Excalibur Mining Brings News Of Its High Grade Gold Projects At Tennant Creek To London.
By Charles Wyatt / www.minesite.com
It seems very appropriate that Excalibur Mining, the ASX listed junior with projects around Tennant Creek in the Northern Territory, should be making its first trip to Mines & Money, as one of its directors, and a big shareholder, is Andrew Kent. Kent was once a stockbroker in London and now controls Aspermont UK which runs the show. The chairman of Excalibur is Alex Bajada, also an erstwhile stockbroker, and the level of enthusiasm that he exudes for the company and its assets overcomes all thoughts that its projects are old ones that are being revived on the back of a higher gold price.
Tennant Creek had its best days back in the 1970s when annual production from the region topped 900,000 ounces and it was the third biggest in Australia. It is a good place to operate, as the Stuart Highway runs from Alice Springs 500 kilometres to the south and then on to Darwin, as does the railway line. Every bit of infrastructure is in place, and Excalibur’s tenements are within 10 kilometres of the town itself.
So what makes Excalibur’s projects stand apart from the rest? There is a lot of a resurgence of gold mining interest in the area, not least because it is famed for high grade mineralization? Peko was the last operator at the Juno project in the Tennant Creek area, an operation which produced 800,000 ounces from 450,000 tonnes of ore grading an average of 56 grammes per tone. Now, that really is high grade and one intersection was recorded during drilling of 32 metres at 670 grammes per tonen, including 1.5 metres at 12,883 grammes per tonne. But even that was not enough to keep the mine in profit, as the gold price was on the floor at the time.
Juno was also an underground mine and there were problems with the softer oxidised rock between the workings and the surface, which added to safety problems. It is this oxidised rock which is key to the future of Juno as the existing resource was remodelled in 2008 to give 1.1 million tonnes grading 18.68 grammes per tonne gold in the indicated category and 501,000 at 10.68 grammes per tonne inferred to give a total of 833,828 ounces of gold plus significant copper. The resource up-dip of Juno has yet to be measured, but that is in progress at the moment and should be announced early next year.
Open pit mining is clearly the answer to this and it will transform the economics of the Juno project. A scoping study has identified that it should produce around 100,000 ounces of gold a year over seven years at operating costs of between A$260 and A$325 per ounce with a capex requirement of A$35 million. So, cheap as chips and likely to be very profitable. What’s more, the mine life should be extended significantly, as the mineralization is open above the current resource and to the east, i.e. up dip and along strike.
The Juno open pit will also provide access by a decline to an area of Tennant Creek called M10 project, and M10 could be a company maker in its own right. It was discovered by Peko about 100 metres down plunge from Juno, at a depth of over 400 metres. Intersections to date include 13.4 metres at 28.4 grammes per tonne gold. The current resource is 1.1 million tonnes at 6.79 grammes per tonne gold for 235,971 ounces, but there will be plenty more to come as it is open to the east and west as well as down dip.
Excalibur’s other main asset at Tennant Creek is the delightfully named Nobles Nob, which is only five kilometres away from Juno. It was discovered by Jack Noble back in 1934, and when it stopped production in 1965 it had produced nearly two million ounces, initially from a high grade underground mine and later from an open pit after a crown pillar collapsed. The ore was treated onsite, unlike at Juno where it was transported to the Peko plant. These operations left plenty of tailings with a grade of at least one gramme per tonne gold, and it is early cash flow from these, once a cyanidation plant has been installed, which will help to minimise the funding requirements during the pre-strip period at Juno.
Back in August the company raised A$10 million, so managing director Tim Lagdon has been able to draw up a road map of priorities for 2010. So far the shallows at Nobles Nob have been defined and a certain amount of testwork has taken place on the tailings. All the old data from both projects has been reviewed and a start made to the environmental process. During the first quarter of next year drilling of the shallow oxides and the Juno extension will be completed and a start made to infill drilling at Juno and resource finalisation.
Most important engineering design will commence in that quarter, as will a feasibility study, and both of these will be finished by the end of the year. It is a reflection of Tim Lagdon’s confidence in the progress of the combined projects that he has given such a commitment, as it will all crystallise into a decision to commit to development of a mine before the year end.
There is a logic to the progression from mining the tailings and shallows around Noble’s Nob to the mineralization up-dip and around Juno itself. Mining will then move to M10 and by that time there will surely be other targets which will undergo feasibility on the basis that a central plant has already been installed. Excalibur already has a team in place to take the projects through to production and with Andrew Bajada as the hyper-enthusiastic chairman there is no doubt of a lively newsflow. This is a straightforward gold company moving from exploration to development which will be worth watching.
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