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Stonewall Resources accelerates Rietfontein mine development, production set for 2013

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Stonewall Resources (ASX: SWJ) plans to re-open the Rietfontein underground mine in South Africa two years ahead of schedule following the completion of the Pre-Feasibility Study.

Mining is set to begin at a rate of 5,000 tonnes per month, targeting production of 1,294 ounces in 2013 and increasing to 8,200 ounces by 2014.

This is expected to generate revenue of around A$2.17 million in 2013 and about $13.73 million in 2014.

A capital cost of only $3 million is estimated to ramp up to 8,200 ounces per annum thereby producing a positive capital to gold ratio.

The Rietfontein mine is one of several areas of gold mineralisation held under the approved Rietfontein New Order Mining Right of Stonewall subsidiary Sabie Mines.

This Mining Right includes the farms, Rietfontein, Waterval, Maliveld Valley and Spitskop.

The Pre-Feasibility Study included a detailed mine work program based upon a JORC Resource of 1.2 million tonnes at 7.92 grams per tonne (g/t) for 316,700 contained gold ounces in the Indicated category and 657,000 tonnes at 7.23g/t for 152,500 contained gold ounces in the Inferred category.

In January and February 2013, mine management gained access to the mine and carried out extensive preliminary investigative work into the mining development and infrastructure available.

The Pre-Feasibility Study, which began in late 2012, yielded a mining plan that would fit in with available and existing plant infrastructure in Pilgrim’s Rest.

Meanwhile, Stonewall has begun resource drilling at its TGME and Sabie projects.

At the Sabie Mine complex, Stonewall is targeting an increase in the Inferred Resource of 110,000 ounces to 1.2 million ounces at 2.02 to 6.51g/t at Rietfontein.

The company is set to carry out additional exploration drilling and bulk test work as part of its extended feasibility studies at the Rietfontein mine.

Stonewall is working to increase the categorisation of its Resources, extend the life of the mine and increase the mine plan to target up to 40,000 ounces per annum by the end of 2014.

The company has cash backing of just over half of its market cap. of $17 million with around $10 million in cash at the end of the December quarter 2012.


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