Source: www.miningnews.netCoyote's problems behind it: Tanami...

Source: www.miningnews.net

Coyote's problems behind it: Tanami

Colin Jacoby
Wednesday, 2 May 2007

TANAMI Gold is back on the wagon after mining operations were halted for three months at its flagship Coyote gold project in Western Australia due to delayed construction and commissioning of the treatment plant.

In its March quarterly report, Tanami said openpit mining had restarted at Coyote in late April. In addition, fresh drilling intersected visible gold in several veins in its first hole at the Muttley prospect, with assay results pending.

Tanami also said its treatment plant had been modified and was operating continuously with plus-90% gold recovery achieved during the quarter.

"Following the termination of the services of Bemex Corporation as announced December 21, 2006, very good progress has been made in rectifying the design and construction problems associated with the treatment plant," Tanami said.

"Processing of low-grade stockpiled ore recommenced on a reduced throughput rate from January 18, 2007."

After a review of operations, including its underground resources and reserves and planned mining method by mining consultants AMC Consultants, the company decided to alter the underground mining method for the Stage 1 mine plan from long hole stoping to cut and fill because it was considered a low risk option.

Stage 1 will now cover the next three years of the project with a base case production level of approximately 50,000oz per annum with the possibility of increasing the production level as more resources are converted to reserves and additional resources and reserves are delineated.

Tanami said it would continue the treatment of low-grade stockpiles until higher grade openpit ore was available within the next few weeks following the restart of mining operations.

"Although the Coyote gold project has had a number of start-up difficulties, the board considers that the project still holds significant potential to develop into a profitable and expanding operation, which can fund further exploration at and around Coyote together with exploration of the company's extensive exploration portfolio located in the Tanami-Arunta province in Central Australia," Tanami said.

A diamond drill program was currently underway including infill holes into the high-grade Muttley Lode at Coyote and to test for along strike and down plunge extensions.

Following review of its resources and reserves, further drilling was recommended to be completed into Muttley to increase confidence in continuity and extent of the high-grade lode.

At its landholdings in the Tanami-Arunta province, Tanami said no field work was undertaken during the wet season; however RAB/AC drilling programs were planned for the second half of the year at several highly prospective walk-up drill targets.

The company remains debt-free and has no gold hedging in place.

Shares in Tanami closed the day unchanged at 16c yesterday.


End.

Cheers, Pie