NORTHERN Territory gold miner Giants Reef Mining has warned of lower production and decreased operating margins following a geological assessment of drilling which has confirmed a significant change in the tenor and gold mineralisation at the Chariot gold project.
Infill drilling revealed that there were marked changes in the nature of the orebody below the 8 Level. The drilling has suggested the dip moderates and is of a lower grade than both above the 8 Level and as estimated in the pre-mining calculations at 13 grams per tonne gold.
The new understanding means the orebody requires a bulk mining approach in contrast to the long-hole stoping method which had previously brought the company success.
The company said that in many areas below the 8 Level the waste rock was not thick enough to sustain stable wall pillars. The bulk mining method will increase dilution and lower overall mined grades.
Giants Reef said Chariot still had upside and was open to the west below 12 Level. Drilling to test for extensions to the west of the 12 to 15 Levels is now in progress.
The current infill and extension drilling is due to wrap up next month with the resources and reserves to be re-estimated for inclusion in the June quarter report.
It was not clear what the new production forecast was. The warning follows operational difficulties at Chariot in the March quarter which saw output for that period revised down by 3000 ounces to 14,000oz. At that time Giants Reef said production for the June quarter would be 18,000-20,000oz.
Shares in the miner plummeted over 26% this morning, dropping to 4.4c.
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Mining at Giants Reef's Tennant Creek operations in the Northern Territory
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