Empire expands as initial production produces cash flow of more than $2 million

Empire Resource ERL first gold bar pour Penny's Find
Empire Resources' first gold bar from Penny’s Find.

Empire Resources (ASX: ERL) has confirmed rising cash flow after finalising the first production campaign from its Penny’s Find mine.

Empire Managing Director, Mr David Sargeant, said the campaign had produced more than $2 million of gold and cash flow would continue to rise as higher grade ore was processed.

“The first treatment campaign has confirmed the free milling nature of Penny’s Find ore and its high gravity gold recoverable component,’’ said Mr Sargeant.

Good recovery figures, particularly from gravity circuit

While still subject to final confirmation and mint refining, Mr Sargeant said the first processing of 21,710 tonnes of ore at Golden Mile Milling’s Lakewood Mill at Kalgoorlie-Boulder had produced more than 1500 ounces.

Taking 15 days, overall gold recovery was an excellent 94 per cent, with 44 per cent of the gold recovered in the gravity circuit.

The calculated head grade of the ore was 2.38 g/t gold – a number which is expected to rise as higher grade ore from deeper in the Penny’s Find open pit begins to be processed.

More cash on the way this month

Mr Sargeant said a second round of grade control drilling had confirmed the geological model being used for Penny’s Find and showed that gold grades would continue to rise as the higher grade part of the ore body was exploited.

A further 16,000 tonnes of Penny’s Find ore is being processed at the Burbanks toll milling facility south of Coolgardie and is expected to produce further cash flow this month.

A deep diamond drilling exploration campaign at Penny’s Find, 50 km northeast of Kalgoorlie in Western Australia, will provide important data for a feasibility study for the mine to progress to an underground stage.

Lower cost production being sought

Empire Resources has been actively trialling different toll treatment plants to keep a lid on transport and production costs.

In addition to production at Lakewood and Burbank, Empire has also entered into a Memorandum of Understanding (MOU) with Poseidon Nickel, to evaluate the option of using its Black Swan mill to process Penny’s Find ore.

Black Swan is just 48 kilometres by road from Penny’s Find, with lower road haulage costs making it a potentially cheaper processing option compared to the 63 kilometre trip to Lakewood and the 105 kilometre trip to Burbanks.

John is a highly experienced business journalist and formerly chief business writer for the Herald Sun. He has covered Federal politics in Canberra, was Los Angeles Bureau chief for News Limited and was also chief of staff for the Herald Sun. He has covered a wide range of small and large cap ASX stocks and has a special interest in mining and technology.