Kingsrose updates Indonesian gold/silver project
Wednesday, January 25 2012 - 04:08 AM WIB
WAY LINGGO PROJECT (85% KRM)
OPERATIONS SUMMARY
Way Linggo Mine
The mine produced 17,150 tonnes of ore at a grade of 16.2 g/t gold and 219 g/t silver during the Quarter.
The mined production for the Project to date now stands at 123,511 tonnes at a grade of 14.8 g/t gold and 185 g/t silver.
Mined ore continued to be sourced from a combination of sub-level development (30% of production) and short-hole stoping, Productivity was lower during the Quarter as areas of the orebody were set-up for post-fill stoping methods. In addition, stoping in some upper areas necessitated additional timber support which slowed ore extraction.
A rail underlay drive commenced on ore below the 3 level to enable production from deeper parts of the mine.
Plant feed was supplemented from the last of the pre-commissioning ore stocks.
Talang Santo Project
Since the discovery of Talang Santo in June 2011, Kingsrose has rapidly advanced the Project with an aggressive drilling program that enabled a maiden resource for the deposit to be calculated (announced to the ASX on December 7, 2011):
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. A total of 134 metres were advanced in the adit and 11 metres in the shaft were completed by the end of the Quarter.
Kingsrose anticipates that by adopting this aggressive development approach it will access trial parcels of ore for evaluation in the June Quarter. Further, issues associated with the intense argillic alteration, erratic quartz development and grade estimation can be resolved ahead of full-scale mine development.
Metallurgical testwork was completed on a composite of vein intercepts from Talang Santo and concluded a clean ore with gold recoveries of 92.3% and silver recoveries of 96% using parameters typical of the Way Linggo ore processing circuit. Kingsrose expects no issues with the processing of Talang Santo ores.
Processing
Plant throughput for the Quarter was 29,860 tonnes at a head grade of 12.8 g/t gold and 161 g/t silver. The plant availability remained high at 95.2% and is benefitting from the installation of the SAG mill in the September Quarter with steadier operation and a significant reduction of materials handling issues.
Metallurgical recovery improved to 91.6% for gold and remained steady at 82.4% for silver.
Record gold production was achieved in the December Quarter with 11,576 oz of gold produced, which exceeded the September Quarter by 19.3% primarily due to higher head grade.
Gold sales for the Quarter totalled US$20.5 million from the sale of 12,152 gold ounces at an average price of US$1,685/oz. Silver sales for the Quarter (silver sold is treated as a by-product credit) totalled US$3.4 million from the sale of 118,000 ounces at an average price of US$29/oz. This included the delivery of 60,015 forward sold ounces at a fixed price of US$26.86/oz.
Operating margins were excellent and the Project generated a cash operating surplus (EBITDA) of US$16.7 million for the Quarter (Kingsrose share 85%). Cash operating costs were higher due to a rise in ground support costs and a reduction of expatriate personnel with resultant one-off redundancy payments adding approximately US$18 to the cash operating cost per gold ounce produced.
Exploration Activities
A high level pf exploration activity continued during the December 2011 quarter. Works were completed on eight of the 17 defined target areas where strong indications of epithermal gold veins have been discovered.
The maiden resource estimate for the recently discovered Talang Santo Prospect was announced to the ASX on 7th December 2011 as a Total Inferred Resource of 879,000 tonnes at 5.89 g/t gold and 14.63 g/t silver containing an estimated 166,400 ounces of gold and 413,000 ounces of silver. Resource definition and extensional drilling continued at Talang Santo during the Quarter and is ongoing.
In addition, scout drilling was progressed at the Semung Kecil, Linggo-Sapta and Rowo Rejo Prospects to evaluate already defined epithermal mineralization and their coincident argillic alteration zones. (end of edited excerpt)