The Balcooma property is near Newcrest’s Mount Garnet milling facility, where detailed design work is under way to create a copper circuit. Conditioning tankage will be added and upgrades to the filter system are planned.
The Balcooma project area contains at least four significant volcanogenic massive-sulphide deposits: Surveyor, Dry River South, Balcooma and Balcooma North.
Mining has begun at the Surveyor open pit, about 1.5 km from the Balcooma deposit. Milled grades from the pit have been higher than the estimated reserve grades. The development of a decline into the Dry River South deposit is set to begin in January.
Balcooma consists of a series of stacked lenses. There are at least three lenses of moderate to high-grade zinc and several high-grade copper lenses.
The Balcooma zinc resource was estimated in early 2003 at 360,000 tonnes grading 13.7% zinc.
Supergene copper, formed by the weathering of copper sulphides, accounts for a measured resource at the Balcooma North deposit of 384,000 tonnes grading 4.6% copper, or a probable reserve of 301,000 tonnes grading 4.8% copper within an optimized pit having a stripping ratio of 17 to 1. The Balcooma deposit contains about 90,000 tonnes at 9% copper.
Total probable supergene reserves at Balcooma and Balcooma North are currently estimated at 388,000 tonnes at 5.8% copper, 0.4 gram gold, 14 grams silver per tonne and 0.8% lead plus zinc.
The primary copper resource is estimated to be a measured 1.3 million tonnes grading 3% copper, an indicated 456,000 tonnes grading 3.7% copper and an inferred 242,000 tonnes grading 3.45% copper.
The proposed copper product at the mill will be a copper concentrate grading 28-30% copper. Ore will be processed at 100,000-200,000 tonnes per year depending on the grade. It is expected that the capital cost required for modifications will be less than A$10 million and the new system should be operational in the second half of 2005.
For the quarter ended June 30, Mount Garnet processed over 63,000 tonnes of ore with a grade of 18.1% zinc, 7.6% lead, 0.8% copper, 139 grams silver and 1.1 grams gold per tonne. Cash costs averaged US23 per pound of payable zinc, making the Mount Garnet operation the lowest cost zinc producer in Australia. The plant is operating at a rate of 118,000 tonnes per year of concentrate output. Modifications to the plant should allow this to increase by about 10,000 tonnes.
The 490-sq.-km Balcooma project is 160 km south of Mount Garnet. Zinc concentrate from the Mount Garnet mill is trucked on a daily basis to
At June 30, Kagara Zinc had 166 million shares outstanding and almost 16.9 million convertible loan notes. Cash on hand was A$3.6 million. At presstime shares were trading at 87.
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