Nullagine Gold Project
Millennium Minerals Limited is currently reviewing and updating the detailed feasibility study completed in 2007 on its wholly owned Nullagine Gold Project in the East Pilbara District of Western Australia (Figure 1). The improvement in the Australian dollar denominated gold price dramatically improves project economics and it is now the Company’s view that the current economic outlook makes a compelling case for development of the project.
The Nullagine Gold Project is a 1.1 million ounce gold Mineral Resource, that was subject to a detailed feasibility study completed in early 2006 and revised in early 2007 contained within 5 deposits on granted mining leases. The largest deposit is Golden Eagle located approximately 10 km south of the township of Nullagine and contains 69% of the total Mineral Resource inventory. Much of the permitting and design work for a 1 million tonne per annum Carbon-In-Leach (CIL) processing facility has been completed providing for an early start to development when a decision to mine is made.
The Company has re-examined the basic economics of the Project in light of the improvement in the Australian dollar denominated gold price. The current Mineral Resource estimate for the five project areas now totals 27.63 Mt @ 1.23 g/t Au using a 0.5 g/t Au lower cut-off grade for approximately 1.1 million ounces of contained gold. This is expected to increase when the Mineral Resource estimates are finalised shortly for the Golden Gate satellite deposits, namely Falcon, Condor, Crow, Harrier and G Vein.
A total of 22.16 Mt at 1.26 g/t Au is contained within the Measured and Indicated Mineral Resource categories (Table 1). This represents approximately 80% of the total Mineral Resource for the Nullagine Gold Project.
We have re-scoped the 2007 base case feasibility study which indicates the potential for an 8-10 year operation milling 1 Mt annually through a CIL processing plant. The scoping study was based on a series of pit optimisations of the five deposits. The spot gold price used for the study was US$900/oz and operating cost inputs were internally updated from the 2007 feasibility study base numbers with the US$/A$ exchange rate set at 0.7. The optimisations were conducted on the Measured and Indicated Resources only (22.16 Mt @ 1.26 g/t Au). Various studies were undertaken to assess the potential for CIL stand-alone, heap leach stand-alone and a base CIL operation with heap leaching of medium to low grade material that will be mined and otherwise treated as waste. All cases demonstrated favourable technical and economic outcomes sufficient to warrant completion of the feasibility update and final optimisation studies ahead of an investment decision.
The base case option (excluding the Golden Gate satellite deposits) selected for final update of the feasibility study is a nominal 1 million tonne per annum operation targeting over 500,000 ounces over a mine life of 8-10 years. This case ignores the potential for heap leaching some of the lower grade material (see below).
Depending on the final Ore Reserve established and whether a parallel heap leach operation is possible, a higher throughput rate may be justified and this option will be included in the current studies.
In parallel with this study, the potential for heap leaching the medium to low-grade material will be assessed. The scoping study showed that were this material able to be processed the overall waste to ore stripping ratio of the project could be significantly reduced (under 2:1). The key work to be completed on the base case includes updating mining and processing operating costs inputs and development capital to provide the basis for Ore Reserve definition and project financing. An independent review of the process design is in progress and will be combined with assessment of the availability of process plant equipment. The Company is targeting process equipment and plant that is available now to set in place rapid development for when the decision to mine is made.
|
|
Measured |
Indicated |
Inferred |
Total |
|
||||
Deposit |
Cut-off Grade (g/t Au) |
Mt |
Grade (g/t Au) |
Mt |
Grade (g/t Au) |
Mt |
Grade (g/t Au) |
Mt |
Grade (g/t Au) |
Ounces (Au) |
Golden Eagle |
0.5 |
11.43 |
1.26 |
4.60 |
1.02 |
4.04 |
1.00 |
20.07 |
1.16 |
749,000 |
Shearers |
0.5 |
0.59 |
1.09 |
1.04 |
0.87 |
0.40 |
0.90 |
2.03 |
0.93 |
61,000 |
Bartons |
0.5 |
1.33 |
1.47 |
0.85 |
1.48 |
0.37 |
1.70 |
2.55 |
1.51 |
125,000 |
All Nations |
0.5 |
1.11 |
1.30 |
0.19 |
1.04 |
0.14 |
1.10 |
1.45 |
1.25 |
58,000 |
Golden Gate (ABCD Reef ) |
0.5 |
- |
- |
0.58 |
3.24 |
0.11 |
2.6 |
0.68 |
3.12 |
69,000 |
Little Wonder |
0.5 |
- |
- |
0.44 |
1.13 |
0.4 |
1.2 |
0.85 |
1.17 |
31,000 |
Totals |
0.5 |
14.46 |
1.28 |
7.70 |
1.22 |
5.46 |
1.1 |
27.63 |
1.23 |
1,093,000 |
Notes:
1. Figures in Table may not sum due to rounding.
2. The Mineral Resources were estimated using Multiple Indicator Kriging methodology for grade estimation.
3. The Golden Gate satellite deposits namely Falcon, Harrier, Crow, G Vein and Condor are being
re-estimated and will be reported on in the next four weeks.
4. The table excludes royalties payable to third parties.