Article published by London based journalist .... Minews Story
Date : June 16, 2004
Austminex Awaits Resource Estimate On Part Of The Mount Gold Lease Which Is Crucial To Early Production.
The name Austminex may not ring many bells with investors in London unless they met the feisty chief executive Kate Hobbs when she was on a quick trip with Perth stockbrokers Hartleys last week.. It is small and very Australian, but it has gold and nickel projects in the right places and could be in production in short order. The Mount gold mining lease is just to the south of Coolgardie and Kalgoorlie and less than 30 kms from the well known St Ives operations. Golden Mile is twice as far away and Kundana, Paddington and Kanowna Belle are all in truckable distance. Talks are already in progress about toll treatment of the ore and this, of course, transforms the potential for early production.
The Mount lease is actually on the Widgiemooltha nickel belt and is surrounded by five prospecting licences to give a total area of around 900 hectares which includes the Mount underground mine. Production statistics appear to be scarce, but the underground mining took place down to a depth of 35 metres and around 50,000 tonnes which averaged 8.86 g/t was mined. At least 20 parallel quartz gold lodes have been identified within the lease and they extend into the prospecting licences. Recent diamond drilling indicates that there is still plenty of potential for a high grade underground mine with intercepts such as 2.71 metres at 25.6 g/t gold, 2 metres at 27.8 g/t and 1.51 metres at 21 g/t. The vertical veins can be up to 4 metres thick and are separated by barren basalt.
These short widths indicate the difficulty faced by the Austminex team when dealing with Australian investors who are used to reserves measured by a specified density of drilling to JORC standards. Fine in lower grade deposits where there is consistency of gold deposition, but not so easy with high grade, narrow vein systems as the results can be so variable. In this case the veins demonstrate good vertical continuity to at least 300 metres, where an intercept of 2 metres at 24.47 g/t was made, and extend well to the west of known gold mineralisation. Even so it is very easy for a drill to miss a vein by a margin of a foot or two and the veins themselves may be poddy in composition.
It was exactly the same at the Clogau mine in Wales which produced gold for royal wedding rings. Bulk sampling was the only way to get a handle on grade and this is exactly what Austminex is going to do. First, however, the company is going to release a resource estimate for the central part of the lease within the next three weeks or so. As the area involved is fairly small the resource will be nowhere near the million ounces that seems to be expected in some quarters. It will, however, provide a basis on which the company can start work and there is every chance that bulk sampling will merge into mining either by open pit or underground. Cash flow will then allow the company to fund an exploration programme on the surrounding prospecting licences where the veins continue to the west and are open to the north and south.
The next most advanced project owned by Austminex is the Nepean nickel mine which is 25 kms southwest of Coolgardie and close to a swathe of other nickel deposits. It was mined to a depth of 480 metres between 1970 and 1897 to produce ore averaging 3% nickel and with additionalo gold, cobalt and platinum. When the mine closed a resource of 409,000 tonnes grading 2.39% nickel was said to be still in place and oxide ore, which was untreatable at the time, can now be sent to the Murrin Murrin or Cawse nickel laterite plants. Only four years ago another operator carried out a shallow drilling programme into the oxidised and transitional block of ore left by previous miners and encountered ore grade nickel intercepts which indicated a supergene plume down to 58 metres. This could be extracted by open pit mining and it might be possible to continue the operation into the upper zones of sulphide ore.
At the moment Austminex is concentrating on the Mount, but Nepean will be next up and then there are the various projects around Coolgardie acquired though a private company, Focus Minerals, in April 2003. Together these have inferred resources amounting to around 250,000 ounces of gold. Mungarie, in which Austminex has an 80 per cent interest, is probably the most advanced. It sits on the Mungarie /Zuleika shear which hosts most mines in the Kalgoorlie/Coolgardie region and the lithology and structural setting has much in common with Kundana, Frog’s Leg and Raleigh which have over 3 million ounces of resources just over 20 kms to the north. Again, toll treatment would look a likely option.
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