TIDMGRL
RNS Number : 5669D
Goldstone Resources Ltd
27 June 2019
27 June 2019
GOLDSTONE RESOURCES LIMITED
("GoldStone" or the "Company")
Completion of Definitive Economic Plan
and update for Akrokeri-Homase Gold Project
GoldStone Resources Limited (AIM: GRL) is pleased to announce
that the results from the Definitive Economic Plan ("DEP") at its
Akrokeri-Homase Gold Project ("AKHM") has now been submitted to the
Ghanaian Minerals Commission for their review and approval. This is
an important step as it demonstrates the viability for a low cost
mining operation, as the Company seeks to move rapidly towards
establishing its first operating mine within the Homase Trend.
The DEP sets out the basis for a low cost heap leach processing
facility to process material from three satellite open pits, shown
at Plan 1, lying along the known Homase Trend, either side of the
previously mined Homase Pit, (the "Proposed Mine") to generate cash
flows to fund the further development of AKHM.
DEP Highlights
-- The shallow, free dig mining of the oxide/weathered ore zones only at the Proposed Mine
-- Based on establishing a cyanide heap leach processing
facility and recommends using a contract mining method
-- Total initial capital costs (including pre-stripping and
contingency) estimated to be US$6.5 million
-- Summary economics
- An after-tax Net Present Value of US$19.5 million (at a 10% discount rate)
- An after-tax IRR of 143% at a gold price of US$1,300 per ounce (oz)
- An after-tax payback of the initial capital cost within 1 year
-- The DEP estimates that the mineable resource from the
Proposed Mine is approximately 82,000 oz of contained gold in oxide
ore with a projected 82% recovery from 2.17 million tonnes of oxide
ore at an average grade of 1.2 g/t gold (the "Mineable
Resource")
- Mineable resource is part of the AKHM JORC Resource of 602,000 oz
- Recovery based on proven by column leach testing at University
of Mines and Technology Tarkwa ("UMaT")
- The Company is proposing to also place tailings from the
former Akrokeri Underground Mine ("Akrokeri Tailings"), which the
Company estimates to include approximately 91,000 tonnes at an
average grade of 2.27 g/t gold, equating to approximately 6,500 oz
of contained gold with a recovery of 73%. Recovery rate based on
bottle roll test-work completed by ALS Laboratories Kumasi
-- The DEP estimates that the total plant feed from the Proposed
Mine and the Akrokeri Tailings will be approximately 2.26 million
tonnes with an average grade of 1.2 g/t gold giving total ounces to
the plant of approximately 88,500 oz
- The DEP estimates that the heap leach facility will recover,
in total, approximately 72,000 oz, giving an overall Life of Mine
("LOM") recovery of approximately 81%
-- Proposed LOM projected to be five years, with an average
all-in cost, that includes capital plus cash costs, of
US$852/oz
- LOM capital cost, including sustaining capital costs,
estimated to be US$8.4 million
-- With the DEP having now been submitted, the Environmental
Impact Assessment ("EIA") will be finalised and submitted along
with the mining lease application
-- On receipt of approval from the Ministry of Mines for the
Proposed Mine and subject to funding, GoldStone will seek to
quickly move to commence production to generate near term cash
flows
-- There will be direct and indirect employment associated with
the construction period of the Proposed Mine, including service
providers. Once in production, it is anticipated that the majority
of the Proposed Mine personnel will be employed from within
Ghana
Emma Priestley Chief Executive Officer commented:
"The Proposed Mine is a small project with robust economics that
benefit from straight forward metallurgy, excellent recovery rates
and minimal stripping ratio.
"The Proposed Mine has the potential to generate cash flows to
support the continued development of AKHM, as we seek to
significantly increase the existing JORC Resource at AKHM to
support a potential larger mining operation. Importantly, it will
also boost the local economy, create employment in the region and
generate revenues for the country when fully operational."
Further information
The Company, together with its consultant, MAED (UK) Limited
("MAED"), have prepared a detailed DEP for the Proposed Mine and
the Akrokeri Tailings, which sets out the basis for a very
attractive project using a cyanide heap leach recovery process.
GoldStone is seeking to implement a contract mining methodology for
the Proposed Mine, as this will minimise initial capital costs and
reduces the overall risk for the Company.
The DEP presents positive economics, with key financial
indicators, based on anticipated future gold prices and capital and
operating cost estimates, that justify advancing the Proposed Mine
to a construction stage. Major parameters to note are:
1. The recovery of 82% for the ore from the Mineable Resource
has been used and is based on testwork carried out by UMaT using
column leach testing rather than using the bulk heap leach test
recovery of 87.5%, announced on 2 May 2019. The reason for this is
that there is a possibility that the bulk heap leach test results
may have been affected due to the presence of coarse gold.
2. Tailings from the former Akrokeri Mine that closed in 1909,
are positioned in various places in the vicinity of the town. These
tailings have been re-worked by artisanal miners over the past
century. GoldStone undertook an auger programme in Q2 2018 and the
results favourably presented three blocks of viable mineralised
zones to a depth of three metres with an average grade of 2.27 g/t.
The Company's internal estimated tonnes of these three zones is
approximately 91,000 tonnes. ALS Laboratories in Kumasi, carried
out the assays as well as conducting bottle roll tests on the
tailings material, which indicated an overall recovery of 73%,
which is a key indicator that the tailings are amenable to the
cyanide heap leach process to be used by the Company. It is
intended to utilise the Akrokeri Tailings as the base/cushion layer
for the heap leach pads, with the Company estimating it will
recover up to 5,000 oz gold from these tailings over the LOM.
It is MAED's opinion that the exploration and engineering test
work carried out to date, together with the extensive historical
operational data from the main Homase open pit ("Homase Main")
mined by Ashanti Goldfields Corporation ("AGC") in the early 2000s,
support the development of the Proposed Mine as detailed in the
DEP.
The historical recoveries recorded by AGC from the Homase Main
were reportedly 47% higher than expected over a two-year mining
period. This was believed to be as a result of small high grade pay
shoots that are typically encountered in this area, as well as the
presence of coarse gold. We previously stated that there was a
potential for a gravity recoverable gold circuit to accommodate the
coarse gold. However, the DEP has shown that this would not be cost
effective initially, as the quantums of the coarse gold cannot be
accurately predicted despite their existence. The grades used in
the DEP are therefore considered by the Board to be conservative,
with the potential for higher grades to be encountered over the
LOM, thereby increasing the overall recovery rate.
The DEP recommends that additional geological exploration and
metallurgical test work continues in parallel with developments to
further improve the AKHM database and to delineate additional
resources, and it is the Company's intention to consider such
additional work going forward. Both GoldStone and MAED are
confident that significant additional resources will become
available as the project advances and that the additional work will
also increase the average grade of the Proposed Mines, as was the
case when AGC mined Homase Main.
Plan 1: Location plan of Proposed Mine
http://www.rns-pdf.londonstockexchange.com/rns/5669D_1-2019-6-26.pdf
Next Steps
With the DEP having been completed and submitted, the Company
will now seek to complete and finalise the EIA. Once the Ghanaian
Minerals Commission has reviewed the DEP, the Company will then
submit the environmental permit application in tandem with the
mining lease application.
GoldStone looks forward to keeping shareholders updated on its
progress in this regard.
Akrokeri Underground Mine
We are pleased to report that operations continue with the
re-opening of the former Akrokeri Mine, which was abandoned in 1909
due to a sudden in-rush of water.
We have accessed the former workings through the North shaft and
have progressed past Level 1 of the old mine, at a depth of 100
feet (30 metres). Whilst the clearing out of old rails, wood and
debris continued within the shaft itself, due to excessive side
wall failures collapsing into the shaft that appeared to be from
the Level 1 station and possibly from the "back" of the Level 1
drift, albeit within close proximity to the shaft, a decision was
taken to put any further work in North Shaft on hold due to safety
concerns.
It is obvious that Level 1 has fully collapsed at least within
the vicinity of the shaft and that any further rehabilitation work
will be time consuming and costly.
Work via the Norton Shaft also continues with the development of
a drift at approximately 30 metres below surface to the north east
of the Norton Shaft to intersect the mineralised zone, which is
estimated to be approximately 20 metres from the Norton Shaft. The
drift has advanced to 15 metres and due to the uncertain ground
conditions slowing the development progress, we anticipate
intersecting the mineralised zone within the next few weeks.
Adubriem and Krodua Anomalies
Further exploration work through trenching was carried out on
the parallel mineralised gold structures to the Homase Trend, these
being the Adubriem and Krodua anomalies. The results prove the
existence of the anomalies. However, the main Homase Trend is the
more viable deposit for current exploitation purposes. These
parallel zones remain as potential satellite deposits in the
future, although further exploration work will be required.
Information in this announcement has been reviewed and approved
by Klaus Kappenschneider, an independent geologist with 30 years
experience in gold mining, exploration and resource estimation.
Klaus is a member of the Association of Professional Geoscientist
of Ontario (APGO), is a Competent Person (JORC, SAMREC, PEMREC) and
a Qualified Person (NI 43- 101) and accordingly, is a qualified
person as required under the AIM Rules.
For further information, please contact:
GoldStone Resources Limited
Emma Priestley Tel: +44 (0)20 7236 1177
Strand Hanson Limited
Richard Tulloch / James Tel: +44 (0)20 7409 3494
Bellman
SI Capital Limited
Nick Emerson Tel: +44 (0)1483 413 500
St Brides Partners Ltd
Susie Geliher / Juliet Tel: +44 (0)20 7236 1177
Earl
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
- ENDS-
About GoldStone Resources Limited
GoldStone Resources Limited (AIM: GRL) is an AIM quoted
exploration company with projects in Ghana and Senegal that range
from grassroots to advanced exploration.
The Company is focused on developing the Akrokeri- Homase
project in south-western Ghana, which hosts a JORC Code compliant
602,000 oz gold resource at an average grade of 1.77 g/t. The
existing resource is confined to a 4km zone of the Homase Trend,
including Homase North, Homase Pit and Homase South.
The project hosts two former mines, the Akrokerri Ashanti Mine
Ltd, which produced 75,000 oz gold at 24 g/t recovered grade in the
early 1900s, and the Homase Pit which AngloGold Ashanti developed
in 2002/03 producing 52,000 oz gold at 2.5 g/t recovered. It is the
Company's intention to build a portfolio of high-quality gold
projects in Ghana, with a particular focus on the highly
prospective Ashanti Gold Belt.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCEAXKKAAPNEFF
(END) Dow Jones Newswires
June 27, 2019 02:00 ET (06:00 GMT)
Goldstone Resources (LSE:GRL)
Historical Stock Chart
From Apr 2024 to May 2024
Goldstone Resources (LSE:GRL)
Historical Stock Chart
From May 2023 to May 2024