Mutiny Gold (ASX:MYG) is driving twin outcomes from its Gullewa tenement package in the Murchison Region of Western Australia by looking to monetise the Rocksteady iron ore prospect and workshopping new funding options for the Deflector Gold-Copper Project.
At Rocksteady, while a small resource at 1.15 million tonnes at 51.8% iron, has appeal to other mine operators given its location and a commercialisation plan would include either developing a DSO project and early production or a potential sale of the project.
Based on the positive scoping study at Rocksteady and a drilling programme in October/November saw a substantial 75% increase in the iron resource base.
While at Deflector, drilling in 2014 would look to increased gold resources to support an extended life of mine, maintaining and improving the project’s low cost/high grade advantages and potentially increasing the proposed rate of production.
Deflector
Mutiny’s managing director, John Greeve, chaired a workshop of industry experts from disciplines including finance, construction, metallurgy, mining, geology, legal, broking and banking.
The objective was to look at risk minimisation given current capital markets and maintaining a strong and sustainable operating margin based on Deflector’s high grade gold resource of 6.4g/t gold as well as a low "all in" sustaining costs at $801 per ounce of gold.
The strategy included a detailed hedging programme and flexible structured finance modeling. The outcome was the strong support for development and to advance funding options.
Mutiny is now in detailed discussion with a number of large investment funds, including several from overseas. The programme is being supported by a leading bank.
2014 Deflector drill programme
Following on from the successful Sub-Audio Magnetics (SAM) survey over Deflector in 2013, Mutiny has prepared an initial 2014 drilling programme and applications for regulatory approval to drill have been lodged and approved.
Using SAM technology doubled the known footprint in 2013 of the Deflector gold-copper deposit, the 2014 drilling programme will focus on targets in close proximity to the Deflector mine infrastructure.
The Deflector Resource is open in both directions along strike and at depth. The aim of this programme is a culmination in increased JORC resources and extensions to the Deflector Life of Mine (LOM) and/or production rates for both open pit and underground operations.
The programme is being designed to target high-grade extensions of known mineralisation, as well as testing compelling near-mine targets.
Rocksteady Iron Project
Rocksteady is located 10km west of Mutiny Gold’s Deflector Gold-Copper Project, within the company’s Gullewa Tenement Package and is part of the company’s multi-mine strategy.
It offers a low cost start up and early cash-flow opportunity for Mutiny or as a potential capital raising asset.
A project review of the Rocksteady Iron Deposit by Mutiny in conjunction with Continental Resource Management points to significant potential for further resource upside and extensions which contains 170km of prospective Banded Iron Formation.
Analysis
While the funding market has not been kind to gold project developers of late, there are not many "new" gold projects globally that can boast a high grade gold resource of 6.4g/t gold as well as a low "all in" sustaining costs at $801 per ounce of gold.
That Mutiny has flagged the strong support for development and to advance funding options from a number of financial institutions and large investment funds, including several from overseas demonstrates project and ultimately funding appeal.
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