Re how quickly they could get mining?It depends on which...

Re how quickly they could get mining?
It depends on which project. The less stuff that needs to be done, the shorter the timeframe. There's areas like the existing tailings piles and laterite pit that would appear to need minimal drilling, minimal design and minimal approvals. I can't see why that couldn't be comparatively quick but everything seems to take longer than expected. The biggest likely delay is TG6 internal inertia to actually progressing beyond drilling to mining.

How many ton's per year?
Mining at Van Uden appears dependent on both available capacity at a suitably located toll processor and gold prices remaining at reasonably high levels. Large parts would become uneconomic if prices fell back to US$1,000/oz and I suspect the deposit doesn't have the scale to support an on-site gold mill (or TG6 having the capital resources to build one!!). Personally I think it would be better to mine out Van Uden more quickly than 40t/yr. I was thinking something in the over 100kt of ore per year range. If capacity existed at the toll processor, the higher the better. If the economic cut-off is something like 0.3g/t to 0.5g/t then there's over 5Mt of material to process so a plan at 40kt/yr would take over 100 years to mine out the deposit. At a 0.4g/t cut-off there's already 2.1Mt within Measured and Indicated with few obvious reasons that couldn't be shifted to Proven and Probable with the right mining plan.



There is certainly merit in evaluating the high grade cut-off mining potential because that provides a baseline that should be improved upon by adding additional progressively more mid-grade ore, down to the ore that is break-even. At today's prices you wouldn't mine the deposit for only 2g/t material but if you did the old JORC resource above put the deposit at 943kt @ 3.11g/t for 94,000oz. If you mined the deposit with a 1g/t cut-off the JORC was 2.8Mt @ 1.96g/t for 180k oz. That mining and cut-off should be profitable at a reasonably wide range of gold prices.

Back in 1991 the report below estimated the resource at 1.3Mt tonnes at 2.0g/t. Critically it also supplied a strip ratio for this calculation which was only 5:1. Noting the figures above are much higher volumes, I won't bother to try and adjust for the 0.1Mt that has been mined from Tasman after this report.

What does mining this old 1.3Mt figure with a 5:1 strip ratio look like?
With the strip ratio of 5:1 supplied, there is 7.8Mt of material to remove from the ground (1.3Mt ore, 6.5Mt waste). Other reports note that the top 60m is soft enough rock to be removed via ripping and digging (so no limited to no drill and blast). If this was done at $5/t then all the material is removed from pits for $39m.

I'd posted of a company doing toll processing at $50/t a few years ago. There's also transportation costs and inflation since then. Assuming the all-up costs after leaving site are $100/t processed (which I'd hope would be less), there's $130m of off-site costs in processing this ore.

If 1.3Mt at 2g/t were processed its 2.6M grams (at 100% recovery rates). Assuming 90% recovery (one of the remaining wild-card's) that's 2,340,000g. Dividing by 31.1 gives 75.2k oz. The current gold price is just over A$5,200/oz so this would be A$391m in revenue. Having covered direct mining and processing costs, its economics is $391m less $39m less $130m for $222m of net profit before tax and unaccounted costs like site management. TG6 owns 80% of the project, Barto owns 20%.

Redoing these with a larger or base and lower cut-off grades (but still economic ore) would improve the overall totals. There's a large gap between these back-of-hand project economics and TG6's MC!!.