Straits reports lower Mt Muro gold, silver production

Australian mining firm Straits Resources Limited reported on Thursday that its Mount Muro gold mine in Central Kalimantan Mt Muro produced 12,720 ounces of gold and 21,300 ounces of silver during the June 2010 quarter, lower compared to March 2010 quarter production of 14,201 ounces of gold and 23,604 ounces of silver.

While ore milled increased for the quarter, production was below forecast due to a fall in mill feed grade, it said, adding that cash costs increased to US$1,288 per ounce of gold from US$1057 per ounce.

Mt Muro continues to implement the recapitalisation program with work progressing on establishing stable operating platforms at the new Soan underground mine and the Serujan East cutback. The decision to recapitalise Mt Muro was based on extracting a reserve of approximately 300,000 gold equivalent ounces, it said.

The recapitalisation programme was based on moving to owner operated mining, the development of the Soan underground deposit and a major cut back at the Serujan East deposit. These new mining developments would supplement the already established Tasat‐Rabu open pit, it added.

In spite of delays in assembling equipment on‐site, the Soan underground is now well under way with all surface infrastructure established and decline development progressing. First ore production is anticipated in November 2010.

The Company said recapitalization investment of $11 million will establish a new underground mine that will produce between 150,000 and 200,000 tpa of ore until 2013/14 at an average head grade of 6.12 g/tonne Au equivalent for 102,000 ounces produced.

?The introduction of underground mining and the development of this skill base and infrastructure will allow this capacity to be leveraged into other underground opportunities as these are identified, a process well under way. In the immediate future, this mine will extend along strike into the Sinter and Sinbar deposits and with further drill success, may allow the underground access and mining of the adjacent Botol deposit from underground,? it said.(alex)

	Units	June 10 Qtr (Q4 FY 2010)	Mar 10 Qtr (Q3 FY 2010)	FY 2010	FY 2009
Ore Milled	tonnes	156,875	131,549	615,544	652,050
Grade - gold	g/t Au	2.8	3.5	2.6	2.6
-Silver	g/t Ag	9	12	12	25
Recovery - Gold	% Au	89.5%	91.3%	89.7%	88.7%
-Silver	% Ag	45.5%	63.6%	58.9%	60.2%
Production (Gold)*	oz Au	12,720	14,201	45,521	48,846
(Silver)	oz Ag	21,300	23,604	143,46	304,357
Gold Sold	oz Au	12,891	13,502	43,754	48,367
* Production reported is gold poured