Early results bode well for Signature Tania Winter Monday, 6 September 2010
INVESTORS have smiled on Signature Metals today with it shares up 15% after results from an internal scoping study indicated production at the Konongo gold play in Ghana can be lifted to 60,000 ounces for a modest capital cost of $US3-4 million ($A3.3-4.3 million).
Workings at the Konongo gold project in Ghana
Plant throughout would be nearly doubled to 700,000 tonnes per annum from 350,000tpa and is expected to result in up to a 15% reduction in operating costs, based on average head grades of 2-3 grams per tonne.
The expansion of the carbon-in-leach plant would be the first step on the way to Signature transforming the project into a 100,000oz per annum producer, with commissioning expected within six months of plant refurbishment.
The proposed expansion is based on the purchase and installation of a semi-autogenous grinding (SAG) mill to operate in circuit with the existing ball mill.
Additional tanks would be added to the leach circuit to increase capacity while maintaining the same residence time.
The company is now embarking on a prefeasibility study that will include more detailed cost estimates for capital items, further financial modelling and discussions with potential suppliers.
Signature is continuing to study other options to reach its desired production rate, including undertaking aggressive exploration programs to test its exploration target of 1.5-2.5Moz of gold.
With JORC resources of 19.61 million tonnes grading 2.02gpt for a contained 1.27Moz, more than 15,000m of drilling has been completed on the property.
Historically Konongo has produced 1.6Moz at a head grade of 11.8gpt gold.
The company also continues to increase ore supplies available for the restart of operations with up to 500,000t grading at 1.5-5.0gpt estimated from oversize stockpiles, low-grade dumps and tailings, located adjacent to historical workings (non JORC).
Based on metallurgical testwork to date, Signature expects stockpile/dump recoveries to be in the range of 60-90%.
Consultants are also working on resource updates for the Boabedroo, Kwakawkaw and Obenemase deposits, located within the Konongo project area.
As for permitting, the environmental impact study for Konongo is due to be submitted to the Environmental Protection Authority this quarter.
Shares in Signature were up 15% to 2.3c in early afternoon trade.
SBL Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
