Mount Monger Operations - WA (Silver Lake 100%)

Overview

  • estimated 10 year LOM at an all-in sustaining cost of A$1,070/oz
  • H1 FY14 EBITDA of A$38.8 million with all-in sustaining costs of A$1,016/oz (global average approx. A$1,360/oz)
  • positions Silver Lake as a high margin producer in a first world jurisdiction
  • 2 operating mills with combined capacity of 2.0mtpa
  • multiple mines in production: 5.0 to 7.0 g/t Au underground and 2.0 to 3.0 g/t Au open pit
  • 3.6Moz of resource including 0.8Moz of reserve
  • focusing capital on further optimising and funding growth project pipeline
  • FY14 guidance of 160,000 to 170,000 ounces of gold

Background

The Mount Monger goldfield is situated within the Kalgoorlie terrane subdivision of the Eastern Goldfields Province. Gold mining began in the Mount Monger area during the early 1900s. The field is marked by a series of historic workings extending northward under recent shallow alluvial cover towards a significant drainage channel. Only sub-cropping mineralisation appears to have been exploited by early miners, with historic workings in the field typically extending to depths of no greater than 80 metres below the surface.

Mount Monger has produced gold from Daisy Milano, Haoma and Rosemary underground mines as well as the Maxwells open pit.  The Magic, Lorna Doone, Wombola Dam, Wombola Pit deposits as well as Majestic, Imperial, Cockeyed Bob, Santa and Fly Camp deposits are emerging mines that are being optimised for open pit and underground potential.

Location

Mount Monger Operations LocationThe Mount Monger goldfield is located 50 km southeast of Kalgoorlie and is accessible via the Mount Monger road which is bitumen for 15 km then an all weather road for the remaining 35 km. The project area covers 1,728 km2.

Geology

The dominant rock types hosting the gold mineralisation are felsic and mafic units. The former comprises felsic to intermediate pyroclastic rocks and coarse volcanogenic sediments. The overlying mafic unit comprises high magnesium basalt with thin chert members. Both units are intruded by layered ultramafic to mafic sills and dykes of felsic porphyry.

Gold mineralisation is hosted by thin (1.0 cm – 2.0 cm up to 1.0 metre wide), sub-vertical dipping quartz veins within north to northeast trending shear zones. Some east-west trending crosscutting zones are also reported to be mineralised.

Resources and Reserves

Regionally, previous explorers in the Mount Monger goldfield concentrated on finding near surface, oxidised mineralisation suitable for open pit mining. However, historical mining points to the high grade, quartz reef hosted nature of the mineral field, indicating that the real thrust should have been directed towards finding more Daisy Milano look-a-like structures, where ore grades of over 10 g/t Au could be expected. 

A large mining company initiated a gold potential study of the Mount Monger field in June 2003. Interpretation of the mineralised structures identified targets with the potential to host between 2 Moz and 4.5 Moz over nine independent zones down to a depth of 500 metres. That Company did not proceed with a transaction because the project did not meet its minimum 5 Moz endowment criteria. 

Systematic exploration is being undertaken to determine the overall resource potential.

Gold Resources

  Measured Resources Indicated Resources Inferred Resources Total Resources
Deposit Ore
t
'000s
Grade
g/t Au
Total
Oz Au
'000s
Ore
t
'000s
Grade
g/t Au
Total
Oz Au
'000s
Ore
t
'000s
Grade
g/t Au
Total
Oz Au
'000s
Ore
t
'000s
Grade
g/t Au
Total
Oz Au
'000s
Daisy Milano 139.2 18.6 83.1 705.5 14.6 331.1 763.7 8.3 203.8 1,608.4 12.0 618.0
Haoma 701.7 11.1 250.4 396.3 13.5 172.0 78.8 11.3 28.6 1,176.8 11.9 451.0
Haoma West - - - 45.0 8.7 12.6 145.7 10.1 47.3 190.7 9.8 59.9
Christmas Flat - - - 338.6 4.1 44.1 448.5 6.3 91.3 787.1 5.4 135.4
Costello - - - - - - 111.0 4.0 14.3 111.0 4.0 14.3
Lorna Doone - - - - - - 128.0 3.1 12.8 128.0 3.1 12.8
Magic - - - 749.2 4.1 98.3 1,071.0 5.2 178.0 1,820.2 4.7 276.3
Wombola Pit - - - 197.0 3.6 22.9 72.7 3.2 7.5 269.7 3.5 30.4
Wombola Dam 288.6 3.8 35.1 271.7 3.2 28.3 143.7 2.8 12.9 704.0 3.4 76.3
Hammer & Tap - - - - - - 350.2 2.4 27.4 350.2 2.4 27.4
Total Mount Monger 1,129.5 10.2 368.6 2,703.3 8.2 709.3 3,313.3 5.9 623.9 7,146.1 7.4 1,701.8

Gold Reserves

  Proved Reserves Probable Reserves Total Reserves
Ore
t
'000s
Grade Incr Total
'000s
Ore
t
'000s
Grade Incr Total
'000s
Ore
t
'000s
Grade Incr Total
'000s
Daisy Milano - -   - 1,231.7 5.6 g/t Au 219.7 1231.7 5.6 g/t Au 219.7
Haoma - -   - 792.1 5.1 g/t Au 130.7 792.1 5.1 g/t Au 130.7
Wombola 222.8 1.6 g/t Au 11.3 344.6 1.8 g/t Au 19.7 567.4 1.7 g/t Au 31.0
Mt Monger Stockpile 324.9 2.6 g/t Au 27.7         324.9 2.6 g/t Au 27.7
Total Mount Monger 547.7 2.2   39.0 2,368.4 4.9   370.1 2916.1 4.4   409.1