Mt Freda was a high grade Gold producer with high metallurgical recoveries. Only stopped in late 80’s when Gold got to $300 ounce. Had a great CIP plant. The Golden Mile next to it is a series of high grade Gold reefs all running parallel. Average grade from production was i read 45g/t average grade. Gold mining stopped when WW2 started. I spoke to my mate, an experienced Aussie Geologist who also really loves jnr gold plays, basically what he said was from what the company has reported so far, Ausmex has only drilled shallow holes (from announcements-50m vertical) into Golden Mile to access a high grade Gold with easy access mining with small strip ratio to get quick cashflow and at super low costs which is quite smart, most keep drilling to prove up as much as possible but then large scale drilling deeper to end up with a big resource, no money and need a monster process plant. But did say, because the grades were so high in drilling assays, it’s unfortunate the JORC restricts the high gold grades being used in the JORC resource calculations.
The geo doing the JORC will make a decision based on what the computer says, so all the high grades over 3 or 5g/t Gold may not be able to be used because it may be considered just nugget Gold effect and not widespread. So he said the geologist will assume a high and low cutoff gold grade when calculating the JORC. Usually the low cutoff in Gold for open cut is 0.5%g/t and in the case of the high Cutoff could be between 3 and 5g/t. So all the +3 or 5g/t Gold assays can’t be used. He did say in the case of Golden Mile and the historical grade mined and resource grades at above 45g/t the company that will mine it will take it into account and allow for higher grades to be mined at the process plant and cyanide consumption and dosing will be increased to handle the expected higher grades. He did also said, most importantly, that he hopes the Round Oak Minerals process plant that will treat Golden Mile ore has a gravity circuit to trap the coarse gold fractions. if they don’t have one already. Ausmex directors should install their own into the circuit.
As for Mt Freda he said that’s a proven high grade open cut Gold mine, super high historical grades with proven high grade metallurgy recoveries, with a pit already to 60m depth but did say he would prefer to see an underground operation which is cheaper and doesn’t require all the big rolling equipment on surface and doesn’t require waste dumps etc. just mine it underground and send for processing. He said the strip ratio would be high if open cut , to start if they had to strip back the 60m high walls to access the ore. This would require a lot of upfront capital whereas sinking a shaft or decline is way lower in costs. He gave both Mt Freda and Golden Mile a big thumbs up. Be interesting to see if the Ausmex directors or their mining engineers are thinking the same.
Cheers Boys! BB
AMG Price at posting:
3.5¢ Sentiment: Buy Disclosure: Held
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