Kingsrose's Way Linggo updates

By Demas Simbolon

Australia listed Kingsrose Mining Ltd has successfully initiated various stages of exploration in its flagship Way Linggo mine in Lampung, South Sumatra, producing 20,309 tons of ore at a grade of 13.2 g/t gold and 164 g/t silver during the quarter.

The Way Linggo mine, which 85 percent shares is purchased by Kingsrose in January 2009 with exploitation undertaken by the 85 percent company subsidiary PT Natarang Mining, now has its level of production stands at 143,819 tons at a grade of 14.6 g/t gold and 183 g/t silver.

Approximately 73 percent of the ore was sourced from short-hole stoping with the remainder sourced from sub-level development.

The company has decided to switch to cut and fill operations in the wider zones of the high-grade and semi-oxidised Way Linggo orebody, resulting in delays in some stoping activities from higher grade areas. This resulted in lower than expected mine production impacting quarterly production.

The rail underlay drive below the 3 level continued with development in ore. This new 4 level should enable production from deeper parts of the mine.

During the quarter a new shaft sink (the "Old Camp Shaft") commenced to access the southern portion of the Way Lingo Indicated Resource on the southern side of the dividing Semung River. At the end of the quarter the shaft had reached a depth of 22.8m and an aerial apparatus to transport ore back across the river was established.

Since the discovery of Talang Santo in June 2011 and the estimation of the maiden inferred resource estimate calculation in December 2011, Kingsrose has continued to rapidly advance the Project toward production.

As previously announced, Kingsrose has established an adit into the upper parts of the outcropping vein system and has commenced an underlay shaft to enable trial mining. Development from the adit during the quarter consisted of 104m of horizontal development and 13m of vertical development on the first winze. The underlay shaft was advanced a further 56m for a total depth of 67m at the end of the Quarter.

Kingsrose continues to anticipate that by adopting this aggressive development approach it will access trial parcels of ore towards the end of the June Quarter. Issues associated with the wash-out of gold bearing clays after argillic alteration and the erratic nature of the epithermal quartz vein development and grade distribution can be assessed and dealt with prior to full-scale mine development and subsequent ore processing.

Processing
Plant throughput for the quarter was 20,380 tons at a head grade of 12.5 g/t gold and 164 g/t silver. Mill throughput matched mine production and

was 32 percent lower than the previous quarter due to the depletion of the pre-commissioning ore stocks in December.

The plant mechanical availability remained high at 99.2 percent with the SAG mill continuing to provide an excellent fix for materials handling issues that hindered the original process flowsheet.

Metallurgical recovery improved to 93.0 percent for gold and 83.3 percent for silver. The higher recoveries were achieved through finer grinding, longer leach retention times and improved CCD wash efficiencies at the lower mill throughput rates.

Gold production and silver production was 7,618 oz of gold and 86,159 oz of silver for 9,063oz of gold equivalence. This was less than the previous quarter due to the running out of stockpiles and a slower than anticipated increase in production from the underground mine.

Plant trials have shown a steady decrease in metal recoveries when mill throughput increases above 300 tpd due to lower leach and CCD efficiencies. Kingsrose commenced installing a PSA oxygen plant to increase leach kinetics and a 6t1, CCD to improve CCD wash efficiency during the quarter. These two projects are expected to be completed in the June quarter and will enable continuation of high metal recoveries at higher throughput rates (up to 400 tonnes per day).

Gold sales for the quarter totalled US$10.9 million from the sale of 6,430 gold ounces at an average price of US$1,694/oz. Silver sales for the quarter (silver sold is treated as a by-product credit) totalled US$2.7 million from the sale of 92,515 ounces at an average price of US$29/oz. This included the delivery of 60,015 ounces of pre-sold silver at a fixed price of US$26.86/oz.

Cash operating costs per ounce produced were slightly higher due mainly to lower gold and silver production.

Exploration Highlights
During the quarter, resource definition and resource extension drilling continued at the Talang Santo gold prospect. Reconnaissance drilling activities progressed at Semung Kecil, Linggo-Sapta and the Rowo Rejo Prospects. Other on-ground geological sampling, mapping and creek traversing activities were completed at numerous other prospects.

At Talang Santo, resource definition drilling continued on easterly and westerly extensions to the Mawi Vein. Best results received shallower vein positions were 1.40 m @ 6.77 g/t Au and 5.56 g/t Ag at level 1120 mRL (West Mawi vein) and 3.2m@ 7.07 g/t Au, 18.1 g/t Ag (East Mawi vein) at level 1145mRL. Deeper drilling to the east on the Mawi vein continued to deliver good results from down-plunge positions outside of the defined resource estimate. The best result was 5.35m @ 5.33 g/t Au, 31.1 g/t Ag (include 0.35 @ 46.5 g/t Au, 273 g/t Ag) at level 95OmRL.

At Petal Kayu, one rig continued at the Petal Kayu North gold prospect, which continued to return positive intercepts from well developed low-sulphidation epithermal veins. A best result was DDH-266 which returned Sm @ 2.73 g/t Au, 7.16 g/t Ag at level 98OmRL.

At Semung Kecil Prospect, drilling commenced to test the known structures with 2 holes completed and a best result of 4.0 m@ 2.62 g/t Au, 18.32 g/t Ag (including lm@ 5.26 g/t Au, 17.61 g/t Ag) from 348.7m in DDH 303.

At Linggo - Sapta Prospect, eight holes were completed with highly encouraging results. The best result was 4.4m @ 2.31 g/t Au , 7.44 g/t Ag (including lm@ 5.13 g/t Au, 23.7 g/t Ag) from 187.7m in hole DDH-282.

At another prospect, the Rowo Rejo, drill testing around the edges of the large CSAMT anomaly continued with DDH-300 returning 4.Om @1.52 g/t Au and 26.8 g/t Ag (including 1 m @ 3.80 g/t Au and 51.43 g/t Ag from 97.1 m) from 94.30m in a broken quartz-chalcedony vein.

Editing by Audy Zandri