An independent study envisages an open-pit operation employing conventional processing techniques at the Thunderbox gold project in Western Australia. Accordingly,
Thunderbox is part of the Wildara joint venture. LionOre manages the joint venture, in which it has a 60% interest; Dalrymple, which is listed on the Australian Stock Exchange, has 40%.
Discovered in 1999, the deposit is spread among four near-surface zones overlain by a thin cover of overburden and extends beyond a vertical depth of 450 metres. More than 70,000 metres, spaced on lines 20-40 metres apart, have been drilled.
The study proposes a stand-alone operation targeting a reserve of 10.9 million tonnes grading 2.43 grams gold per tonne. The reserve estimate assumes a gold price of US$254 per oz., with a cutoff grade of 0.7 gram for oxidized material and 1.1 grams for primary material.
The deposit would be mined over five years at an average stripping ratio of 3.5-to-1. LionOre will treat about 2.5 million tonnes of oxides in the first year and 2 million tonnes of primary ore in each of the following four years, all of which is expected to yield more than 800,000 oz. gold.
Run-of-mine material will pass through a single stage of crushing, followed by grinding in semi-autogenous and ball mills before moving on to a carbon-in-leach circuit. A 96-98% recovery rate is expected for oxide ore and 92-96% for primary ore after 24 hours under leach.
Capital costs are projected at US$38 million, or less if second-hand equipment is used. Assuming a realized gold price of US$270 per oz., the investment is expected to generate US$51 million in pretax cash flow, an internal rate of return of 50%, and be repaid in a year.
Life-of-mine cash operating costs are pegged at US$157 per oz., though costs will actually average US$110 per oz. in the first year. The higher grades and softness of the oxidized material account for the difference.
Extensions to the mine life may be studied at a later date, particularly the possibilty of going underground. Measured and indicated resources, which include the reserve, top 26.2 million tonnes grading 2.21 grams gold. Another 6.1 million tonnes at 1.8 grams are classified as indicated.
The regional geology is also considered prospective, with more than 1 gram gold having been intersected on each of 30 drill fences. The fences are spaced up to 1.2 km apart and extend on to properties under option to LionOre and Dalrymple. The main objective is to outline near-surface oxide deposits suitable for the proposed Thunderbox facility.
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