Aragon Resources Limited (ASX:AAG) Received Positive Underground Mine Study Results For Central Murchison Gold Project
Perth, Dec 23, 2010 AEST (ABN Newswire) - Aragon Resources Limited (
ASX:AAG) ('Aragon') is pleased to announce it has completed a preliminary assessment of the commercial viability of its underground mine projects within the Central Murchison Gold Project. Underground mining studies on the Big Bell deposit and the combined Golden Crown, Great Fingall deposits (collectively referred to as "Golden Fingall" for simplicity) have concluded that a positive development scenario exists.
The underground mining studies constrained to well defined components of the overall underground resources have determined Probable Mining Reserve estimates.
Mine Study Results
Big Bell Underground Mine
- The underground mining studies at Big Bell have been completed by Berrimil Services Pty Ltd and Mr. John Player (Senior Research Fellow - Geotechnical Engineering, West Australian School of Mines). Both consultants have extensive and direct operating experience at the Big Bell mining operation.
- Mining only operating costs are estimated to be A$56/tonne of ore mined or A$465 per ounce for ore delivered to a surface stockpile at the mine.
- Pre-production capital and re-establishment costs are estimated to be A$20.1 million. This includes approximately A$9.7M for refurbishment and re-establishment of the mine, portal, decline and mine services. A further A$10.4M is estimated for replacement mine fixed plant, services equipment and reticulation.
- Sustaining Capital Development costs for the initial 2.895 Million tonnes of probable reserve are estimated at A$33.8M equating to an additional cost of A$11.70/t or A$96 per ounce.
Golden Fingall Underground Mine
- The underground mining studies at Golden Fingall have been completed by Mining Plus. Aragon believes there is potential to significantly customise and improve on their outputs.
- Mining only operating costs are estimated to be A$61.5/tonne of ore or A$241 per ounce for ore delivered to a surface stockpile at the mine.
- Pre-production capital and re-establishment costs are estimated at A$32.7 million. This includes approximately A$12.5M for fixed plant and equipment (including dewatering) and A$20.2m for a new decline to access ore production.
- Sustaining Capital Development costs for the initial 878,000 tonnes of probable reserve are estimated at A$26.3M equating to an additional cost of A$30/t or A$117 per ounce.
Significance of the Underground Mine Studies
The study shows that Big Bell underground mine can become the backbone feedstock for a processing facility at the Central Murchison Project producing at approximately 500,000 tonnes per annum after an initial 18 month pre-production period. The study also shows the Golden Fingall mine to be in a position after a 2 year establishment period to produce high-grade ore at a rate of approximately 200,000 tonnes per annum.
On a combined basis both underground mines can provide a feed of 700,000 tonnes per annum to a surface stockpile at the mines for an average cost of approximately A$400/oz.
This also allows for an annual recoverable gold production of approximately 100,000oz per annum for an initial 6 year life with plenty of scope to extend.
This provides Aragon with a solid foundation on which to build a mining project. Aragon will soon complete its open pit studies which should add to the overall project especially in the early years whilst underground ore production is established.
Having now established a cost and production capability assessment from its underground mining projects, Aragon will now move to complete ore processing cost, design and operating parameters as the next step in the completion of a definitive study on the development of the Central Murchison Gold Project.
Background & More Detail
Big Bell Underground
Aragon has completed a resource estimation at the Big Bell deposit for use in the mine scoping study.
The mining study considers the indicated material using a cutoff grade of 2.5g/t and is focused only on the section between 500mRL and 825mRL which contains 4,000,000 tonnes @ 4.8g/t Au containing 623,900 ounces or 83% of the total resource.
Using a stoping dilution at 20% @ 1.65g/t Au and a stope recovery of 85% mining studies estimated an extraction of 63% of this resource from development and stoping (2.895 million tonnes at 4.2g/t Au for 390,000 ounces).
An independent geotechnical scoping study has confirmed the viability of the selective longitudinal sub level caving mining method used in this analysis. This mining method is designed to maintain mining efficiency and maximize recovered grade and differs from previous methods where a bulk low grade caving option was used. Underground mine costing has been completed using detailed stope and development designs with typical industry contract mining rates applied.
The development of resources below an interpreted pegmatite intrusion is not included in the intial study or mining reserve estimate. Ore in this area is expected to add significantly to the life of the mining operation. Planned drilling for 2011 will target this area of the resource model to more accurately define the limits of the interpreted pegmatite and more accurately define ore limits and grades in this area potentially add significant resources to be included into future studies.
Golden Fingall Underground
The results of the desktop mining study completed by Mining Plus are based on a single access decline that provides for development of the Golden Crown and Great Fingall resources as a single production source. High-grade production from the Golden Fingall underground operation is planned to complement the base lode production sourced from the Big Bell underground mine.
The scoping study considers the Golden Crown resource below the 550rl and the Great Fingall resource below the 800rl and applies a longhole open stoping in a top down sequence method.
The study focussed on an un-mined section of the overall resources at Great Fingall and Golden Crown.
No remnant resources have been included in this initial study. These remnants account for 189,000 ounces and provide considerable upside in future studies.
The mining study considers the indicated material outside areas of previous mining which contains 1,048,000 tonnes @ 10.2g/t Au for 343,000 ounces of the total combined resource. Using a stoping dilution at 10% at zero grade and a stope recovery of 80% mining studies estimated an extraction of 65% of this resource or 878,000 tonnes @ 7.95g/t Au (224,000 ounces) from development and stoping.
Resource development drilling into 2011 will focus on those areas required for input into feasibility studies and to increase the resources and reserves.
Planning is well underway to continue exploration for new gold discoveries across the CMGP and to conduct resource development drilling in 2011 in the knowledge that the ore systems remain open and further expansion of the combined resource is likely.
Aragon believes that significant potential to improve the outcomes of the Mining Plus study exists with consideration to use of existing open pits to rapidly advance vertical development, the use of existing underground infrastructure/development and with consideration of different mining methods and development designs.
For the complete Aragon announcement including tables and maps, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/64894-ASX-AAG-522237.pdf
About Aragon Resources Limited
Aragon Resources Limited (ASX:AAG) is an Australia-based gold, nickel and phosphate exploration company. The principal activity of the Company is the exploration of minerals. Aragon has exploration tenements in Western Australia and the Northern Territory.
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