Steam Engine mine stacks up for Superior

Superior Resources could be mining gold at Steam Engine, 30km west of Greenvale, within 18 months after positive scoping study results. While an open-pit operation with toll treatment offers a fast track to cash returns for the company, it also has its eye on the potential for a stand-alone processing operation in the area to capitalise on a raft of copper and nickel resources that also lie within its Greenvale project. Managing director Peter Hwang. "We are very pleased with the outcome of the scoping study, which is a significant step forward for the Steam Engine gold deposit and the company’s strategy for the greater Greenvale project," Superior managing director Peter Hwang said. “The study has demonstrated the economic robustness of the project and highlights a low-cost start-up opportunity to generate early cash flow. "The upside potential is substantial and presents a compelling case to commence a feasibility study and the regulatory approvals processes to enable the commencement of mining." The scoping study was based on the March 2021 revised mineral resource estimate at Steam Engine of 1.73 million tonnes at 2.2 g/t gold for 122,000 ounces of gold. Mine to run almost two years, about 30 jobs expected Pit optimisation and mine planning exercises resulted in pit shells scheduled to mine 1.1 million tonnes at 2.31 g/t gold to recover 70,000 ounces. The mine would cost about $5 million to bring online and Superior said base-case economic modelling indicated it would deliver a post-tax cash flow of $24.2 million (at an assumed gold price of $2200 per ounce) over a 21-month period of mining. A mining contractor would be responsible for workforce recruitment, with contract employees expected to be locally based or DIDO, using Greenvale as their base. The operation would be expected to employ about 30 people including mining and haulage workforce as well as Superior Resources employees. The company said there were no long lead time capital items with this project, so the timing of approvals would be the critical path for the project schedule. "If good progress is made in this area and further studies remain positive, then the project could be producing gold within 18 months," it said. The company said the feasibility study - launched immediately - would be conducted on the basis of an open pit mining operation with third party toll treatment. However it also plans further drilling and said a modest increase in total mineral resources at Steam Engine would be likely to provide significant justification for a standalone operation, which would then substantially improve the project economics and returns. It has recently identified a new lode system, Dinner Creek, further to the south east. Aggressive drilling campaign to expand gold resource “The exploration potential at Steam Engine is significant," Mr Hwang said. "As we progress through the feasibility phase during 2021, we will also be endeavouring to expand the total gold resources through aggressive drilling." He said Superior Resources was confident that Steam Engine was poised to be an operation capable of underpinning a greater Greenvale copper, gold and, potentially, nickel development strategy. "This comes as we embark on the company’s 2021 exploration campaign to execute potentially transformative drilling programs at our Tier 1-potential copper and subject to funding, our nickel sulphide targets," he said. "We believe that the substantial mineral endowment at Greenvale, predominantly represented by copper and nickel, together with Steam Engine, represents serious potential to support a centralised stand-alone processing operation. “The implementation of our Greenvale Strategy in 2021 will be key to unlocking the value potential presented by the Greenvale Project.” Drilling at the Steam Engine gold project last year.

Steam Engine mine stacks up for Superior

Industry Queensland

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