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Tagged with: Avoca Resources

April 2005 - Avoca Resources

Avoca Resources Limited (AVO) –Bringing Trident Into Production

  • After acquiring Higginsville from Gold Fields in 2004, Avoca has discovered a new orebody called Trident, comprised of two steeply dipping mineralised zones immediately north of the old Poseidon South open-cut and underground workings (which contained near vertical and shallow dipping mineralised gold lodes of ore).
  • The two near vertical zones designated Eastern and Western appear to each contain at least 3 significant (5g/t to 20g/t) gold veins, which may be amenable to a combination of bulk and narrow vein mining with treatment through a gravity plant due to the extremely high gravity recoveries averaging 86% (total recovery ~97%).
  • In its latest announcement on 27 April 2005, Avoca reported its latest assay results indicating the presence of a very high grade shallow dipping vein with 7m @ 72g/t below the Western Zone, and possibly another steeply dipping vein in the hangingwall of the Eastern Zone with 1m @ 162g/t, plus infill in the centre of the Western Zone with 60m @ 7.6g/t, and 31m at 8.2g/t in the Eastern Zone.
  • Currently part of a scoping study, the pit (which is dry except for the portal access in the north corner being a relatively shallow ~15m under water) could be dewatered and the old underground workings (which averaged 7.5g/t over 26,000oz from a vein) extended northwards on strike towards the Eastern Zone.
  • Higginsville appears to be a relatively new goldfield (it was discovered by Samantha Gold in 1988) that was apparently abandoned when Resolute was distracted by its new African gold mines, and consequently contains a number of targets that can be followed up both from an open-cut & underground perspective. There also appears to be a number of similarities between Higginsville and St Ives.
  • Avoca has a number of other prospective exploration targets being those in its own right such as most of Lake Way (south of Wiluna) which is prospective for uranium, gold and nickel and joint ventures, such as with Barrick and Teck.

Jul 2006 - Avoca Resources

Avoca Resources Limited (AVO) –Becoming a >100,000ozpa ~US$300/oz Cash Cost Gold Producer, initially with Trident

  • Avoca has significantly advanced its understanding of the gold mineralisation at its Trident mine at Higginsville, clearly delineating the 3 main ore types of Athena, Western and Eastern. The current mining plan focuses on building up the Western Zone to a sustainable production rate of >100,000ozpa, and taking ore in the “gap” area while declining both towards the Western Zone and down to Athena.
  • It appears that a production rate of >100,000ozpa can be achieved by 2008 through bulk mining the central area of Trident’s 20m - 25m thick Western Zone using Kanowna-Belle style (sub-level open) stoping while bench stoping the ~5m thick Athena for a combined production rate of >700,000tpa @ >6g/t (>125,000ozpa at a 93% recovery).
  • AVO is taking the short-cut to production through toll-treating its ore in a number of nearby plants, but such expected production rates soon place a strain on regional plant availability. Consequently, AVO appears likely to construct its own 1.0mtpa to 1.5mtpa plant by 2008, especially if Trident continues to grow, and its regional ore sources are treated (such as Fairplay, the Palaeos, and possibly Erin).
  • Trident appears to be a combination of Norseman and St Ives-type mineralisation, with thicker, more continuous and better, steep dipping ultra high grade Athena veins, linked by flats, abutting the Western Zone.
  • Just what production rate can be achieved (potentially >170,000ozpa) and at what cash cost appears to be something that can only be delineated through mining from the Western Zone at possibly >5g/t and Athena at potentially as high as 20g/t. While the initial production depends on what can be mined from the “gap” area.

Aug 2007 - Avoca Resources

Avoca Resources Limited (AVO) –Targeting Gold Production >200,000ozpa from Two Operating Mines by 2009

  • The recent acquisition of Chalice and its tenement package has opened up a significant number of drill-ready targets for potential mineralisation that could become a second mine or additional ore source for Avoca’s developing Trident mine near Higginsville in WA, and take its production well beyond 200,000ozpa.
  • The supergene discovery at Wills (~25km north of Trident), lends weight to our (ERA) expectations that the new Higginsville mill could treat ~1mtpa from the Trident underground, and ~0.2mtpa to 0.3mtpa from the numerous near surface open-cuts and low grade stockpile resources for many years to come.
  • At AVO’s Higginsville operation, two drives intersected Trident’s Eastern Lode ore in July 2007, namely the steeper dipping Eastern Lodes (on 1170 Level), and the flatter dipping Eastern Lodes (on 1155 level), starting to build an ore stockpile.
  • Exploration appears to be establishing that the gold veins at Poseidon extend from the old pit through the Poseidon South underground, and then directly link through Trident to the recent intersections 200m north of Trident (and still open north on strike), with the pyrrhotite and arsenopyrite (non-refractory, more crystalline) event providing the spice for the higher grades.
  • At Chalice itself, there are a number of possibilities post dewatering the old open-cut, with unmined ore under the southern wall, a series of IP anomalies to be drilled that have similar signatures to Chalice, and the Cavalier Prospect which has surface mineralisation and intersections resembling that above Trident.
  • The interim treatment of Trident ore before the 1mtpa (rated hard) plant is completed by mid (June/July) 2008 has become more complex with two solutions (Paddington and Norseman) having fallen into AIM listed (private equity backed) hands, and consequently toll treatment costs at all available plants have soared to unfriendly (ERA’s viewpoint) >A$30/t levels (which could delay planned stoping).

Jul 2009 - Avoca Resources

Avoca Resources Limited (AVO) –Moving into the 2nd Phase, targeting production of 150,000ozpa to 190,000ozpa for at least 10 years

  • Avoca has been advancing at a fast pace since discovering Trident in 2005 establishing sufficient ore (by June 2006), dewatering the Poseidon South open-cut and old workings by July 2007, start production, building and commissioning a plant within a year (by July 2008). And then producing ~130,000oz by June 2009.
  • Avoca has established that its 1mtpa rated plant is capable of treating ~1.25mtpa (and probably ~1.5mtpa with minor modifications) mainly due to the gravity circuit achieving ~60% of the recovery (double that expected). Which has paved the way for AVO to move into the 2nd Phase, bringing the satellites on stream such as Fairplay, Chalice, Two Boys, & Vine etc, and hence taking production into a targeted range of 150,000ozpa to 190,000ozpa for at least 10 years.
  • Avoca has given guidance of 190,000oz production for the coming year to June 2010, based on treating 1mt @ ~5.8g/t from Trident with a recovery ~97% for ~180,000oz at a cash cost of ~A$440/oz, and processing ~270,000t of low grade ~1.2g/t ore at a ~95% recovery for ~10,000oz at a cash cost of ~A$684/oz. However, the average Trident grade appears capable of being between 6.3g/t & 7.0g/t, and Fairplay may start production at ~2.0g/t possibly by January 2010.
  • The near vertical high grade Athena veins appear to be the mainstay of the Trident mine (blowing out periodically into the Western Zone) and becoming enhanced into bonanza grades when they are intersected by some of the high grade eastern flats (such as Eos) on the 1005 Level which has raised the average mine grade from ~3g/t to ~4g/t, up to ~6g/t.
  • AVO has submitted a revised takeover offer for Dioro of 1 AVO – for – 2.3 DIO (which has now been unanimously accepted by Dioro’s directors) as part of the 3rd phase strategy to increase production to ~250,000ozpa (although it appears likely to require up to two years to identify the underlying capability of the DIO assets). Avoca has a long-term stated target of becoming a 500,000ozpa producer.

Aug 2010 - Avoca Resources

Avoca Resources Limited (AVO) – Becoming a >$1bn Mid-Tier Gold Company at >350,000ozpa gold with a life of >10 years

  • The recent intersections of ~50m @ 3.5g/t and 29m @ 5.0g/t in Apollo-style mineralisation ~200m north of the Trident orebody on the ~400RL have a significant impact on AVO’s life at Higginsville, inferring a life (when combined with Chalice and regional orebodies) of 180,000ozpa to ~200,000zpa for >10years.
  • At this stage, Chalice appears likely to commence production in 2H2011, following completion of the dewatering of the pit (by end 2010), and then declining down to the Olympus mineralisation. Timed to come into production as Trident moves deeper, Chalice provides increased production flexibility in the 1.3mtpa plant.
  • Following its acquisition of Dioro, Avoca announced in July 2010, that it is starting a feasibility study aimed at doubling South Kal’s Jubilee plant to ~2.4mtpa through cutting back the HBJ (Hampton Boulder – Jubilee) pit and using satellite open-cut/underground sources such as the Mt Marion (West lode) and Barbara-Surprise/Noble areas, resulting in production of >90,000ozpa for at least 10 years (Note : based on 2mtpa at 1.5g/t & 92% recovery, although grades could be higher, and also note 0.4mtpa is for treating AVO’s 49% of Frog’s Leg).
  • Avoca acquired 49% of Frog’s Leg as part of the Dioro acquisition, and Frog’s Leg appears to have a life of at least 10 years, treating ~800,000tpa (or possibly higher) at ~5.0g/t to 5.5g/t for attributable gold production of >60,000ozpa.
  • AVO is gradually working its way through the recently acquired vast South Kal assets which extend arc-like south around Kalgoorlie from the defunct Golden Ridge mine in the SE through HBJ, Mt Marion and Barbara in the SW, and which appear to contain significant upside potential.

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