OPTIMISATION of operations is the ongoing focus of Majestic Gold at the Songjiagou Gold Project in Shandong Province. The company aims to achieve this through implementing a grade control program as well as developing an optimised mine plan.

The Songjiagou project is on Jiaodong Peninsula in Shandong Province, which is the historic heartland of China’s gold mining industry.

The company has been unable to realise the mine’s full potential due, in a large part, to the lack of consistent grade control of material entering the mill after being mined in the pit. Management is limiting daily production to the capacity of the 6000 tonnes mill as it continues to work on implementation of its grade control program and development of an optimised mine plan.

Songjiagou is Majestic’s flagship project. The company began commercial production in May 2011. The company’s joint venture partner, Yantai Dahedong Processing Company Ltd, has held the contract to mine and process ore since start-up.

There were 442,331 tonnes milled for the three months ended March 31, 2016, with an average head grade of 0.44 grams/tonne (g/t), compared to 364,232 tonnes milled, with average head grade of 0.42 g/t, for the comparative period of 2015. Majestic estimates the average head grade will continue to be in the range of 0.45 g/t until the grade control program and optimised mine plan are in place.

Total gold produced for the March quarter was 5498 ounces, compared to 4807 ounces for the comparative 2015 period. The company expects production to continue to average around 5000 ounces quarterly until it has fully implemented the optimisation programs.

Gold produced for the six months ended March 31, 2016, was 12,711 ounces, compared to 9871 ounces for the comparative period. The increase can be primarily attributed to the recovery and processing of approximately 30,000 tonnes of fine fraction material of a higher grade than the overall grade of ore throughput to the mill.

Songjiagou has three processing plants. Two were put into operation in 2006 with daily capacities of 200 tonnes and 1200 tonnes and the third in May 2011 with a capacity of 6000 tonnes. The 1200 tonne mill is not being utilised and all material mined currently is processed in the 6000 tonne mill.

In 2015, the 200 tonne mill was upgraded to 2000 tonnes by a third party, YE Zhifan, to process waste material. Zhifan has paid all upgrade costs and pays CNY5.5 per tonne for use of the tailings dam to a daily maximum of 1500 tonnes.