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Exterra Resources receives final required plant approval

Exterra is in the process of developing the Second Fortune gold mine.
Exterra Resources receives final required plant approval
On-site at Second Fortune gold mine

Exterra Resources (ASX:EXC) has received its licence to operate the sorting plant, which is the final approval required to commence operations 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.

Mullock material will be recovered from the dumps and processed through the sorting circuit as required to viably haul and process it remotely.

This trial phase, which will be used to quantify the value of the dumps as a revenue source before underground mining begins at Second Fortune is expected to take several weeks.

John Davis, executive chairman, commented: “Now that the operating licenses are in place we look forward to ramping up production from the mullock dumps as the preliminary stage to starting the mine at Second Fortune.”


Second Fortune development update

The sorting plant and associated infrastructure have been installed and are undergoing commissioning.

Commissioning is at an advanced stage and early indications of the circuit performance are very positive.

Details of the circuit performance and the potential impact on the integrated mining and mullock project will be discussed in coming weeks.

The focus of the mine planning has shifted to a hybrid owner’s contractor model which is expected to deliver significant benefits to the project.

The mine design and operating philosophy are being finalised based on the benefits sorting delivers with respect to managing dilution, and recovery of marginal grade material.

Details of the updated design and project metrics are to be released in coming weeks.

Toll treatment terms have been agreed and haulage terms are being reviewed and discussions are ongoing with preferred contractors.


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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