(MENAFN- ProactiveInvestors)
() will in 2015 commence operations at central deposits such as Bartons at its Nullagine Gold Project in Western Australia’s Pilbara region.
These deposits will progressively replace Golden Eagle material as the primary source of mill feed in the medium term.
This will allow the mine to defer mining of the refractory ore encountered in areas of Golden Eagle until assessment of the flow sheet work is completed.
Possible options for future treatment of fresh Golden Eagle material at depth will be assessed and reported on once test work is completed.
Golden Eagle Deposit
Millennium has experience several problems with the Golden Eagle deposit as mining operations advanced into fresh ore zones.
These include reconciliation issues lower grades and variable metallurgical recovery.
While feasibility study work on these fresh ore zones indicated lower recovery and harder ore and those factors were taken account of in mine planning actual results have been more erratic and in some areas even lower than planned grades and recoveries have been achieved.
Investigations by both internal personnel and external consultants have not completely resolved the issues and work continues in this area.
The company’s ability to source mill feed has allowed it to avoid any impact on gold production.
However the higher than planned operating cost being experienced is a result of the higher strip ratio being encountered to achieve this production.
Conceptual flow sheet testing is being carried out at laboratory scale to enable the company to understand the metallurgical processing requirements for all the fresh ore zones within the Golden Eagle deposit.
This will allow it to fully exploit the current mining inventory as well as the deposit at depth which is not closed out.
Nullagine Gold Project
In the September quarter Millennium poured 18127 ounces of gold from the Nullagine project above the upper end of its guidance of 16000 to 18000 ounces.
C1 cash costs were down 8% on the last quarter to A$1081 per ounce while sustaining cash costs also fell 8% to A$1197 per ounce.
This produced revenue of $27.4 million with a gross operating margin of A$435 per ounce.
At 30 September 2014 the Company’s “in the money” hedge book had a mark‐to‐market valuation of $5.7 million ($14.6 million at 31 December 2013) based on the spot price of A$1390 per ounce at that date.
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