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Jul 2014 - Excelsior Gold Ltd

Excelsior Gold Limited (EXG) – Targeting Production from its Zoroastrian Pit by JQ15

  • Excelsior Gold (EXG) has 100% of the original Kalgoorlie (Kal) North Project, which is centred over the historic Zoroastrian and Excelsior gold mines and open-cuts in the ~20km long Bardoc goldfield, ~45km north of Kalgoorlie in WA. EXG has entered into a game-changing agreement (to be finalised in August 2014) to supply at least 0.5mtpa for 5 years to Norton Gold Fields' (NGF's) Paddington plant (~18km south of Zoroastrian).
  • With NGF's preference for oxide/transition ore to blend with its own harder ore, the ~100m deep weathering profile of the Zoroastrian ore reserves (~26% oxide / ~45% transition) could provide an ideal relatively high grade (>2.5g/t), 0.5mtpa source for at least the next 6 years (based on the existing open-pit reserves of ~2mt @ 2.5g/t, indicated resources of 4.3mt @ 2.4g/t and underground indicated resources of 0.5mt @ 4.5g/t). The Zoroastrian (Zoro) resource is based on an unmined N/S striking granophyric dolerite unit that lies adjacent and west of the original historic Zoroastrian pit.
  • In addition to the Zoroastrian pits (and possibly underground) are EXG's SMP's (or small mining projects) that could evolve into something substantial with Bulletin South and its multiple stockworks bearing some similarity to the mineralisation in the Paddington pits. The SMPs are mainly based on the old workings (of which there are ~600 in the Bardoc Goldfield, but most of them are very shallow [<20m or 30m]). It should be noted that NGF's Wendy Gully pit developed from a small SMP into a >200koz pit and underground.
  • The new option, subject to an Agreement with Norton Gold Fields by the end of August 2014 requires an upfront $12.5m (towards upgrading the Paddington Mill) for EXG delivering ~500ktpa for 5 years (and possibly longer), with EXG undertaking the mining and NGF the transport and milling. Depending on compatibility with NGF's ore and the Paddington milling schedule, higher annual treatment rates may be achieved (possibly up to 30% more), representing potential annual production of ~35,000ozpa to ~50,000ozpa.
  • Prior to the Paddington option, EXG secured a $4m convertible loan facility with Macquarie Bank based on the intention to complete a DFS. That has now changed with the first $2m tranche (on a 7%pa interest rate above the 3mth bank bill swap rate) to be used for infill and geotech drilling to try and reduce the PFS strip ratio on the Central Zoroastrian pit through increasing its indicated resources and possibly steepening its walls. The 2nd $2m tranche would be for a study taking the Zoro pits to a mineable state.
OTHER KEY POINTS:
  • Opening up the Zoroastrian pits (orig extended, central and south), enables EXG to correctly identify which are the best lodes to follow and mine underground
  • Conventional gravity, cip/cil treatment etc was expected from initial metallurgical testwork which had recoveries of ~94% from Zoroastrian oxide / transition ore. Paddington intends to test batch Zoroastrian ore at possibly monthly intervals to establish a grade and recovery that EXG receives, as the ore is to be blended with Paddington ore. • Excelsior Gold has a staggering number of drill-ready targets in its pipeline pyramid, with ~10 targets in the PFS, another ~20 in development and a further >50 drill-ready.
  • EXG's planned operation already has excellent infrastructure being adjacent to the Goldfields highway, with delineated water bores and low cost mains power, and very close to (commutable from) Kalgoorlie.
  • There is also already an existing haul road for part of the distance from the Zoroastrian pit to the Paddington plant.
  • Tuesday, 01 July 2014

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