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Tanami Gold underground mining continues at Coyote despite heavy rains

Last updated: 13:34 16 Mar 2011 AEDT, First published: 12:34 16 Mar 2011 AEDT

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Tanami Gold’s (ASX: TAM) Western Tanami operations have been further impacted by heavy rainfall during the northern Australian wet season, with the Bald Hill open pit mining temporarily suspended.

The company’s Coyote underground operations continue to operate at near normal capacity but the seasonal rainfall has impacted on the supply of open pit ore and treatment rates.

Normal flight services and freight deliveries have also been disrupted which could cause temporary production and ore treatment delays due to limited fuel supplies.

The company will return to full operational mode with ore feed from both the high grade Coyote underground mine and the Bald Hill open pits as soon as the rains subside.

Tanami now expects gold production for the March 2011 quarter to be between 6,500 and 8,000 ounces due to the disruptions. The company maintains a strong cash position with $6.8 million cash and gold on hand.

The Coyote Stage 1 plant upgrade is performing well "with commissioning demonstrating that increased recoveries of up to 98% are being achieved at the designed higher throughput rates," the company said.

Drill programs at both the Western and Central Tanami sites remain on track and are following up recent positive results as well as testing deeper targets at Coyote.

Tanami is set to boost gold production at the Tanami project after a A$3.4 million upgrade to the Coyote treatment plant, as the company continues to hit further high grade gold intersections.

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