* Gold resources increased to 2.05 million ounces (30.4 MT @ 2.1 g/t) * Chirano ore reserves to be published in mid December, following completion of Bankable Feasibility Study ("BFS")
* Metallurgical testwork completed confirming amenability of Chirano ore to treatment using conventional carbon-in-leach flowsheet
* Recoveries of 95% achieved from oxide material, 91% from primary material and 35-40% by gravity separation
* BFS geotechnical study confirms no structures affecting pit wall stability with average pit wall angles of 58 degrees in primary zone
RESOURCE INVENTORY UPGRADE
Based on results of the 13,633m drilling program at the Chirano Gold Project, completed as part of the Bankable Feasibility Study ("BFS") during the period May-October 2002, consultants RSG Global Pty Ltd ("RSG") has estimated a new Measured, indicated and Inferred Resource of 30.4MT grading 2.1g/t for 2,051,000 ounces. This represents a 10% increase in the Resources announced in May 2002.
Notes: 1. The reported resources are based on a 1 g/t cut off and an emulation of 5m x 5m x 5m size blocks
2. The tonnage has been rounded to the nearest 10,000
3. All grades have been rounded to the nearest one decimal place
4. All ounces have been rounded to the nearest 1000
RSG has subdivided the resource into oxide, transitional and primary (fresh or sulphide) with 89% of the resource ounces classified as primary.
Using a cutoff of 0.8g/t the resources total 37,750,000 tonnes grading 1.9g/t for 2,262,000 ounces. Using a 1.2g/t cutoff the resources total 24,480,000 tonnes grading 2.3g/t for 1,840,000 ounces. Ore reserves for Chirano will be published in mid December 2002.
METALLURGICAL AND COMMINUTION TESTWORK
Comprehensive metallurgical testwork undertaken as part of the Chirano BFS has also been completed confirming the amenability of Chirano ores to a conventional carbon in leach flowsheet. Testwork was carried out by Ammtec Limited under the direction of engineering consultant Lycopodium Pty Ltd.
Gold recovery achieved was 95% for oxide ores and 91% for primary and transitional ore with typical 35-40% recovery by simple gravity separation. Taking into consideration power and capital costs the primary ore recovery was optimised on a relatively coarse grind of a nominal 106 micron. The reduced grinding requirement will impact positively on project capital costs.
Bond ball mill work indexes for the primary ore are regarded as moderate in the range of 12 to 18kwh/t with the project design based on 15.9kwh/t. Oxide ore is considerably softer ranging from 3 to 9kwh/t. Lycopodium has advised that the SAG and ball mills hold under option by Red Back (refer ASX announcement 17 October 2002) are suitable for milling of Chirano ore.
Testwork has also confirmed that the ore exhibits low reagent consumptions with a total cyanide consumption of 0.5kg/t and lime 0.19kg/t.
These results are considered excellent and confirm results obtained from the earlier testwork.
GEOTECHNICAL TESTWORK
BFP Consultants Pty Ltd ("BFP") has completed an assessment of geotechnical aspects of the proposed Chirano open pit mine development based on the recently completed BFS diamond drilling.
BFP conclude that Chirano rocks are generally strong and of good quality and that the geotechnical features appear consistent throughout the area examined. No major structures detrimental to overall pit wall stability were observed.
BFP recommends 70 degree open pit wall batter angles in primary rock with 45 degree lay backs in weathered material. Berms should be 5m wide and spaced 20m apart. This translates to an overall pit wall slope angle of 58 degrees in fresh rock and 40 degrees in the weathered profile.
Application of the steep BFP parameters to the pit designs will minimise strip ratios and maximise the economic recovery of gold from the pits.
R Ashton MANAGING DIRECTOR
FOOTNOTE:
The resource estimate for the Chirano Project has been categorised based on the September 1999 edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (The JORC Code). The resource estimation study has been carried out jointly by Brett Gossage, Manager of Resources at RSG Global, and James Ridley, a Senior Geologist with RSG Global, who are both Corporate Members of the Australian Institution of Mining and Metallurgy, and are defined as "Competent Persons", as detailed in the JORC Code. Mr Gossage and Mr Ridley consent to the inclusion in this report of the resource data in the form in which it appears
