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Exterra Resources receives environmental green light at Second Fortune gold mine

Exterra's shares have more than doubled over the past 12 months.
Exterra Resources receives environmental green light at Second Fortune gold mine
Exterra is in the process of becoming a gold producer

Exterra Resources (ASX:EXC) has had its amended works approval accepted by the Department of Environmental Regulation for processing and dewatering at the Second Fortune gold mine in Western Australia.

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

The sorting plant and associated infrastructure has been recently relocated to site for final assembly.

John Davis, executive chairman, commented: “It is pleasing that we will be able to de-risk our surface works in parallel with the ongoing mine development program.

“Integration of ore sorting into the Second Fortune mining project allows for the generation of cash flows from surface assets such as mullock while providing robustness to the proposed underground operation.”


Site development updates

Recent site updates at Second Fortune include:

- Delivery to site and assembly of the ore sorting unit and associated infrastructure, including conveyors, generator and compressor;
- Delivery to site of the mobile screening plant;
- Delivery to site of mine offices;
- Cell II of the evaporation pond nearing completion and a significant drop in the pit water level on the back of water extracted for the pond construction;
- Clearing of the Second Fortune haul road; and
- Ongoing discussions with mining contractors for the development and operation of the underground works.

The site is now equipped for the ramp up phase of the project.

Operator training on the screening plant has been completed and the crusher plant training is expected to take place in the next two weeks.

Water requirements for the ongoing construction of the evaporation ponds has significantly reduced the water level in the Second Fortune pit.

On completion of cell II and approval of the requisite licence to dewater, final dewatering of the pit and remnant underground workings can take place.


Self-funding nearby exploration

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

Exterra Resources retains a prospective land package in the Second Fortune area with numerous advanced exploration targets and projects at both Zelica and Malcolm.

Exterra also retains the Grass Flat Project north of the Diemals Mining Centre.

In addition to the work programs for the development of the Second Fortune Mine, the company is undertaking an extensive review of the above projects and the outcomes will be released as they become available.


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.

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