Infill drilling highlights upside to high-grade Tampia gold resource

Posted by Daniel Gleeson on 18th September 2018

Infill drilling of the Tampia deposit has strongly validated the high-grade profile of the current Tampia Resource model and highlighted potential upside to the estimated mineable inventory.  A total of 70 holes on a 10 m by 10 m spacing (for 4,076 m) has been completed on part of the Tampia Resource as part of a broader infill program. Better intersections from this drilling included:

– 6m at 17.18 g/t Au from 25m
– 21m at 4.50 g/t Au from 46m
– 10m at 12.69 g/t Au from 47m
– 5m at 9.54 g/t Au from 40m
– 10m at 4.56 g/t Au from 46m
– 8m at 17.27 g/t Au from 11m
– 7m at 6.43 g/t Au from 16m
– 1m at 58.20 g/t Au from 63m.

Grade reconciliation between the infill drill results and the Tampia Resource model has been positive. Of the 70 holes drilled to date, 38 returned intercept grades better than estimated by the Tampia Resource model, 14 were in-line and only 18 were lower than estimated.

The infill drilling also intersected additional, smaller zones of gold mineralisation that are not contained within the existing Tampia Resource. These areas are treated as barren within the existing Tampia Resource model and, if repeated in other areas of planned infill drilling, could significantly increase the contained gold endowment available for mining.

Some 118 holes for 7,552 m remain to be drilled as part of the infill program. Given the comfort provided from the initial infill results, this remaining drilling has been reprioritised to 4Q 2018 as the current exploration focus is on the Mace and Anomaly 8 drilling programs.

Commenting on the Tampia infill results, Explaurum Managing Director, John Lawton said: “It is very pleasing to see that close-spaced drilling of the Tampia Resource has not only confirmed the high-grade nature of the Tampia deposit but also intersected additional zones of gold mineralisation between the previous 40m by 40m resource holes. This provides Explaurum with significant confidence in the validity of the Tampia Resource model as well as the clear potential for the Tampia deposit to contain more gold within the planned mining areas.

“In combination with the Mace and Anomaly 8 discoveries, Explaurum now has three near-term opportunities to expand mining inventory and life at the Tampia Project, and continue to drive its already impressive forecast returns. The confirmation of ultramafic gneiss within the sequence provides additional confirmation that Tampia is part of a new unexplored greenstone sequence like the Southern Cross Belt, 120 km to the east, which has multiple clusters of gold occurrences. We see similar potential for the Tampia region.”

Tampia is located about 240 km east of Perth in the wheat belt of Western Australia. In May 2018 Explaurum announced the completion of a feasibility study for the development of Tampia, which confirmed it as a high-margin gold project.  In addition, Explaurum announced an initial Ore Reserve of 7.2 Mt grading 2.09 g/t Au. Highlights of the feasibility study include:

  • Tampia confirmed as technically sound and financially robust with an initial project life of six years with operating costs in the lowest quartile of gold projects globally
  • Mining plan based on staged development of a single open pit and conventional SAG milling, gravity, flotation with ultra-fine grind (UFG) and enhanced leaching of concentrate, and CIL circuit based on 1.5 Mt/y throughput
  • Updated Mineral Resource of 675,000 oz gold from 11.7 Mt grading 1.79 g/t Au
  • Initial Ore Reserve of 485,000 oz gold from 7.2 Mt grading 2.09 g/t Au
  • Initial mine plan of 534,000 oz gold from 8.0 Mt grading 2.07 g/t Au with excellent potential for resource growth
  • Estimated all-in sustaining cost (AISC) is A$896/oz for the first two years of operations and A$998/oz over LOM, with 104,000 oz Au produced for each of the first two years of operations
  • Pre-production capital cost estimate is A$119 million (including a A$10.8 million contingency) and payback in 18 months from commissioning
  • NPV at 8% discount rate is A$125 million (pre-tax) and IRR is 47% (pre-tax) at A$1,650/oz gold price
  • Timeline for project development is completion of BFS in October 2018, with subsequent construction subject to development finance, regulatory and Board approvals (expected December 2018)
  • Major exploration program over new gold targets to continue through 2018 and 2019; any growth in resource inventory expected to augment current planned mine life.