The decline at Cadan Resources’ T’Boli Gold-Silver Project in the Philippines has advanced 358 metres and reached first ore on the 540 level crosscut. It is a significant milestone for Cadan as it re-establishes mechanised access to the first of a series of sub-parallel, stacked, high-grade gold and silver enriched epithermal veins for the first time since 2014.

The next mineralised vein is expected to be intersected within two weeks at current mining rates, with ore drive development along three headings planned to begin next month.

Cadan commenced construction of a new portal and decline access at T’Boli at the start of 2016. The aim of this strategy is to resume underground mine production and processing at a daily rate of 200 tonnes.

Following the commencement of ore stoping, which is expected during the December quarter, Cadan is targeting to achieve this production rate in the March quarter of 2017.

In parallel, modifications are being made to improve the efficiency of the existing 72,000 tonne/annum CIL milling facility. The plant achieved daily design capacity of +200 tonnes in February and has been processing lower grade material and tailings at this level in recent months.

Ore mined from the underground development will be stockpiled until early 2017 in order to establish sufficient stocks of mined material to ensure the uninterrupted processing of higher grade material.

The first epithermal vein intersected by the underground development was encountered 27 vertical metres below the lowest level developed in a now decommissioned decline at T’Boli in 2014.

The mineralised area was subjected to only wide-spaced diamond drilling and initial sampling of the area provides considerable confidence in relation to reconciliation with the revised geological and mine design model for T’Boli.

Channel sampling of the crosscut side walls by mine geologists that was assayed at T’Boli’s on-site laboratory returned results of 4.8 metres @ 5.35 grams/tonne (g/t) gold in the Western Sidewall and 3.3 metres @ 3.58 g/t gold in the Eastern Sidewall with an average of 4.03 metres @ 4.62 g/t. All silver results from the areas are still pending.

The resource model on which the T’Boli published mineral resource estimate is based models gold grades in this location within a range of 1.2-1.5 g/t gold, highlighting the positive reconciliation achieved in this first area.

Development of the Main Decline to the 515 level continues in accordance with the revised mine design which has been prepared by CSA Global from Perth, Western Australia. Cadan expects to receive the final version of the mine model by the mid-October 2016. CSA Global’s process will also include a revised resource reserve estimate which Cadan also expects to be in a position to release during October.