Morning Star Gold to return one of Australia's most prolific gold mines in 1940, to production

Morning Star Gold (ASX: MCO) is readying the old Morning Star Gold mine for mining from two locations. Four stopes are being initially prepared. Retention of mining contractors has commenced.

The Morning Star gold mine is located at Woods Point, 120km ENE of Melbourne.

It was one of Australia's most prolific gold mines yielding 883,000 ounces of gold at an estimated grade of at least 26.5 grams per tonne. Records of gold production between 1862 and the mid 1890s were not reliable and output may have been considerably higher.

At one point in the early 1940s, the Morning Star mine was Australia’s biggest gold mine. Gold Mines of Australia (WMC) operated it for 25 years (1934-1959).

Recent geological modelling has identified significant tonnage & grade to sustain an initial draft mining plan up to 100,000 tonnes per annum.

The Morning Star mine has an in situ gold resource, estimated in 2008 to exceed 900,000ozs. This resource is in the process of being revalidated and re-evaluated.

MCO has been preparing the existing underground workings, shaft and plats at the Morning Star mine for a return to gold mining. The current mining plan will see four stopes entered initially to ensure continuity of material and grade. These stopes are either already developed or partially developed in areas at between 4 Level (4L) and 9 Level (9L) of the mine (120m-280m from surface).

The mining method employed will be slot-rise and strip using airlegs. This will minimise dilution and increase metal extraction. The ore body in the initial stopes is less than 30 degrees and the areas of mining focus are outlined in this report. Mining from the 9L towards the Maxwell Reef zone is also planned as part of the initial mining program as previously detailed.

Diamond drilling by the company from the 9L (~278m depth) last year proved the potential of the Kenny, Maxwell and Whitelaw extension zones. Prior channel and recon sampling done by the company and WMC has proved the potential of the Dickenson’s Reef zone and in 2006-07, MCO proved the grade potential of Burns Reef zone with some high grade assays of that area in the past 2 years. All current areas of focus have substantial tonnage potential for mining.

The first stage of the initial mining program is expected to commence imminently.

The Burns Reef in this section of the mine is a narrow but rich, laminated quartz reef ~100mm-200mm width. Samples taken by WMC and MCO in the past have indicated high grades with many being above 100g/t.

Preliminary feasibility and costing work has been finalised on a stand-alone treatment plant for the Morning Star mine.

As previously indicated the company’s strong focus is to remove the cost and risks associated with toll milling and build its own gravity gold plant on site. An on-site milling operation would also serve Morning Star’s regional dykes and mines, which are being explored currently. The company has moved to the tender stage with various parties on a range of gravity plant options.

Nick Garling MCO’s Managing Director said the Morning Star mine is being prepared for mining, initially in four zones between 120m and 250m from surface - the first gold production from this mine since 1962/3. "Our milling process options are moving forward. The company is hopeful that financing and costs will become clearer by Q4.”