batavia to accelerate deflector feasiblity announc

BATAVIA TO ACCELERATE DEFLECTOR FEASIBILITY
FOLLOWING POSITIVE SCOPING STUDY
Highlights
Batavia’s Managing Director, Mr Greg Durack, said that following completion of
the Scoping Study on schedule, the Company had set an aggressive target of
completing the Bankable Feasibility Study by August 2006.
“We have already commissioned preliminary work for the Bankable Feasibility
Study and we will now fast-track the study with definitive metallurgical test work
on Deflector ore already underway,” Mr Durack said. “In addition, we have
recently commenced the resource in-fill and extension drilling program at
Deflector, which is targeting a further significant increase in the Deflector
resource inventory from 775,000 gold equivalent ounces to 1 million gold
equivalent ounces.”
“Our objective is to advance the project towards production as rapidly as
possible, in order to take advantage of the current strong commodity price
environment, in conjunction with ongoing exploration to further increase the
resource base and enhance the overall project parameters.”
The process and infrastructure component of the Deflector Scoping Study was
completed by Metplant Engineering Pty Ltd, and the Mining Study was completed
by Snowden Mining Industry Consultants.
PROCESS AND INFRASTRUCTURE SCOPING STUDY
Batavia engaged Metplant Engineering Services Pty Ltd (Metplant) to undertake a
scoping study to review the establishment of a gold/copper processing facility at
the Gullewa site. The scoping study has identified the operating costs and level of
capital expenditure required to install a suitable flotation and ancillary circuit to
the existing processing plant at Gullewa.
Where practicable, the Scoping Study was based on utilization of existing
equipment, in conjunction with a value-added engineering approach to ensure
that the plant will be basic, yet robust and technically suited to the required
purpose.
The study also reviewed recent and previous metallurgical test work in order to
develop a suitable treatment flow sheet. The proposed flow sheet will incorporate
crushing, grinding, flotation, concentrate dewatering and the production of gold
bullion. The proposed treatment plant is designed to treat either oxide,
transitional or primary sulphide ore types – covering all three types of
mineralisation within the Deflector deposit.
Enquiries:
Greg Durack
Batavia Mining Ltd
+ 61 (0)8 9327 0980
Damian Delaney
Batavia Mining Ltd
+ 61 (0)8 9327 0980
Jan Hope & Partners + 61 (0)8 9388 1474
www.bataviamining.com.au
The capital cost for the processing facility and associated infrastructure is
estimated at A $13.8 M. This cost has been prepared to an accuracy of plus or
minus thirty (30) percent. An overall ten percent (10%) contingency is included
in this estimate.
The estimated operating costs for the Gullewa concentrator, including
administration, is A$48.81 per tonne of ore processed for oxide and transitional
material and A$37.53 per tonne of ore for primary material. This is based on mill
throughout of 250 000 tonnes per annum. The higher unit operating costs for the
oxide and transitional material is due to the use of a new copper specific
chelating agent in the flotation process.
MINING STUDY
Batavia engaged Snowden Mining Industry Consultants Pty Ltd (Snowden) to
complete a scoping study for mining of the Deflector deposit, including :
�� a review of previous mining studies
�� an open pit optimization and designs using inputs supplied by Batavia and
Snowden
�� underground development and stope designs below the base of the open
pit
�� a mine schedule incorporating open pit and underground mining
�� an estimate of open pit capital and operating costs, derived by Snowden
from similar operations in Western Australia
�� an estimate of underground capital and operating costs derived from the
2004 feasibility study and escalated to reflect increases in mining costs
and
�� a basic cash flow model using revenues, recoveries and processing and
TC/RC costs provided by Batavia
The open pit design reflects the changes in the metallurgical methods with
related changes in costs and recoveries (higher processing costs and lower
recoveries especially copper for the oxide and transitional material), while the
mining cost has also been increased by 20% to reflect the current high demand
for mining equipment and services. In general, higher costs are effectively off set
by higher metal prices.
The staged open pit design completed in the study contains 337,000 t at 5.73 g/t
Au and 2.10% Cu at an overall strip ratio of 24.6:1
The open pit provides just over 12 to 18 months of ore supply to the processing
plant. Approximately 3 months of pre-strip will be necessary to access a suitable
ore flow. The secondary pit in the Central Lode is a convenient location for the
underground portal that can be established early in the life of the project and
provide a relatively secure position to commence underground development.
While the reefs are relatively narrow, small scale equipment and 2m high
benches will ensure optimum extraction with minimal dilution and ore loss. The
mining methods assumed 20% dilution and 2.5% ore loss modifying factors.
For underground mining, the 2004 BFS identified that the deeper portions of the
Deflector ore body between 200 mRL and 110 mRL could be mined from
underground using a mechanized uphole benching method, mining in a “topdown”
direction. Small pillars would be left to maintain local and regional
stability; no backfill would be used.
The uphole benching stoping method proposed in the 2004 BFS featured a
minimum mining width of 1.5m and identified a potential mining inventory of
181,000 t at 4.92 g/t Au and 1.17% Cu.
Significant drilling at depth has extended the resource model and mine plan
200m deeper to -80 mRL. Snowden’s mine plan identified a potential mining
inventory between the base of a crown pillar (nominally 220 mRL) and -80 mRL
of 1.06 Mt at 6.5 g/t Au and 1.1% Cu.
Below 140 mRL (which includes material at higher than average Au grades) the
resource is classified as Inferred. As such, the mine plan prepared for this deeper
region is regarded “high risk” in terms of mineable tonnes and grade.
Snowden’s mine plan is similar to that proposed in the 2004 BFS with the major
differences being the increased depth and a change in cross-cut position to
access the centre of each lode, rather than the ends. Underground labour and
consumables costs were escalated 15% from the 2004 BFS (estimated in late
2004).
The overall life of the mining operation is approximately 5 ½ years.
The open pit mine will produce approximately 25,000 to 30,000 tonnes per
month for 12 months, and then 15,000 to 20,000 tonnes per month for the final
eight months, as the underground mine is commissioned and brought into
production.
The portal position is located in the northern end of the Central Lode and reached
after six months of open pit mining. Due to the close proximity of the portal to
the first stope blocks, underground production commences after 3 months and
reaches full production of 20,000 to 25,000 tonnes per month after 12 months.
There is a six month period with ore sourced from both the open pit and
underground mines.
The decline priority is to access the deeper, higher grade ore below 60 mRL,
which will be reached after approximately 24 months. Over the life of the mine
the open pit produces 15,000 tonnes of concentrate containing 48,200 ozs Au
and 3,900 tonnes Cu. The underground mine produces 63,400 tonnes of
concentrate containing 193,600 ozs Au and 10,200 tonnes Cu.
RESOURCE INFILL AND EXTENSIONAL DRILLING
The Company commenced a major new drilling program on the Deflector Gold-
Copper Project in mid-March 2006 comprising both in-fill and resource
extensional drilling.
A significant part of the mineral resource is in the Inferred category, which was
included in the current Mining Study. The objective of the new drilling is to in-fill
upper portion of the Inferred section in the West lode to bring into the Indicated
resource category to increase the level of confidence.
In addition to the in-fill drilling, resource extensional drilling is currently in
progress to test depth extensions on both West and Central lodes. The objective
is to increase the Mineral Resource to 1,000,000 Au Eq ozs.
Batavia is aiming to complete this drilling program by the end of May 2006, to be
followed by resource modelling.
BANKABLE FEASIBILITY STUDY
Following the positive outcome of the Scoping Study, Batavia has now
commissioned preliminary work for the Bankable Feasibility Study on the
Deflector Deposit, which it intends to fast track.
Definitive metallurgical test work has recently commenced at Independent
Metallurgical Laboratories on all three Deflector ore types, comprising both
variability and closed cycle tests in order to satisfy design requirements.
Metplant Engineering Services has been commissioned to complete the Process
and Infrastructure component, and is also involved in supervising the
metallurgical test work program.
Planning discussions have also commenced with Snowden in order to complete
the resource modelling, once the current drilling program is finished, and then to
complete the final Mining Study for the Bankable Feasibility Study.
The Company has set an aggressive schedule, targeting completion of the
Bankable Feasibility Study in August 2006. The Bankable Feasibility Study is
being undertaken to complete further studies and drilling and do a sensitivity
analysis to verify all the outcomes and assumptions identified during the Scoping
Study. A development decision on the Deflector Gold-Copper Project will be
made dependent upon the outcome of the Bankable Feasibility Study.
Greg Durack
Managing Director
3 April 2006

wrxsti