PERTH (miningweekly.com) – Gold junior Red 5 has revised the openpit mining schedule for its Siana project, in the Philippines, to optimise the extraction of ore over the project’s remaining life.

Mining at Siana was expected to cease in December 2017 and the revised mine plan was expected to recover some 181 000 oz of gold between July and the end of mine, through a progressively staged cut-back of the East pit wall to allow the base of the openpit to be mined to a final depth of some 180 m below surface.

Red 5 noted this week that the revised strategy would improve cash flow from Siana while mitigating geotechnical risks, as far as possible, and preserving the integrity and safety of the openpit operations.

“The key objective of this review is to maximise the economic extraction of ounces from the openpit, while giving priority to the safety and integrity of the openpit mining operation.

“I believe the mine plan we have now developed, which has been independently reviewed and assessed by a number of different specialists, strikes the right balance and sets up a solid platform for the company," commented Red 5 MD Mark Williams.

As a result of the revised mine plan, Red 5 had elected to remove some 74 000 oz from its ore reserve inventory, with the miner also warning of a A$50-million to A$60-million impairment charge for the 2015 financial year.

“The board has taken the view that while regrettable, this is a prudent and responsible measure which brings the company’s balance sheet back in line with the expected production outcomes from the openpit and underground reserves,” Williams said.

The Siana project was now estimated to host 5.8-million tonnes of resource, grading at 2.6 g/t of gold and 6.3 g/t of silver, for 490 000 oz of gold and 1.1-million ounces of silver.

An ore reserve of 1.9-million tonnes, grading 3.5 g/t gold and 8.2 g/t silver, for 181 000 oz of recovered gold and 224 000 oz of recovered silver, was also reported.

“Our intention is that the cash-flows generated by the openpit operation will also provide a foundation for the longer-term development of the Siana gold project [through] a potential future underground mining operation.

“In this regard, we are very pleased with the preliminary results of the Mining One underground concept study that provides us with a blueprint to move this important project forward,” he advised.

The underground concept study had suggested that further work be undertaken to upgrade the existing reserve to a Joint Ore Reserves Committee 2012 status if a future development of the underground mine at Siana was to be considered.

This work would involve developing a feasibility study and an associated underground mine plan, Red 5 said.

Looking ahead, the Siana project was expected to produce between 50 000 oz and 60 000 oz of gold during 2016.