Empire Resources (ASX: ERL) has struck gold grading up to 15.60 grams per tonne (g/t) within the underground extension of its operating Penny’s Find mine near Kalgoorlie in Western Australia.
Better results from the six-hole diamond drill program were 1.63m grading 15.60g/t gold, 3.52m grading 6.32g/t gold including 1.22m grading 12.34g/t gold, and 1.94m grading 10.57g/t gold.
The recent drilling results complement previous assays taken from the ore body – boosting the company’s confidence.
“Results from the recent underground drilling have given us the confidence to move ahead with a final underground feasibility study to extend Penny’s Find’s mine life beyond the open pit,” Empire Resources managing director David Sargeant said.
“With gold mineralisation open at depth, there is good potential to add to the current underground indicated and inferred resource of 170,000 tonnes grading 5.40g/t gold.”
To-date the underground mineralisation at Penny’s Find extends 250m deep and remains open.
Test work has revealed the mineralisation is amenable to free milling with 85% gold recovered in a high gravity circuit.
Empire’s next steps will include updating the underground resource estimate and undertaking final feasibility study in to an underground operation.
The company anticipates these will be completed in the next few months.
Empire produces more than A$2 million in gold as production ramps up
After completing its maiden processing campaign last month, Empire Resources is bringing in cash flow with more anticipated as it hits higher grade ore.
Open pit mining at Penny’s Find started in May this year with the company trucking 37,710 tonnes of ore to the nearby Lakewood and Burbank processing plants for its first processing campaigns.
Using existing nearby facilities ensured minimal capital expenditure and fast-tracked the Empire Resources’ exploration to production time-line.
The company’s longer-term strategy is to progress its current open pit operation to an underground mine with a minimum 10-year life.
Under the company’s existing feasibility study for an open pit operation at Penny’s Find, Empire Gold anticipates A$7.6 million in free cash flow for the first 12 months based on a A$1,500 per ounce gold price.
This does not include the approximate A$2 million in additional revenue for every A$100 per ounce over the A$1,500 base spot price.
Empire Resources could potentially achieve substantially more revenue if current gold prices prevail, with the precious metal commanding A$1,659.68 per ounce at market close on Friday.