Exploration of EL 4799 October 1987 to October 1988

Abstract

Exploration and ore-blocking drilling carried out during the quarter has continued to increase the ore reserves and provide some significant intersections. Progress ore resources have been calculated to the end of September; Indicated Ore Resource 438,000 tonnes @ 6.0 g/t gold, Inferred ore resource 27,000 tonnes @ 6.0 g/t gold & Total Indicated and Inferred Ore Resource 465,000 tonnes @ 6.0 g/t gold. This is an increase of 119,000 tonnes over the last progress ore resource statement last quarter. The Company has completed a comprehensive environmental report to support its application for a Mineral Lease and permission to support its application for a Mineral Lease and permission to mine. The report and application have been lodged with the NT Government authorities and it is anticipated that approval will be given in due course. Project feasibility studies are proceeding satisfactorily. Pit designs undertaken during the quarter to support the application for Mineral Lease will be up dated during the current quarter to take into account the latest drilling data. The updated pit designs will form the basis for mining operations in the following lode systems: Luces, West, North, Black Devil, Extended (and Extended West), Excelsior (and Excelsior West). This will give six initial pits for ore extraction. An ore production rate of 200,000 tpa is being considered. Due to the shallow dip of the ore lode systems dilution during extraction will be inevitable. An ore reserve grade of 4.5 g/t gold is estimated allowing for dilution of low grade material. The actual head grade over the medium to long term is expected to vary between 4-5 g/t gold depending on the degree of success of ore selectivity and dilution control during mining. Metallurgical test work has concentrated on optimisation of three alternative treatment routes: a) Crush and fine grind the total ore, b) Crush and heap or vat leach the total ore, c) Using pre- methods so that the majority of the gold is won from fine grinding only a minority of the ore. The majority coarse fraction would be heap or vat leached to recover the remaining gold. Test work is nearing completion and it is anticipated that the optimum route is a total crush and fine grind of the ore using gravity concentration methods to recover free gold during grinding and then agitate cyanide leach the ground product. This is a standard carbon-in-pulp treatment preceded by a gravity concentration. Project feasibility studies are anticipated to be completed within the current quarter.