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Mount Magnet South Limited (MUM)
is a publicly listed company on the Australian Securities Exchange (ASX).
About Mount Magnet South
Mount Magnet South NL (ASX: MUM) is an emerging gold producer focused on unlocking the substantial value within the Company's asset base, which includes the existing Kirkalocka plant and camp facilities (the mine site was operational until August 2008), significant gold resources at Kirkalocka and an extensive tenement holding in a highly prospective region in Western Australia.
The Kirkalocka Gold Project ("KGP") represents the Company's core asset. The KGP comprises the existing plant and camp facilities (with an estimated replacement value of in excess of $70 million), significant gold resources and reserves, and an extensive surrounding tenement holding prospective for gold, nickel and iron ore.
In addition to the KGP, a pipeline of future strategic projects has been established with the identification of the untapped potential of the Jumbulyer goldfield, 15km south west of the town of Mount Magnet and the recent discovery of outcropping hematite at the Wudgee Hills Iron Project, 11km south of the Kirkalocka Gold Project.
At the Jumbulyer Gold Project ("JGP"), the Company has successfully identified multiple near surface higher gold grade mineralisation targets. The Company considers that the JGP provides the opportunity to identify smaller tonnage but higher gold grade targets which when combined with the KGP resource base have the potential to significantly improve the physical and financial outcomes of the KPG.
Kirkalocka Gold Project
The Kirkalocka Gold Project (“Kirkalocka”) consists of 13 tenements of pre-1994 granted mining leases covering 699 square kilometres located in Australia’s 2nd most prolific gold producing region.
Mount Magnet South’s Optimised Feasibility Study into the re-commencement of operations at Kirkalocka, completed in March 2013, demonstrates a project capable of generating significant cash flow:
Kirkalocka’s current Mineral Resource is 548,000 gold ounces, with 428,000 ounces in the Indicated Category, including 66,000 ounces of oxide mineralisation, which occurs near surface and has the highest gold recovery rates (96%) of the Kirkalocka ore types.
Kirkalocka’s entire Mineral Resource and Ore Reserve lie within 900 metres of the Curara Well open pit mined by Equigold until October 2005, which produced 294,000 ounces of gold at an average grade of 1.62 grams per tonne. With mineralisation open to the south of the pit, to the north of the pit and at depth, Mount Magnet South has ample opportunity to add ounces to the current Mineral Resource and Ore Reserve at Kirklocka. (The best drill result at depth within the Curara Well open pit is 33 metres at 7.78 grams per tonne form 170 metres – this mineralisation sits below the proposed pit in the Optimised Feasibility Study.)
Mount Magnet South has been granted all major licenses and permits for the recommencement of operations at the Kirkalocka including:
- Project Management Plan to operate
- Mining Proposal and Mine Closure Plan
- Project Management Plan for treatment plant refurbishment
- Vegetation Clearing Permit
- Works Approval for uplift of the tailings storage facility
- DEC Prescribed Premise License to operate
- Groundwater abstraction licence – pit dewatering.
High grade, near surface gold mineralisation identified within the Jumbulyer Gold Project provides an opportunity to increase the targeted production at Kirkalocka while lowering overall cash costs.
Jumbulyer Gold Project
The Jumbulyer Gold Project ("Jumbulyer") consists of 31 current and pending tenements covering 129 square kilometres located in Australia's 2nd most prolific gold producing region. Jumbulyer is located approximately 15 km southwest of the town of Mount Magnet and 65 km north of the Kirkalocka Gold Project.
Two scout drilling programs at Jumbulyer have identified two mineralised structures that have the potential to add higher grade gold mineralisation to the Kirkalocka resource base, providing an opportunity to increase the targeted gold production to 100,000 ounces per annum while lowering overall costs.
At the Foothills Prospect, a significant high gold grade steeply plunging structure has been discovered. The structure has been defined to extend over 100 meters down plunge and remains open at depth and along strike. Drill results include:
- 3 metres @ 10 grams per tonne Au
- 16 metres @ 6.7 grams per tonne Au
- 10 metres @ 3.3 grams per tonne Au
- 20 metres @ 3.0 grams per tonne Au
- 14 metres @ 2.6 grams per tonne Au
Figure 1: Foothills Prospect High Grade Steeply Plunging Structure
At the Daveys Prospect, drilling has identified a broad zone of near surface gold mineralisation over an area of 125 metres by 100 metres. The zone remains open along strike and at depth. Drill results include:
- 11 metres @ 5.3 grams per tonne Au from 3 metres down hole
- 6 metres @ 3.4 grams per tonne Au from 12 metres down hole
- 5 metres @ 2.2 grams per tonne Au from 25 metres down hole
- 4 metres @ 2.9 grams per tonne Au from 35 metres down hole
Figure 2: Daveys Prospect High Grade Near Surface Targets
Further drilling at Jumbulyer is planned to test targets for additional higher grade gold mineralisation, along with infill drilling for resource estimation purposes, with the objective of adding high grade mineralisation from Jumbulyer into the production profile at Kirkalocka to improve the overall project economics.
During a mapping program on Jumbulyer, Mount Magnet South's geological team identified a surface copper anomaly of 650 metres by 500 metres. Surface rock chip sampling returned up to 18% copper and was supported by the resample of a historic drill hole returning 8 metres @ 1.5% Cu from surface and a newly drilled hole returning 19 metres @ 1.3% Cu, 0.46 g/t Au and 4.9 g/t Ag. This newly emerging copper exploration target will be integrated within the Company's exploration strategy for 2013.
Kirkalocka Gold Plant
Mount Magnet South NL has substantial existing infrastructure at the Kirkalocka Gold Project including:
- 1.6 – 2.2Mtpa processing plant;
- Primary and secondary crushing circuit;
- Gravity and carbon in leach/carbon in pulp circuits;
- 1.4 MW SAG mill;
- 3.6 MW power station (independently owned);
- 1800 metre air strip;
- Tailings storage facility and waste landform;
- 110 room camp with all associated offices, warehouses and workshops.
The existing infrastructure at the Kirkalocka Gold Project means that capital expenditure required for the recommencement of operations is relatively low.
Wydgee Hills Project
The Wydgee Hills Prospect is located 80 km south of Mount Magnet and 10 km south of the Kirkalocka Gold Project.
The Company has recently commenced systematic exploration for hematite iron mineralisation over a group of existing and recently acquired tenements that cover a 10 km strike length of banded iron formation (BIF). This work has involved field mapping of outcrops in the Wydgee Hills Prospect area with particular focus on targeting hematite mineralisation within the Wydgee Hills Synform fold structure.
Work to date has identified a series of partially covered (by recent deposits of alluvium and colluvium) units of hematite and goethite in an area previously considered to be only prospective for magnetite rich iron deposits. Field mapping has defined outcropping units of hematite - goethite ranging in width between 8 to 25 m on the eastern limb of the Wydgee Hills Fold synform structure. Several semi continuous north to south trending hematite rich units have been defined over a strike length of 3 km on the eastern fold limb. Results from 23 surface outcrop samples targeting the eastern limb of the hematite - goethite rich units have been returned with grades up to 62.7% Fe. The majority of these recent results occur between the range of 52% Fe to 62% Fe. This area has not been tested by past exploration.
The dimensions and continuity of these hematite - goethite mineral occurrences are not adequately defined and as such this would form the basis of an on-going future iron exploration program.
Mount Magnet South Limited
Suite 5, Level 1
10 Outram Street
West Perth, WA
+61 8 9213 8900
Fax: +61 8 9213 8901
The General Overview, Services, Products and Projects information for this profile was last edited on 02 Aug 2016.