Cannon partners agree to start mining
PERTH (miningweekly.com) – ASX-listed Southern Gold and joint venture (JV) partner Metals X have agreed on a budget and mine schedule for the Stage 1 openpit operation at the Cannon gold mine, in Western Australia.
Under a deal agreed upon in November last year, Metals X would provide A$895 000 to start production from Cannon, and would also act as project operator.
Ore from the Cannon mine would be processed at Metals X’s Jubilee mill, which formed part of its South Kalgoorlie operations.
The Stage 1 openpit operation was expected to mine some 152 000 t of ore at a fully diluted run-of-mine grade of 3.1 g/t gold, containing some 15 000 oz of gold, with 13 500 oz of gold recovered, at a C1 operating cost of A$1 053/oz.
The mine development had been fully permitted, and contractors could be mobilised after a mine contract was awarded for the eight-month mine schedule.
With the budget and timeframe of the Stage 1 operation approved by the JV parties, Metals X would proceed with the formal selection of a mining contractor. Mining was expected to start within the next four to six weeks, and first gold pour was expected by December.
The JV partners would distribute profits from the mine on a 50:50 basis.
With the Stage 1 openpit operation proceeding, Southern Gold said on Tuesday that the company would begin assessing the next stage underground operations.
The underground prefeasibility study had already been completed and concluded that the operation was viable at current gold prices.
The study projected that the underground mine could start about 12 months after the start of openpit mining, with the combined stage 1 and 2 operations expected to extract 484 000 t of ore, grading 4.4 g/t gold for 68 200 oz of gold.
Southern Gold said that the company would conduct additional studies with the assistance of Metals X, on the potential development of the underground mine.
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