Reed Resources (ASX: RDR) is progressing towards resumption of mining ahead of schedule at its recently acquired 2.5 million ounce Meekatharra Gold Project in Western Australia, after a boost in resources and reserves.
The project has a 3 million tonne per annum (Mtpa) processing plant and associated infrastructure, and the company is in the process of conducting Resource re-optimisation and a Feasibility study to recommence gold production in 2012.
The company's evaluation of the project continues to yield positive results with significant Resource increases at three deposits and pit optimisation completed at three deposits.
After only four months of reviewing the assets through diligent validation, reworking and remodelling of the existing known orebodies the company has boosted both Resources and Reserves at the Meekatharra mining centre.
The Prohibition Resource increased by 2.8 million tonnes (MT) for an additional 158,000 ounces (oz).
This represents the second milestone (after the Resource increase at the Bluebird deposit) to potentially create another base-load feed for when operations recommence at the project.
At the Surprise and Jess deposits additional new Resources of 40,000oz were identified.
The Reedys area's first open pit Reserve since 1997 of 36,600oz has been completed on the Jack Ryan, Rand and Callisto Pits at a gold price of A$1300/oz.
Pit optimisations at the Mickey Doolan and Prohibition deposits have commenced.
Once the optimisation of the Prohibition deposit is complete the company will be undertaking intense evaluation work at the Mickey Doolan deposit, which hosts over 600,000oz in Resources.
Resource-Reserve and exploration drilling is planned to commence in July.
Christopher Reed, managing director, said “the Resource and Reserve review is progressing exceptionally well with the geological team now in place and an underground planning engineer due to start in a month.
"A key aspect in de-risking this project is being able to incorporate multiple sources from multiple locations, which is something we have primarily focussed on."
The company said the Resource to Reserve conversion and production pyramid is progressing ahead of schedule, with only a few Resource estimates and optimisations remaining to be completed, including the new Prohibition Reserve estimate by Minecomp.
Work at Reedys (external to the 5 main pits) has so far been a high level assessment. A review of the remaining tenement holding in this area has commenced with a view to looking at the current data and testing anomalies that exist.
Expansion and re-optimising the other satellite pits will commence, along with a detailed review of the Resource underneath the South Emu Pit targeted for underground operations.
The company said the Bankable Feasibility Study is progressing well. An electrical engineering study of the processing plant and power facility has been completed, along with a condition report of the accommodation village and office.
A risk assessment of the project has been completed with the engineering company SCOPE Australia, and negotiations with interested parties for several key contracts have commenced.
These contracts include the load and haul open pit contract, the mill refurbishment contract and the catering contract. A preliminary scoping study of the power supply and generation options has also been completed.
Geotechnical, environmental, hydrological and metallurgical work is advanced and key reports have either been finalised or are being finalised to allow the mine planning process to commence with confidence.