Jul 02, 2020

Mount Mackenzie muscles up amid high gold prices

Mount Mackenzie muscles up amid high gold prices

Resources and Energy Group has completed pit optimisation and life of mine scheduling for a 500,000-tonnes-per-annum operation at Mount Mackenzie in Central Queensland.

It is a step up from the production rate envisaged when the company released a scoping study late last year showing a strong case for the development of an open-cut gold mine at the site.

That work identified a 300,000-tonnes-per-annum open-cut development with on-site gold plant as the best case to progress.

But Resources and Energy Group in May announced a 44 per cent increase in the resource at the gold and silver project, located about 150km north-west of Rockhampton.

It now stands at 3.42 million tonnes at a grade of 1.18g/tonne gold and 9g/tonne silver for a total of 129,000oz of gold and 862oz of silver.

High gold prices were also a factor in the company’s reworking of its figures for Mount Mackenzie.

It says the results have confirmed the potential for a low-cost, open-cut development with a free cash flow of $63 million.

Bore core from the Mount Mackenzie ore body.

The optimised pit generates a production target of 2.2 million tonnes at a head grade of 1.32g/t gold and 8.5g/t silver.

At a mining rate of 500,000 tonnes per annum the development would run for about five years and produce about 94,000oz of gold and 610,000oz of silver (mined). The mill output would be 67,000oz of gold and 392,000oz of silver.

As part of its feasibility work, Resources and Energy Group said it would carry out further studies to investigate the option of producing a primary ore bulk concentrate.

“The adoption of a crushing, grinding and bulk sulphide flotation process to produce a polymetallic concentrate has potential to unlock substantial additional feed sources at Mount Mackenzie,” the company stated.

“A significant part of the primary (sulphide) ore is currently outside the optimised resource shell due to the lower recovery by conventional CIL treatment.”

An RC and diamond drilling campaign is planned to help convert the remaining inferred resources to indicated.

As part of this program, bore core representing the primary sulphide ore zone will be submitted for metallurgical test work.