Gascoyne Resources Limited ('Gascoyne' or 'Company') (ASX: GCY) is pleased to provide an update on construction activities at the Company's Dalgaranga Gold Project, which contains a Measured, Indicated and Inferred Resource of 31.1Mt @ 1.3 g/t for 1,320,000 ounces of contained gold, which is inclusive of Proved and Probable Ore Reserves of 15.3Mt @ 1.3 g/t for 612,000 ounces of gold.
Process Plant Construction Update
GR Engineering (GRES) has progressed significantly with the design, engineering and construction of the 2.5Mtpa Dalgaranga Processing Plant. Design and engineering is complete and construction is well advanced with completion expected in around 3 months approximately 1 month ahead of schedule.
Construction of the project has progressed ahead of the original schedule, and will now see commissioning and first gold production in May 2018. To date the following activities have been undertaken within the process plant
Concrete and civil works have been completed.
SAG mill installation is well advanced.
The Crusher and ROM bin have been delivered to site and installation is underway.
CIL tank erection is complete.
Steel erection on Site is nearing completion.
The Elution and gold recovery circuit installation has progressed on schedule with electrical cabling and terminations underway.
Reagent storage area has been completed with the final electrical and piping connections underway.
Water services area is nearing completion, including reverse osmosis treatment plant, fire system, raw and process water pumps. Electrical and instrument installation is almost complete with commissioning of this portion of the plant scheduled for late February.
Power Station Construction Update
The Zenith power station and the EVOL LNG fuel storage facility construction is advancing on schedule. Construction of the engine hall and main power control room has progressed significantly in the last month. The backup diesel generators have arrived in Perth and the Jenbacher gas generators have been built and are en route to Australia with delivery to site scheduled for March, with commissioning in late April. The LNG fuel storage tanks are currently being delivered to Site and are expected to be filled and operational in mid April, in preparation for power station commisioning in late April and the process plant commissioning in May.
Mining Contractor Mobilisation and Site Establishment
The Mining Contractor (NRW) has commenced site establishment and mobilisation of the mining equipment. To date one of the excavators, a number of trucks and ancillary mobile equipment has been mobilised. NRW are on schedule to commence mining in early March. As part of the mining contract, NRW have purchased a number of new truck trays that will increase the payloads of the trucks and improve efficency. A number of these new trays have been fabricated and are scheduled to arrive on site in the next few weeks.
Adjacent to the 240 person Dalgaranga village, a dedicated airstrip has been built to accommodate charter planes for the FIFO operation. The airstrip is almost complete and will allow direct flights to site from March 2018.
BACKGROUND ON GASCOYNE RESOURCES
Gascoyne Resources Limited was listed on the ASX in December 2009 and is focused on exploration and development of a number of gold projects in Western Australia. The Company's 100% owned gold projects combined have over 2.3 million ounces of contained gold on granted Mining Leases:
The Dalgaranga project is located approximately 65km by road NW of Mt Magnet in the Murchison gold mining region of Western Australia and covers the majority of the Dalgaranga greenstone belt. After discovery in the early 1990's, the project was developed and from 1996 to 2000 produced 229,000 oz's of gold with reported cash costs of less than $350/oz.
The project contains a JORC Measured, Indicated and Inferred Resource of 31.1 Mt @ 1.3 g/t Au for 1,320,000 ounces of contained gold. The Dalgaranga project has a Proved and Probable Ore Reserve of 612,000 ounces of gold. The Ore Reserves are included in the Mineral Resource. The FS study that has been completed has highlighted a robust development case for the project. The FS investigated the development of two open pits feeding a 2.5 Mtpa processing facility resulting in production of around 100,000 ozpa for 6 years and concluded that the operation would be a low cost, high margin and long life operation with high operating margins. Significant exploration potential also remains outside the known resources with numerous historical geochemical prospects only partly tested.
GLENBURGH: The Glenburgh Project in the Gascoyne region of Western Australia, has a Measured, Indicated and Inferred resource of: 21.3Mt @ 1.5 g/t Au for 1.0 million oz gold from several prospects within a 20km long shear zone A preliminary feasibility study on the project has been completed that showed a viable project exists, with a production target of 4.9 Mt @ 2.0 g/t for 316,000 oz (70% Indicated and 30% Inferred resources) within 12 open pits and one underground operation. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised. The study showed attractive all in operating costs of under A$1,000/oz and indicated a strong return with an operating surplus of A$160M over the 4+ year operation. The study included approximately 40,000m of resource drilling, metallurgical drilling and testwork, geotechnical, hydro geological and environmental assessments. Importantly the study has not included the drilling completed during 2013, which intersected significant shallow high grade zones at a number of the known deposits.
The project includes the high grade Hibernian deposit and the high grade Gaffney's Find prospect, which lie on a granted mining leases Previous drilling includes high grade intercepts, 14m @ 71.7 g/t gold, 34m @ 14.8 g/t gold, 8m @ 11.4 g/t gold, 2m @ 147.0 g/t gold, and 5m @ 96.7 g/t gold associated with quartz veining in shallow south-west plunging shoots. The Hibernian deposit has only been drill tested to 70m below surface and there is strong potential to expand the deposit with drilling testing deeper extensions to known shoots and targeting new shoot positions. Extensions to mineralised trends and new regional targets will be tested with Aircore during drilling campaigns.
Gascoyne is developing the 100% owned low capex, high margin Dalgaranga Gold Project which is on schedule to be in production late in the second quarter of 2018, while continuing to evaluate the near term 100% owned Glenburgh Gold deposits to delineate meaningful increases in the resource base and progress project permitting. Exploration is also continuing at the 100% owned high grade Egerton project; where the focus has been to assess the economic viability of trucking high grade ore to either Glenburgh or to another processing facility for treatment and exploration of the high grade mineralisation within the region.
Tel: +61 8 9481 3434
Fax: +61 8 9481 0411
Email: [email protected]