Perth, Jan 23, 2009 AEST (ABN Newswire) - During the Quarter, Focus Minerals Limited (ASX:FML) completed two milling campaigns (its fifth and sixth overall since production commenced in April 2008) and for the Quarter produced 9,007 ounces of gold. This increases total gold production to 17,445 ounces since production began in April 2008.
The most recent completed milling campaign, which commenced on November 18, ran for 34 days and for the first time involved the blending of a small parcel of Countess ore with stoping ore from the Perseverance deposit. Stoping of the Perseverance Deposit commenced late September 2008 and has proceeded extremely well into the December 2008 Quarter. Ground conditions are very competent with mining rates progressively increasing during the Quarter from the 300RL level. Stoping development also commenced on the 275RL level and will contribute to further increases in the mining production rates into the March 2009 Quarter.
The blending of Countess ore represents the first stage in a planned expansion of the project pipeline to include surrounding deposits within the tenement area.
During the Quarter, the Company announced a significant upgrade to the pre-mine ore Reserve for the Perseverance Deposit which now stands at 100,000 ounces. This represents a 32% increase on the initial Ore Reserve estimate of 76,000 ounces and provides a substantial boost to the Perseverance mine life, which now extends out to approximately two years.
Cash costs increased in the Quarter as mining was directed from the deposit extremities and recovered grade is less than that contained within the central higher grade lodes. It is expected that extraction from the deposit boundary will conclude during January 2009 enabling extraction to commence from the central higher grade zones from February 2009 and will contribute in part to the increased ore feedstock for the February/March 2009 campaign.
Cash costs are expected to reduce in the March 2009 Quarter as mining from the higher grade zones commences.
Production Outlook
Perseverance ore is being processed at the nearby Greenfields Mill under a milling contract with Higginsville Mining Pty Ltd. The next milling campaign is scheduled for approximately 44 days, to conclude at the end of the March Quarter, and will utilise a blend of both Perseverance and Countess ore.
The increased production for the March 2009 Quarter as a result of increased volumes of ore produced through Perseverance stoping. The mine plan currently developed for the Perseverance deposit forecasts an annual production rate for the Financial Year to June 2009 of approximately 50,000 ounces of gold.
Importantly, Focus has seen steady improvements in the milling process as more knowledge is gained in the metallurgical and chemical properties of the Company's ore. This has been underpinned by an increase in metallurgical recovery rates to 96% due to increasing control of sulphur blends and oxygen levels. Additionally, there has been an increase in mill throughput from 65 tonnes per hour (from the first campaign) to 85 tonnes per hour.Revenue
Revenue for the Quarter was A$11.1million generated from the sale of 10,622 ounces of gold at an average price received of A$1,044/oz.
Countess Deposit - Production Underway
Development of the Countess Deposit has delivered first production ore which was blended with Perseverance ore for the most recent milling campaign. This was subsequent to the Company announcing a Probable Reserve of 28,700 ounces at Countess, which was defined through geological modeling and mining evaluation during the Quarter.
The definition of the gold Reserve at Countess is a milestone achievement for Focus as it is the first gold reserve estimate outside of the Perseverance deposit, providing the Company with a strong pipeline for continued full-scale production.
A Pre-Feasibility Study was undertaken on the Countess Resource in early 2008 which was aimed at determining the economic viability of the new resource and the synergies of potentially mining Countess in conjunction with Perseverance. The Countess Reserve is expected to increase as further drilling is proposed both up and down plunge.
Exploration
Perseverance
During the December 2008 Quarter, further step-out drilling at Perseverance was completed. This drilling targeted depth extensions immediately beneath the current Perseverance mine and the southern extensions of the Perseverance orebody (which had not been closed off). The drilling to test for possible depth extensions was done in time to be included in the reserve update that the Company announced during the Quarter.
The immediate depth potential has now been closed off, however results received from the Reserve update to the south are exciting and indicate the possible presence of another high-grade shoot. Results from this southern area include 5.91m @ 8.14g/t, 7.57m @ 8.26g/t, 1.37m @ 35.47g/t and 2.39m @ 11.15g/t. Additional step out drilling will be done during the March 2009 Quarter to further define this southern area.
Countess
Drilling at the Countess Deposit towards the end of 2008 was undertaken to assess the potential at depth and to the north of the defined Reserve (which the Company released during the December 2008 Quarter). In addition, several in-fill holes were completed up dip of the defined Reserve.
While the three in-fill holes indicate that there is little potential up dip from the Reserve, the step-out drill holes at depth and along strike to the north of the defined reserve however were most encouraging, and indicate that the mineralisation is still open at depth and along strike to the north.
Best results from the step out drilling include 17.21m @ 3.34g/t, 12.42m @ 4.09g/t and 9.04m @ 7.51g/t. Additional step out drilling is planned to be conducted during the June 2009 Quarter
Brilliant
A re-interpretation of the Brilliant Deposit - located 1.5km south east of Coolgardie - during the September 2008 Quarter highlighted a number of potential targets. During the December Quarter a program of Reverse Circulation (RC) drilling was conducted across these targets. Encouraging results have been received from this drilling program and include 23m @ 4.69g/t, 6m @ 6.53g/t, 7m @ 5.64g/t and 11m @ 5.61g/t.
An upgrade of the Inferred Resource commenced at the end of the December 2008 Quarter and is expected to be completed early in the March 2009 Quarter. The updated resource will form the basis for the ongoing Scoping Study to determine the feasibility of bringing this deposit into production in the near future.
The results of the Scoping Study will help direct future drill programs so that the full potential at Brilliant can be realised.
Ground EM Targets
Five of the high priority targets from the extensive ground Electro-Magnetic (EM) survey (conducted during the March 2008 Quarter) over the Redemption corridor and the Tindals Area were also drilled during the December 2008 Quarter.
Three of the holes intersected a number of silicified zones of interest within basalt with results including 1m @ 6.39g/t, 2m @ 4.12g/t and 3m @ 2.91g/t (see table below).
Associated within these zones were varying percentages of pyrrhotite and pyrite (either disseminated or as veinlets) as well as quartz and/or quartz-carbonate veining. The other 2 holes didn't have any significant intercepts; however, one had a zone of strongly altered felsic porphyry with associated carbonate veins and pyrite veinlets, while the other intersected a deeply weathered fault within talc chlorite schists.
Down Hole Electro-Magnetic (DHEM) surveys are to be conducted on all of the holes in the June 2009 Quarter before further drilling of these targets is undertaken.
CORPORATE
Cash and Bullion
As at the end of the December Quarter, the Company had available cash and bullion for a value of approximately A$4.1 million.
About Focus Minerals Ltd
With over 3.8Moz of Mineral Resource, Focus Minerals Limited (ASX:FML) has a highly strategic portfolio of assets across Australia's two leading gold producing districts – the Kalgoorlie/Coolgardie belt and Laverton – and the financial muscle to continue to unlock further potential for growth.
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