Crater Gold Mining has announced a maiden inferred resource estimate for its HGZ gold mine, which is part of the Crater Mountain Gold Project in Papua New Guinea. The JORC-compliant resource is 44,500 tonnes at 11.9 grams/tonne (g/t) for 17,100 ounces of gold at a cut-off grade of 5 g/t and with potential for substantial increases.

With the project already being in production and having gold processing facilities on site, the maiden resource paves the way for increased production with minimal additional capital expenditure or development time.

As part of the resource definition, mapping of the HGZ showed three distinct major high grade gold veins. The three veins are closely linked and are estimated to carry 11,800 ounces of gold.

The company will now refine the mining method for maximum gold extraction from the higher cut-off grade of 7.5g/t implementing a revised, more focused mining plan. This will allow more efficient, targeted gold production.

The mining plan will be implemented, with the development of the 1930 Level via a new adit which is currently being established.

Crater Gold’s technical director Richard Johnson said, “This maiden resource marks a significant milestone for the company, confirming the potential for profitable gold mining from the HGZ project. The report also provides us with more detail of the high grade veins enabling us to target more selective mining of the 3 main high grade veins going forward.

“Whilst the initial JORC resource may seem modest, the gold is accessible and all infrastructure is in place, allowing the company to move quickly to mining of the 3 veins as well as other cross cutting structures.”

The maiden resource estimate only considers the HGZ as identified to date. Development of the 1930 Level will pass through approximately 100 metres of previously unexplored ground adjacent to the high-grade zone. This area is considered prospective for finding additional gold bearing structures.

The potential to increase the resource is considered substantial given that drilling to date has mostly been confined to a maximum depth of 75 metres from surface. However, there is also evidence from drilling that gold is encountered at least to a depth of 128 metres from surface.

Crater Gold plans to commence infill drilling from the 1930 level which is currently under development as recommended.

The resource estimate was completed by Ian Taylor, of Mining Associates. The Nevera prospect was visited by Ian Taylor during the period from September 26 to 30, 2016. In the course of the site visit, he viewed mineralised drill core and examined the drill core, processing and storage facilities. He also toured the underground workings, inspecting geology in the backs and walls of underground drives.

From this, he provided a report including the resources estimate, mapping details of high grade veins and recommendations.

Ian Taylor states in his report that there is an opportunity to expand the resource along strike and laterally with further drilling and mapping, and also to improve the confidence of the mineral resources internally by infill drilling and development.

 

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