KBL Mining, formerly Kimberley Metals reports the Mineral Hill mine has achieved sustained concentrate production, process plant feed rate achieving 16% above design and first production stope outperforms on copper grade. The mines lies some 65 km north of Condobolin in central-western New South Wales, Australia.

• Mill feed rate currently running 16% above forecast at 35 t/h or an annualised 290,000 t at 95% plant availability
• 25% increase in forecast monthly copper concentrate production from 1,500 to 1,900 t of copper concentrate
• Annual metal production rate from Parkers Hill underground mine is 5,400t/y of copper with 100,000 oz of silver and 1,500 oz of gold
• Four copper concentrate shipments made in 2011 within smelter specification requirements
• Next shipment of 1,500 t of copper concentrates is due to depart Port Botany on January 26 2012
• Future copper concentrate shipments are scheduled at regular three week intervals.

Copper recoveries have continued to achieve 85 to 90% and the average concentrate grade has maintained greater than expected 25% contained copper. This is attributable to maintaining a consistent high ore grade feed to the plant. The presence of bornite and chalcopyrite in the ore from Parkers Hill underground mine results in a higher quality concentrate.

A targeted 10% increase in mill feed from the historically forecast rate of 250,000 t/y of ore to 275,000 t/y was achieved in late December 2011. This was several weeks earlier than management’s expectation. Expanded production is now achieving an average of 35 t/h, that equates to rate of 290,000 t/y or a 16% overall increase. Planned copper metal production from Parkers Hill underground mine has increased from 4,600 to 5,400 t/y in concentrate.

The bottlenecks on mill capacity have been resolved with installation of a new tailings pipe and tailings pump, and cyclone feed pump upgrade. The changes have resulted in greater assurance in achieving scheduled concentrate production. Coarser grind has been achieved with 106 micron in mill No.1, and 130 micron in mill No.2. Further gains are expected in mill feed based on coarser grind metallurgy test work completed by the company. Indications are that high copper recoveries are still achievable at coarser grinds in excess of 150 micron.

The Parkers Hill underground mine continues to perform in line with expectations. Sustainable ore supply to the process plant is being achieved at an increased rate to support the increased plant feed utilising the mining
contractor’s current personnel and mine fleet equipment.

The first production stope is delivering average ore grades of 3.2% Cu versus the model of 2.14% Cu and continues to contribute up to 70% of ore production. Development ore complements stope production at an average of 4 m (or 300 t) per day.

The second production stope is now developed and production drilling is in progress with the first blast to be completed this week. A new two-year mine schedule has been completed to maintain the increased production to meet plant feed. A detailed mine strategy that includes development and production from the Eastern Southern Ore Zone (ESOZ) and Southern Ore Zone (SOZ) is near completion.

A new dewatering bore is fully operational and the improved pumping rate in the underground mine is lowering water levels by up to 9 m/month. This will accelerate access to the Eastern Southern Ore Zone (ESOZ) and Southern Ore Zone (SOZ) within the next 12 months. Higher gold grades within copper ore at ESOZ and SOZ will substantially increase gold and silver credits in copper concentrates above the current lower gold grade copper mined at Parkers Hill underground mine.

In-mine drilling is planned to commence from early February in the underground mine at Parkers Hill aimed at depth and strike extensions to the existing Reserves. The lowest level (1190) at Parkers Hill underground mine has high grade (greater than 3%) copper exposed in the floor of the existing development and the first stope. The Resource and Reserves are constrained only by the lack of drill information at depth below this level. Geological expectations are that ore will extend at least 30 metres below the present Reserve and add to mine life.

Executive Chairman, Jim Wall: “The gains in process plant performance are contributing to reducing forecast unit costs and are positive for further operational improvement. The performance from the mine is especially pleasing that it is meeting the increased demand from the plant at better than anticipated grades. The company is looking forward to a successful 2012 at Mineral Hill as mining and processing is now in steady state and performance is above expectations.”