A thorough review of mine and mill operational performance identified that while underground sampling protocols are in line with industry standard practice some bias in underground sampling is likely due to the fact that the hornfels (metamorphosed sedimentary host rock) is much harder to break and sample [and breaks to a larger rock size that is difficult to collect in a representative 3 kilogram sample] than the quartz, which is believed to contain most of the gold.It is therefore likely that the grade control sampling is biased towards the higher grade gold-bearing quartz, however the overcall between mine and mill data is still statistically substantial and must be largely attributed to the nuggetty style of the gold deposit.
Octagonal’s strategy to address this issue is focused in several areas of the operation and specifically:
›› Mine development will be kept to a minimum width to reduce dilution and sludge hole drilling will be used to identify adjacent ore zones,
›› Face channel sampling will be compared against truck sampling to determine the best sampling technique for ore block grade estimation,
›› Mining will focus on the 1080 level that is believed to be higher grade and closer to the core of the deposit,
›› Preliminary test work has indicated that by scalping and removing the oversized rock (+40mm) a 50% reduction in tonnes is possible together with a doubling in ore grade. Further scalping test work will be completed to confirm this outcome, and
›› The Company will assess the relative economic potential of mining a larger tonnage and lower grade deposit vs a lower tonnage and higher grade deposit.
Just a reminder also that ORS is not a one trick pony and have other projects to consider for the next 12 months
Maldon Gold Project, Victoria
(Maldon Resources Pty Ltd - 100% owned)
›› Continue development and mining at the Alliance South deposit.
›› Continue processing of underground ore from the Alliance South
deposit at the Porcupine Flat Gold Processing Plant.
Wehla Project, Victoria (Matrix Gold Pty Ltd - 100% owned)
›› Commence Native Title negotiations to secure the grant of mining
licence application MIN5574.
Amherst Project, Victoria
(Highlake Resources Pty Ltd - 100% owned)
›› Resource definition drilling at the Pearl Croydon deposit.
Campbelltown Project, Victoria
(Highlake Resources Pty Ltd - 100% owned)
›› Exploration drilling at the Bosun's Prospect.
Dunolly East, Victoria
(Highlake Resources Pty Ltd - 100% owned)
›› Resource definition drilling at the Specimen Reef Deposit.
I spent about an hour going over the annual report today and I felt it was pretty much about what I expected. I still remain confident in management and believe that ORS still have lots of arrows to shoot. Share price is disappointing as we all know, but at least they are doing something to rectify the issues.
ORS Price at posting:
3.4¢ Sentiment: Hold Disclosure: Held
