Name of the Project
Coolgardie gold project.

Location
The Coolgardie gold project is located 4 km south of the Coolgardie township and lies within Coolgardie Shire, in the goldfields region of Western Australia

Client
Primary Gold.

Project Description
A prefeasibility study (PFS) has confirmed the viability of a low capital cost start-up gold mining operation based on the extraction of shallow reserves across three initial starter pits at the project, with the ore to be treated using a toll-treatment arrangement at a nearby processing facility. The company is at an advanced stage in its negotiations with the owner of the processing facility.

Site setup, infrastructure, offices, roads and mobilisation will be catered for in the mining services contract tender rates. There are established offices and ablutions quarters from previous operations on the premises.

The PFS has been based on the initial starter pits of MacPhersons, A-Cap and Tycho, which contain about 69 000 oz of gold – 13 000 oz in the measured category grading 1.5 g/t of gold, 45 000 oz in the indicated category grading 1.7 g/t of gold and 11 000 oz in the inferred category at 1.7 g/t of gold. The bulk of the mineral resources (about 145 000 oz) is contained within the MacPhersons deposit, which is Primary Gold’s key deposit at the project. Bakers and Franks prospects are not included in the current PFS now, but Bakers is undergoing optimisation and pit design.

The project is forecast to recover about 65 000 oz of gold over an initial mine life of 28 months, with further resources on Primary’s mining leases undergoing feasibility.

Pit designs assume openpit mining using two 100 t excavators for the top half of the pits to remove the bulk of overburden, after which one excavator will be used for the lower half of the pit and where ore is intersected. As the study progressed, it became obvious there would be several potential underground operations started from these pits; hence, future opportune positions were built into the design.

Mining dilution is factored at 10% for all pits and mining recovery at 90% for all the prospects. A minimum mining width of 2 m has been adopted, however, visual definition of the ore zone will be used during the mining phase by the pit geologist to further minimise dilution as observed during the process of mining. These parameters are considered appropriate for the types of mineralisation observed at Coolgardie.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated net present value, at an 8% discount rate, of $14.8-million, a maximum cash drawdown of $100 000 and a payback of two months.

Value
The PFS estimates a low upfront capital outlay of $850 000, of which Primary Gold currently expects, based on negotiations with the preferred mining contractor, about $750 000 to be deferred by up to three months after the start of production.

Duration
First gold production is targeted for the fourth quarter of 2017, subject to regulatory approvals.

Latest Developments
Primary Gold is developing an implementation plan to allow for a fast-tracked decision to mine.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Primary Gold, tel +61 8 6143 6700, fax +61 8 9388 8824 or email info@primarygold.com.au