article from miningnews

Batavia BFS in three months

Michael Vaughan
Friday, 1 September 2006

AFTER updating the resource estimate for its Deflector copper-gold deposit at Gullewa in Western Australia, Batavia Mining expects to complete the project's bankable feasibility study by early December and bring the project into production before the end of 2007

In April, the company set itself the "aggressive" target of completing the BFS by August but this schedule has slipped due to an expanded resource drilling program and slow assay turnaround.

Based on the results of an infill and extensional resource drilling program started in March, Snowden's has updated the Deflector resource for Batavia as part of the BFS.

The company was aiming to increase the resource to 1 million ounces of gold equivalent but instead the resource only increased by 5000oz gold equivalent from the last calculation in January to 775,000oz.

Contained gold rose from 515,000oz to 567,000oz and copper fell from 32,595 tonnes to 25,540t.

Batavia managing director Greg Durack told MiningNews.net today that as drilling reached greater depths, copper grades tended to fall, as gold grades increased.

"We're talking about below 300m depth so the decrease in copper grades weren't in the measured and indicated sections, we've got a very robust model down to 210m depth with measured and indicated," Durack said.

"The major drop off was in the lower portions of the inferred [resource] but the gold grades did increase."

A scoping study completed in early April targeting a 250,000 tonne per annum project estimated the capital cost at $A15.3 million. Batavia has about $8.5 million in the bank and is in discussions with both banks and potential offtake partners regarding the bulk of the project finance.

Durack said the company has already fielded project finance offers from offtake suitors and hopes to tie up an offtake deal in the next couple of months.

He said at this stage the company has not decided upon its preferred financing structure.

The capital cost will cover the refurbishment of the existing crushing and milling circuit at Gullewa plus the addition of a concentrator at the back end of the circuit.

The scoping study indicated the project would produce 37,000oz of gold and 2200t of copper (55,600oz gold equivalent) over its six-and-a-half-year mine life and Durack said despite the grade alterations in the resource he expected the BFS to indicate a similar project output.

Cash costs have been forecast at $450 per ounce of gold with copper credits.

"What we're doing with the project is producing a copper concentrate," Durack said.

"We'll actually produce a bit of gold bullion through gravity and the rest of the gold gets recovered into the copper concentrate."

Shares in Batavia were off 0.2c (4%) at 4.8c during morning trade