AuStar to begin production from historic Victorian gold mines

AuStar Gold (ASX: AUL) is to commence production this month from its historic Morning Star and Rose of Denmark mines in Victoria’s eastern goldfields, almost four weeks ahead of the original target date.

Development activities including procurement and logistics began this week, with processing expected to start before month-end.

AuStar said it had gained the “requisite level of confidence” in its minerals inventory estimation and mine planning to start production before the previously-announced target date of March.

The company has a substantial initial gold mineral inventory to sustain production over the next six months, and will replace and add to the stocks via ongoing success from further exploration activity.

A gravity processing plant at Morning Star will initially operate at 85 tonnes per day throughput on a week on/week off basis, and is expected to steadily increase.

Chief executive officer Tom de Vries said the decision to commence production reflected the “excellent progress” which had been achieved with recent exploration activity.

“We have repeatedly witnessed diamond drill core with visible gold and accompanying outstanding high-grade assay results, which gives us confidence that mining can be undertaken successfully,” he said.

“Our process plant [at Morning Star] is proven [and] the infrastructure is well-tested … while initial throughput rates will be modest, further exploration success will enable increased production over time.”

Mine development plan

AuStar’s mine development plan at Morning Star will focus on the McNally’s Reef and Stone’s Reef high-grade mineralised systems discovered in September.

The bulk of the material for plant feed will initially come from McNally’s Reef and the Rose of Denmark mine while development is completed to access Stone’s Reef.

Mr de Vries said the plan includes exposing the reef at McNally’s, developing along the structure to target the stoping on the highest grade drill holes.

He said a similar approach would be taken to selective mining at Stone’s Reef, targeting zones where high-grade gold drill holes are known to proliferate.

At midday, shares in AuStar Gold were trading 25% higher at $0.005.