Emerging gold producer Empire Resources (ASX: ERL) is now busily logging six diamond drill cores as it moves closer to turning its Penny’s Find open pit gold mine into an underground operation.
Releasing Empire’s quarterly report until the end of September, chief executive David Sargeant said the core was now being geologically and geotechnically logged to establish an optimum mine design for future underground operations underneath the existing open pit.
“The aim of this drilling was to increase confidence in this mineralisation, convert some Inferred resources to Indicated and to yield important additional geotechnical data for underground mining studies,’’ said Mr Sargeant.
Underground feasibility study pending
He said the completion of the drilling was an important precursor to starting a final underground feasibility study.
Once the logging is finished, the mineralisation that has been visually identified will be assayed.
The completion of deeper drilling marks the latest phase of a fairly hectic year for Empire Resources during which it entered production at Penny’s Find, 50 km northeast of Kalgoorlie in Western Australia.
During the September quarter, grade control drilling confirmed the geological model of higher grade gold ore being found at depth, which increases the chances of the mine entering an underground phase.
The first treatment campaign showed that Penny’s Find ore was free milling with good recoveries from the gravity circuit at Golden Mile Milling’s Lakewood Mill at Kalgoorlie-Boulder.
After the end of the quarter, Mr Seargant announced that 29,275 tonnes of ore had been mined at Penny’s Find, with initial production at the Lakewood Mill producing more than 1500 ounces of gold worth more than $2 million.
A 200 ounce doré bar was poured at Lakewood solely from gravity recovered gold and has been sent to the Perth Mint for refining so that final treatment numbers and costs can be calculated.
Production ramping up
Production is now expected to ramp up further as higher grade ore from the lower parts of the open pit are accessed.
Overall gold recovery was an excellent 94 per cent, with 44 per cent of the gold recovered in the gravity circuit and the first gold pour also occurring after the end of the quarter.
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.
Trialling different treatment options
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 now that initial recommissioning woes have been overcome.
Empire Resources has also been actively trialling different toll treatment plants to keep a lid on transport and production costs.
In addition to production at Lakewood and Burbanks, 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.