The initial ore reserve for the Barani deposit is expected to add about one full year of gold production to G-Resources’ mine plan for the Martabe Gold-Silver Project in Sumatra.
The Barani reserve statement is expected to be released within weeks and will add to the company’s October 2009 ore reserve announcement.
Based on the October statement, a new mine plan has been produced for the Martabe Pit 1 deposit which provides a smooth annual production profile of about 250,000 ounces of gold and 2-3 million ounces of silver over the life of mine.
Total ore reserves over the life of mine are 35.3 million tonnes and total waste is 46.8 million tonnes yielding a low waste to ore strip ratio of 1.33. Within the waste tonnes are 7 million tonnes of inferred mineral resources and conversion of some or all of this material to ore reserves will yield additional ounces of gold and silver and lower the mining strip ratio to less than 1.0.
Recent near mine and regional exploration activity continue to demonstrate the significant upside potential in and around the Martabe deposits and the gold and gold/copper discovery opportunities on the highly prospective overall tenement. This provides confidence in the potential for expansions and extensions of mine life.
The Martabe project remains on schedule to produce first gold and silver in the first quarter of 2011.
Under the EPCM contract with Ausenco, a number of construction contracts have been awarded, including earthworks, permanent access road and logistics contract. In coming weeks, the company will award the mining services, aircraft charter, civil-concrete works and catering contracts.
In the past six months, a number of key equipment items have been ordered, including the oxygen plant, vibrating screens, elution columns, electro-winning cells, cranes, transformers, high voltage variable speed drives, fans, apron feeders, camp accommodation and many others. The total value of these orders is about US$32 million.
In addition, there is US$20 million of equipment, ordered 15 months ago and which is warehoused in Singapore and ready for delivery to the project site at the required time. This includes the long-lead items of the SAG mill, the ball mill and the primary crusher
The full engineering project team is in place and all activities are on schedule. The construction site team continues to mobilize and site activities are increasing exponentially. The operations team is being recruited and operations training programs for local staff commenced.
Re-estimates of operating and capital costs indicate both will be within the accuracy range of previously reported estimates.
A sale and purchase agreement (SPA) has also been signed with the Indonesian state-owned power provider PT PLN to supply power to the mine. PLN will provide power for nine years at a tariff of 985 Rupiah (about US10.5 cents) per kWh.
www.g-resources.com