CRATER Gold Mining expected to be operating at full mining capacity at its High Grade Zone (HGZ) project by the end of 2015 following completion of a mining plant upgrade. At full capacity the company anticipates producing 10,000 ounces of gold in the first full year of production at an all-in cash cost of less than $400 per ounce over the mining lease term.
In its September quarterly report, Crater Gold said a complete gold processing plant was being shipped to site while it was installing an additional compressor, generator and switchgear, another excavator and a compressed air bogger.
The ASX-listed company began producing gold from HGZ at Crater Mountain in May 2015 and production has been ongoing. It has recently secured Aus$3.4 million in a well-supported two-stage capital raising which was aimed at helping achieve full mining capacity and positive cash flow by the end of 2015.
This capital raising comprised two tranches with the first tranche of Aus$1.3 million issued to a selection of international institutional investors and family offices. The second tranche of Aus$2.1 million was issued to Freefire Technology on the same terms, thereby maintaining Freefire’s 62% holding.
Drive development is continuing on gold bearing veins within the HGZ delineated from previous underground development and diamond drilling carried out in 2014. The veins are being developed at a narrow width. Additional drives are being commenced, increasing the number of headings being developed.
Mining Development is being undertaken in right drives on mineralized gold-bearing structures at the 1960 RL Adit. The drives are on the NV1 (North Vein No1), NV2, NV4, EV2 (East Vein No2), EV4, JL (Jeremiah Lode), JL2 and JL3 veins.
Crater Gold stated in its quarterly report: “The HGZ project is a high margin operation. The HGZ mine will generate strong cash flows, which will fund further expansion at the HGZ mine and enable further exploration activities at the company’s other assets. As our mining activities accelerate, revenue will rise exponentially.
“While the current focus remains on the HGZ mine, there remains potential to increase the current JORC compliant resource of 24 million tonnes @ 1.0 grams/tonne gold for 790,000 ounces at the nearby Mixing Zone project at Crater Mountain.”
Crater Mountain is 50km southwest of Goroka in Eastern Highlands Province. There has been more than 14,500 metres of diamond drilling to date, the majority focused on Nevera prospect which hosts HGZ.