OTCBB Symbol: EGDD
 News |
|
| Price Data |
| Gold Price |
|
| Downloads |
Lily & Barbrook Mining Complex
LOCATION OF THE BARBROOK MINE
Located adjacent to the Lily Mine, Barbrook provides logical operational and logistical synergies.
Lily Mine and Makonjwaan plant in relation to the Barbrook Mine
PLANNED UNDERGROUND MINING AT THE LILY MINE
Since 2005, more than 26,000 m of diamond drilling has been completed for mineral resource estimation, which probed to depths of between 600 m and 700 m below surface. Primary portal development for the proposed underground mining operations commenced in July 2007 and a final bankable feasibility study (“BFS”) was completed in early 2008. Full conversion from open pit extraction to underground mining took place in the 4th quarter of 2008. By benefiting from economies of scale, the mine will be a low cost producer.
The BFS conducted by Turgis Consulting (Pty) Ltd. (“Turgis”), established the viability of bulk-mining the Lily Zone from underground operations at low operating costs, estimated to be US$34 per tonne.
A gold price of US$800 per ounce (ZAR:US$ exchange rate of 7:1) was used for revenue calculations in the discounted cashflow analysis. Based on these factors, and assuming no changes in labour rates, the geological model, gold prices and other assumptions, Turgis projected that the Lily underground mine is expected to produce 44,000 ounces of gold annually for projected revenues of US$422.9 million requiring a projected capital expenditure of US$70 million over the assumed 14 year mine life.
Lily Mine - Vertical Projection (looking North) Showing Ore Body and Proposed Mining Plan
BENEFITS PRESENTED BY THE BARBROOK ACQUISITION
The acquisition of Barbrook was primarily motivated by the opportunity to secure a second-hand plant in good condition for processing Lily Mine’s underground ore, rather than construct a new plant as described in the BFS.
The Barbrook Mine plant is located closer to the Lily Mine than Lily’s current Makonjwaan plant (11km saving on ore transportation) and has greater capacity. Refurbishment of the plant has commenced and will present significant operational and cost benefits for EGI. Whereas the new plant proposed in the BFS was designed to process 40,000 tonnes per month, the Barbrook plant will be capable of treating 30,000 tonnes per month after refurbishment.
This reduction in the plant processing capacity has resulted in Eastern Goldfields revising the BFS underground mining plan to cater for a reduced tonnage throughput. Consequently, Eastern Goldfields has revised Lily’s forecast underground gold production from 44,000 oz per annum (as per BFS) to 35,000 oz per annum (as per the current production plan) over a 17 year life of mine.
The purchase of Barbrook resulted in an effective saving of US$15.0 million on the construction of a new processing plant at Lily as determined in the BFS. By refurbishing the Barbrook plant, at an estimated cost of approximately US$5 million, Eastern Goldfields will be able to treat Lily’s underground ore at least twelve months earlier than had a new plant been constructed. There is also no longer a need to construct a new tailings dam as proposed in the BFS.
BARBROOK RESOURCE ESTIMATES
Mineral resource estimates are based on data gained during the previous periods of operation, mining and exploration at Barbrook and are calculated as containing between 6.77Mt at an in-situ grade of 5.17 g/t (1.13 Moz) to 400m below current workings and 11.21Mt at an in-situ grade of 5.56 g/t (2.0 Moz) to 1 000m below current workings.
HISTORY OF THE LILY MINE
The Lily Mine is a case example of how a small, dormant, old greenstone gold mine was systematically re-investigated from a different perspective to the conventional mining approach, revealing an economically viable, bulk mineable ore body which extends for at least 2000m along strike and remains open-ended at depth to in excess of 700m below surface.
Some 100,000 oz of gold has already been mined from the Lily Mine, about 80% of which was extracted from open pit operations since 2000. The Lily Mine ore is free milling (i.e. non refractory) and high gold recoveries (>90%) are achieved.
2 Level Adit Entrance to Underground Operations in Ore Zone within Western Highwall of Main Pit
