YTC Resources (ASX: YTC) will expand the scope of the Hera Definitive Feasibility Study (DFS) to assess the mining and treatment of high grade copper ores from the Nymagee Copper Mine, following recent exploration success in the early stages of the current drilling program.
This will be done together with additional resources from the Far West Lens of the mine. YTC has approved an immediate increase to the drilling budget, with an expanded programme to commence immediately to follow up initial intercepts beneath the Nymagee Mine that include:
- 8.9m @ 7.2% Cu, 24g/t Ag & 0.16g/t Au from 370.5m; and
- 7.0m @ 8.3% Cu, 46g/t Ag & 0.32g/t Au from 345.4m.
DFS costing and initial mine planning for the Hera deposit are well advanced and YTC believes the expanded DFS scope can be assessed without alteration to the Hera Project permitting timeline.
The company is currently preparing its final Development Application (DA) & Mining Lease Applications with the expectation of all Project approvals by June 2011.
The Hera Project is located 100km south-east of Cobar in NSW and is hosted in Cobar Basin rocks which also host the world-class mineral deposits at CSA, The Peak and Endeavor.
Rimas Kairaitis, CEO and director, said "YTC is excited that recent exploration results from Nymagee and Hera have begun to evolve the Hera Project into a much larger scale mining proposition."
"At the same time the Hera DFS process to date has demonstrated a project with strong operating margins with relatively modest capital requirements. The company looks forward to demonstrating a larger scale Project through the expanded DFS whilst maintaining the project’s timeline to permitting and development."
"The upcoming months will require a particularly aggressive programme of resource definition and expansion and I welcome the support of the YTC Board as we continue to demonstrate the world class potential of the Hera & Nymagee and surrounding tenements."
YTC is progressing the DFS to establish a shallow underground mine producing gold, silver, lead, zinc and copper and considers that exploration upside exists not only in the extension of the existing lenses, but also in the interpretation of Hera to evolve into a major gold-base metal system consistent with the pedigree of Cobar-style deposits.
The recent drilling results at Nymagee have substantially advanced the probability of high grade copper ore feed from Nymagee and can be readily incorporated into an expanded mining and processing scenario to produce significant quantities of copper in concentrate, in addition to gold, silver, lead and zinc.
All of the Resource in Far West Lens is currently classified as Inferred and hence excluded from the current mining case. The most recent result into the Far West Lens returned 10m @ 10.65g/t Au, 38g/t Ag, 6.52% Pb and 12.83% Zn from 594m.
Detailed DFS cost estimates on the current Hera deposit mining inventory, indicate that Hera will generate attractive margins of $90-$98/tonne, with the expanded DFS expected to deliver a considerably larger project scale than the current scope of the DFS.
The Company will spend an additional $4.8 million on an expanded resource definition programme at both Hera & Nymagee to be completed between now and the Hera project approvals which are expected in June 2011.
The expanded DFS work programme will include:
- Metallurgy: Nymagee core samples have already been submitted to Metcon Laboratories for first pass metallurgical test work. The test work will focus on amenability of the Nymagee ore to produce copper-silver concentrate utilising the existing Hera Project flow sheet.
- Process Design: The existing plant design and plan throughput will require re-optimisation to incorporate the expanded production case. The expanded mining case may also result in increased plant process rate.
- Resource Definition Drilling: The first two drill holes have demonstrated strong continuity of high grade copper mineralisation within the Nymagee Lode at good mining widths. A substantial programme of resource definition and expansion drilling will be completed with a view to establishing a maiden Nymagee resource estimate and also to scope the potential capacity of the Nymagee Mine to host a much larger copper system.
- Mining Studies: The Hera DFS has established good control on key mining costs for decline access and bench stoping extraction. A similar mining technique would likely be applied to the Nymagee ore system. The study would also assess the potential to utilise part of the existing main shaft infrastructure for mine ventilation.
The DFS recommends the Hera Deposit to be mined by single decline access and uphole bench stoping at an optimised mining rate of 350,00tonne pa. The deposit will be mined in a top down mining sequence with selective use of Cemented Rock Fill (CRF) to increase mining recovery in high grade zones.
Ore will be trucked to surface and processed through a 50tph capacity on-site process plant to produce gold-silver doré and a mixed Pb-Zn-Cu concentrate for sale.
The company expects to further refine outputs through the expanded DFS scope and the incorporation of Nymagee and the Far West Lens as well a substantial increase in the final mining inventory.
The expansion of the DFS is not anticipated to change the permitting and development timeline for the Hera Project.
YTC Resources purchased an 80% interest in the Nymagee Mine JV from CBH Resources (ASX: CBH) as part of the Hera Project purchase transaction in September 2009.
YTC is the manager and operator of the JV and is currently sole funding it. If YTC continues to sole fund, it will earn an additional 1% interest for every $75,000 of further JV expenditure, to increase its JV interest to a maximum of 90%.