TIDMHGM
RNS Number : 9496D
Highland Gold Mining Limited
06 February 2018
HIGHLAND GOLD MINING LIMITED
Kekura Feasibility Study and Resource Update
06 February 2018
Highland Gold Mining Limited ("Highland Gold" or the "Company",
AIM: HGM) today announces results from a Definitive Feasibility
Study ("DFS") and updated JORC-compliant Mineral Resource and Ore
Reserve estimates ("Resource Update") completed by international
consultancy Fluor with input from SRK. An executive summary of the
report will be available shortly on the Company's website
(www.highlandgold.com).
Kekura, located in the Chukotka region in Russia's Far East, is
the Company's flagship development project. Substantial exploration
work and technical studies have already been completed to date,
with production targeted to commence in 2021.
DFS HIGHLIGHTS
-- Resource Update for Kekura with total gold reserves of 2.0 Moz at a grade of 7.0 g/t versus the previously
reported 1.7 Moz at a grade of 10.7 g/t (1 January 2017).
-- The DFS envisages a sequential and combined open-pit and underground operation with an estimated total mine life
of 16 years, compared to eight years projected in the preliminary feasibility study.
-- Expected mill head grade of 7.49 g/t for the first nine years of plant operation, and 5.58 g/t for the final
seven years.
-- Open-pit mining planned for the first four years, with combined open-pit and underground operations starting from
year five.
-- Mining and processing plant capacity of 800 ktpa, with volumes dropping to 300 ktpa in the final seven years as
mining operations move completely underground.
-- Gold mineralisation at Kekura is primarily non-refractory and can be recovered through a conventional gravity
with respective cyanidation flowsheet, with expected total recoveries exceeding 85%.
-- Power supply from the regional electrical grid, versus previously-planned self-generation.
-- Expected capital costs of US$ 229 million.
-- Average annual gold production of 172 koz for the first eight years of operation and 46 koz for the final eight
years.
-- Total life of mine production of 1.744 Moz at an average total cash cost of US$ 511/oz and all-in sustaining
costs of US$ 541/oz.
-- Post-tax NPV@10% of US$ 311 million and IRR of 38%, excluding historical costs and based on a gold price of US$
1250/oz.
Kekura enjoys a high-grade mineral resource base. The Resource
Update contained in the DFS was prepared using data collected from
geological exploration in the period from 2006 to 2017, including
exploration drilling and pilot mining.
Mineral Resources of the Kekura Deposit*
In accordance with the JORC Code (2012) as of 01 January
2018
Ore Au Contained Contained
(MT) (g/t) Au Au
(tonnes) (Moz)
========== ===== ====== ========= =========
Measured 0.58 11.0 6.5 0.206
========== ===== ====== ========= =========
Indicated 8.72 8.0 69.5 2.231
========== ===== ====== ========= =========
Inferred 0.16 3.3 0.5 0.017
========== ===== ====== ========= =========
Total 9.46 8.1 76.5 2.454
========== ===== ====== ========= =========
* Notes:
- Mineral Resources are reported inclusive of ore reserves.
- Cut-off grade of 1.0 g/t
Ore Reserves of the Kekura Deposit**
In accordance with the JORC Code (2012) as of 01 January
2018
Ore Au Contained Contained
(MT) (g/t) Au Au
(tonnes) (Moz)
========= ============ ===== ====== ========= =========
Proven Open Pit 0.65 9.24 6.0 0.193
Underground - - - -
Total 0.65 9.24 6.0 0.193
====================== ===== ====== ========= =========
Probable Open Pit 5.10 7.82 39.9 1.282
Underground 3.13 5.31 16.6 0.534
Total 8.23 6.86 56.5 1.815
====================== ===== ====== ========= =========
Total 8.88 7.03 62.5 2.008
======================= ===== ====== ========= =========
** Cut-off grade of 1.6 g/t Au is applied to the open pit and
2.0 g/t for vertical zones and 3.0 g/t for horizontal zones Au at
the underground mine.
Preliminary construction work is already underway at Kekura,
with the bulk of construction due to take place in 2019-2020. Key
equipment will be selected and ordered this year for delivery to
site in early 2019. Pre-commissioning is scheduled for late 2020 or
early 2021, with ramp-up to full production in the second half of
2021.
The broader Kekura licence area covers nearly 1,500 square
kilometres and hosts 11 additional prospects that could provide
further resources for the Kekura mill. The Company has already
initiated exploration drilling on the Granat prospect with results
expected later this year.
Information contained in this release with respect to drilling
and resource / reserves statements has been taken from the report
"Kekura Gold Project Feasibility Study" and prepared in compliance
to the JORC Code 2012 by a panel of qualified industry experts of
SRK for Highland Gold Mining. The Competent Person for the
estimation of Mineral Resources is Liubov Egorova, MAusIMM, who has
more than 10 years relevant experience. The Competent Person for
the open pit ore reserves is David Pearce, FAusIMM who has 30
years' experience in open pit mining. The Competent Person for the
underground ore reserves is Michael Beare, MIMMM who has more than
20 years' experience in underground mining. Together they have
verified the information pertaining to the DFS in this release.
They have sufficient experience relevant to the style of
mineralisation and type of deposit under consideration to qualify
as Competent Persons as defined in the 2012 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves".
FOR FURTHER INFORMATION PLEASE CONTACT:
Highland Gold Mining Ltd. John Mann, Head of Communications
+ 7 495 424 95 21
Duncan Baxter, Non-Executive Director
+ 44 (0) 1534 814 202
Numis Securities Limited John Prior, James Black, Paul Gillam
(Nominated Adviser and Joint Broker) +44 (0) 207 260 1000
BMO Capital Markets Limited Jeffrey Couch, Neil Haycock, Pascal Lussier Duquette
(Joint Broker) +44 (0) 207 236 1010
Peat & Co Charlie Peat
(Joint Broker) +44 (0) 207 104 2334
***
Glossary
JORC - Widely accepted standard for reporting mineral resources
and ore reserves established by the Australasian Joint Ore Reserves
Committee.
Mineral Resource - concentration or occurrence of solid material
of economic interest in or on the Earth's crust in such form, grade
or quality and quantity that there are reasonable prospects for
eventual economic extraction. The location, quantity, grade or
quality, continuity and other geological characteristics of a
Mineral Resource are known, estimated or interpreted from specific
geological evidence and knowledge, including sampling.
Inferred Mineral Resource- that part of a Mineral Resource for
which quantity and grade or quality can be estimated on the basis
of geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. The estimate is
based on limited information and sampling gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes.
Indicated Mineral Resource - that part of a Mineral Resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. The estimate is based on
detailed and reliable exploration and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably
assumed.
Measured Mineral Resource- that part of a Mineral Resource for
which quantity, grade or quality, densities, shape, and physical
characteristics are so well established that they can be estimated
with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning
and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough to confirm both geological and
grade continuity.
Mineral Reserve - the economically mineable part of a Measured
or Indicated Mineral Resource demonstrated by at least a
Preliminary Feasibility Study. This Study must include adequate
information on mining, processing, metallurgical, economic and
other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified. A Mineral Reserve
includes diluting materials and allowances for losses that may
occur when the material is mined.
Probable Mineral Reserve - the economically mineable part of an
Indicated and, in some circumstances, a Measured Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can
be justified.
Proven Mineral Reserve - is the economically mineable part of a
Measured Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction is justified.
This information is provided by RNS
The company news service from the London Stock Exchange
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