Empire Resources (ASX: ERL) has completed its latest processing campaign at Lakewood Mill for its Penny’s Find ore – selling its gold for an average of A$1,660 per ounce premium to the A$1,500/oz base that was estimated in the feasibility study.
According to its feasibly study, for its first 12 months of operation, Penny’s Find was forecast to generate A$7.6 million in free cash flow for Empire based on the A$1,500/oz estimate. For every A$100/oz over that base price, the study allocated an extra A$2 million in revenue for the company.
At the A$1,660/oz average, Empire calculates the campaign produced about A$7 million worth of gold.
This latest campaign at Lakewood fed 34,659 tonnes of ore through the mill, recovering about 4,200 ounces, with 40% of the gold picked up in the gravity circuit.
The average gold grade at 4.07 grams per tonne was in line with the resource estimate of 4.62g/t and 71% higher than the maiden processing campaign which averaged 2.38g/t.
“This treatment campaign has confirmed increasing gold grades with depth in line with the geological model,” Empire managing director David Sargeant said.
“In the final seven days of the campaign, the calculated head grade for ore from the deepest parts of the current pit averaged 4.90g/t gold,” Mr Sargeant added.
As open pit mining progresses at Penny’s Find, Empire is working on moving to an underground operation.
Earlier this month, the company reported a 45% increase to its underground resource at Penny’s Find with the updated resource sitting at 248,000t grading 7.04g/t for 56,000oz gold.
Located directly under Penny’s Find open pit, the resource extends 250m below the surface and remains open at depth.
In mid-November, the company appointed Stephen Rodgers to manage the underground feasibility study where Empire is hoping to extend the mine life another 10 years.
In addition to managing the feasibility study, Mr Rodgers is working on securing requisite approvals and collating documents to gain mine expansion financing.
He is also preparing on-site infrastructure to assist with progressing the operation from open pit to underground.
Empire holds a 60% stake in Penny’s Find with Brimstone Resources retaining the other 40%.
In early morning trade, Empire’s share price was unchanged at A$0.019.