Aussie explorer upbeat on Ghana gold prospect

Australian miner, Red Back Mining, has announced ore reserves exceeding one-million ounces for its flagship Chirano gold project in Ghana, as it finalises the project’s bankable feasibility study (BFS) and prepares to move forward with its funding and development.

The Perth-based company said it had achieved its reserve target for the project with the release of proved and probable open pit ore reserves of 16,1-million tons at 2,1 g/t for 1,062-million in situ ounces, estimated by consultant RSG Global. Based on a metallurgical recovery of 90%, this equates to 960 000 recovered ounces.

The reserves are based on a gold price of $325/oz, a cut-off grade of 0,8-1,0 g/t and detailed open pit designs produced by RSG, following optimisation studies, which excluded inferred resources.

Red Back’s MD, Ross Ashton, said the reported reserves were conservative, with pit optimisation studies based on previously announced measured, indicated and inferred resources of 2,05-million ounces, indicating the sensitivity of the project to increases in the gold price.

"Approximately 30 000 of the inferred resource ounces are contained within the designed pits and are likely to be mined in addition to the reported ore reserves, providing additional future upside for the project," Ashton said. "While additional drilling will be required to upgrade these ounces to reserve status, we expect the conversion rate to be high based on previous results".

Ashton also highlighted the sensitivity of changing gold price to the conversion of resources into reserves. At $350/oz, gold price pit optimisation studies on the total resource, including inferred material, showed 1,39-million ounces within the pits. At $375 and $400 gold price the in situ ounces lying within the optimised pits was 1,57-million ounces and 1,62-million ounces respectively.

He said the full results of the bankable feasibility study, which is based on ore mined from a central pit complex plus satellite pits treated through a centrally located two-million t/y treatment facility would be released within the next few weeks.

"We have received preliminary capital cost estimates for the treatment plant and an analysis is currently being completed, with details to be released next month," he said. Red Back completed extensive exploration drilling, metallurgical test-work and other pre-development work at Chirano during 2002, positioning the project to move ahead with development this year.

Scoping studies conducted by Red Back incorporating the discovery of new open pittable deposits, north and south of published resources and the potential to combine smaller pits into a single larger pit, indicated that the project was economically viable as a standalone operation based on a one-million ounce reserve target.