Fortune
Exterra is on track to become a gold producer

Exterra Resources (ASX:EXC) has demonstrated gold recoveries averaging 95% in conformational metallurgy work at the Second Fortune mine in Western Australia.

The metallurgical test work confirms historical data and is an important milestone towards securing ore purchase and tolling agreements.

The Second Fortune gold mine is currently being developed, which will see Exterra transition into a gold producer.

Exterra is currently mobilising the sorting plant at the Second Fortune in preparation for its commission in the pre-mining phase, expected to generate saleable gold concentrate.

Mining contract discussions are ongoing and site surface works advancing well.


Metallurgy details

A metallurgical leach program was carried out on both Second Fortune samples and Mullock Dump samples to confirm previous leaching results.

The program was designed to provide variability data with respect to the Second Fortune deposit, including tests on sorted concentrates.

In addition, the program included tests on concentrates derived from bulk sorting tests on the Mullock dumps.

All Second Fortune samples demonstrated very high gold recoveries, in the range of 94-98% and averaging ~95%, at a grind size of ~150 microns.

Gravity recoveries were also high averaging 69%.

Second Fortune tests demonstrated that low cyanide consumptions, ~0.28 kilograms per tonne, can be expected and the ore contains very low levels of deleterious elements.

The Mullock Dump samples demonstrated high gold recoveries, averaging ~96%, at a grind size of ~150 microns. Gravity recoveries were also high averaging 71%.


Background

Exterra’s projects are all located in the Archaean Yilgarn Craton of Western Australia, a world class gold province which includes the Kalgoorlie Golden Mile deposit, which has produced over 50 million ounces of gold.

During November 2016, Exterra commenced the construction phase of its recently approved Second Fortune gold mine.

The Second Fortune underground mine feasibility study highlighted the low cost entry to gold production.

Study details include:

- 131,000 ounces at 8.5 g/t gold JORC Resource at Second Fortune;
- 56,300 ounces at 9.7 g/t gold JORC Reserve at the Main Lode only;
- $97 million revenue to 300vm on Main Lode over 30 months;
- $34 million net cash flow (at A$1700 an ounce gold price); and
- +/-A$5 million pre-production capital.


Analysis

The confirmation of historical metallurgical work with this recent test work is a positive result for Exterra as it provides confidence that operating costs will remain low.

Exterra is on track to become a gold producer within the next few months through the commissioning of Second Fortune.

Importantly, future cash flows from the Second Fortune mine will provide Exterra the capacity to self-fund exploration in the future.

Furthermore, The Linden project hosts a number of advanced prospects within close proximity to the Second Fortune gold mine including Linden Star, Hill East and Golden Orb.

All prospects have the potential capacity to add gold ounces to the mine development and further enhance the project economics.

Shares in Exterra are trading up 120% over the past 12 months, currently priced at $0.051.

With the AUD gold price trading at A$1,635 per ounce, this is a favourable period to be making the transition into gold production.

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