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COYOTE GOLD PROJECT – OPERATIONS UPDATE
The Coyote Gold Project underground development is progressing well towards the mining of high grade stope ore by mid year aimed at achieving a minimum annualised production rate of 50,000 ounces of gold. Although delays in the development of the decline occurred during the March 2008 quarter due to wet weather and mining equipment availability, the decline advance rate is steadily improving.
Following completion of the Coyote open pit, the bottom of which revealed continuous high grade veins, and commencement of the decline at the bottom of the Coyote pit, the March and June 2008 quarters were scheduled as a period of underground development with limited production from the treatment of low grade stockpiles and lower grade Bald Hill ore. The short life Bald Hill open pits, which are located 40 kilometres north of and in a different geological setting to Coyote, were scheduled to provide supplemental ore feed to the mill during the ramp up period of the high grade underground mine.
Since commencing mining of the Bald Hill open pits during the March quarter, the ore grades achieved from the early stages of mining have been lower than was expected from the ore reserve estimates and initial grade control drilling. The lower grade is the result of an unexpected vein orientation evidenced in the pits that was not recognised in the initial ore reserve estimation and as such, a decision has been made to reduce the size of the Bald Hill open pits and concentrate on progressing the development of the high grade Coyote Underground Mine.
Additional underground diamond core drilling is planned to be undertaken at Coyote with the objective of increasing the number of working faces underground, aimed at producing more tonnes of high grade underground ore.