Kingsrose updates Indonesian gold/silver project
Thursday, July 29 2010 - 01:38 AM WIB
WAY LINGGO PROJECT
The Way Linggo Project Contract of Work, held by Kingsros& 85% owned Indonesian subsidiary, PT Natarang Mining, covers an area of 10,540 hectares. It is located over a zone of structural complexity at the northern end of the Semangka Graben where pull-apart basins, fault splays and dilational jogs occur related to the Trans Sumatra Fault Zone. The Trans Sumatra Fault is a major dextral strike slip fault within the Sunda-Banda Volcanic Arc. All significant gold deposits known on the island of Sumatra are related to this structure.
Project development began in earnest in July 2009, following Kingsrose successfully raising A$20m in equity. Mine development has witnessed gold and silver grades in excess of those estimated by Snowden?s in 2008 as part of its JORC compliant Mineral Resources report. Plant construction has been steady, albeit slower than originally anticipated with a doubling of throughput capacity and various other enhancements partly the reason for the extended construction period.
Steady state production of 45,000 ounces of gold per annum is budgeted at a production cash cost of US$150/oz after taking into account silver by-product credits and smelting and royalty costs.
Processing Plant
Metallurgical engineering studies resulted in a decision by Kingsrose being taken in 2009 to construct a conventional gold processing plant of nominal capacity of 140,000 tonnes per annum or approximately 400 tonnes per day (double the original design capacity).
Despite the onset of the monsoonal season, plant and associated infrastructure progressed to a point whereby the plant construction was close to achieving practical completion at the end of the quarter. Subsequent to the end of the quarter this was achieved and commissioning on ore has commenced and the major milestone of the first gold pour is expected to be achieved in the first week of August 2010.
The process plant will work through an expected staged build up to full capacity over the ensuing quarter as debottlenecking and practical re-jigging of circuit processes commences.
To enable the maximum recovery of the valuable silver co-product a Merrill Crowe zinc precipitation circuit has been installed. The onsite assay laboratory for analysis of mining grade control, mill and drilling samples was commissioned and is in full operation as is the tailings dam and power station.
Way Linggo Mine
Mining during the quarter was focused on sublevel development and the blocking out of stope panels in the A and B orebodies. Significantly, whilst previously considered to be separate epithermal veins, the identification and development of linking structures suggest a dilational jog?type structure exists with A orebody interconnecting with B orebody resulting in a much wider section of ore.
The bulk of the 1020 to 1065 levels has been fully developed to allow mine volume targets from stoping to be achieved with relative ease in the first year of processing whilst focus shifts to development of future ore on the 965mRL (3rd level).
The internal shaft from the hanging wall of the 2 Level (1020mRL) to the 3 level (965mRL) was completed and preparations for sill driving of the ore body at that level is in progress.
At the end quarter approximately 22,900 tonnes of high grade ore grading 19.5 g/t Gold and 224 g/t Silver had been stockpiled at the surface.
Exploration
The program of regional prospecting, geochemical sampling and geological mapping of the near-mine areas of the Way Linggo Mine was accelerated during the quarter. This has resulted in the identification of a number of anomalies worthy of follow-up with two significant new prospect areas located to the north of the minesite.
These two new prospect areas are located approximately 2 km (Talang Kecap Prospect) and 4 km (Mitra Jaya Prospect) along strike of the Way Linggo Mine.
The Talang Kecap prospect is characterised by abundant epithermal quartz vein float in streams returning assay values up to 18.6 g/t Gold, intense clay alteration of host rhyolitic tuffs and in situ narrow banded quartz veins (1- 10 cm) carrying gold grades up to 12.1 g/t Gold.
The Mitra Jaya prospect situated 2 km north of Talang Kecap is also characterised by abundant epithermal quartz vein float distributed in a number of neighboring streams over an area of interest of around 1 km in length. Numerous vein float samples have returned assay values in the range 1 to 4.3 g/t Gold with some higher grade samples up to a maximum of 33.5 g/t Gold and 200 g/t Silver.
Although in situ veins identified to date are narrow, the area is prospective because the veins do carry significant gold grades and are texturally indicative of the upper parts of an epithermal system. Prospect level exploration involving geochemical soil sampling and trenching is in progress to develop drill targets at these locations. It is expected that these targets will be drill tested during the next quarter. (end of edited excerpt)