High Grade Gold Mining Underway In Sherwood Pit
Laneway Resources Limited (ASX:LNY) has commenced a blasting programme at the high grade Sherwood deposit within the 100% owned Agate Creek Gold Project in North Queensland.
Following the first blast at the Sherwood pit there is now approximately 60,000 BCM of material, predominantly waste, ready to mine with the first ore now also exposed in the pit. Ore will be mined and stockpiled at site prior to transportation to the Carbon in Leach (CIL) processing plant at Lorena Gold Mine for processing.
The pit design and mine plan allows for two stages of cut back which has been preferred in order to optimise ore timing and maximise near term cash flow. The two combined cut back designs will allow the economic extraction in this mining campaign of 42,800 tonnes at 6.5g/t for approximately 8,950 Oz of contained gold at an overall strip ratio of approximately 11:1.
Chairman, Stephen Bizzell, said Laneway has executed a Toll Treatment Agreement with Lorena Gold Mine Pty Ltd at the operational CIL gold processing plant. The company’s ore is scheduled into Lorena’s processing plans during November correlating well with Laneway’s mining schedule.
He said Laneway anticipates the Lorena plant will yield >90% gold recoveries given its configuration with the added benefit of robust processing rates (~35 tonnes per hour) which means processing of the initial 18,000t batch should be completed in approximately three weeks.
Mr Bizzell said the company should receive payment for the majority of the gold recovered from the initial 18,000t campaign before the transportation of the ore should commence in the next fortnight with ore processing scheduled to commence mid-November.
Toll Treatment including crushing has been set as a fixed price per tonne of ore processed.
Whilst the agreement entered into with Lorena Gold Mine will allow for the subsequent batch of ore in this mining campaign to also be processed through their plant, Laneway is continuing to progress other processing plant options which may be utilised longer term for the processing of high grade ore from Agate Creek, including for the second batch of ore from this mining campaign.
Beyond this current mining campaign, the potential for further high-grade mining has also been identified with one of the larger Whittle runs generating a much larger pit shell containing 120,000 t of high grade material at 5.7 g/t Au for 22,000 Oz Au.
Other activities also continue to be progress with a view towards the longer-term, large-scale development of the project. Infrastructure upgrades, monitoring, modelling and procedures have also been implemented to allow for the collection of baseline environmental data and studies, which will be utilised as part of the expansion of on-site activities as Laneway continues the development and planning for large scale mining activities, including on-site processing at the Agate Creek Project.
The long-term aim for the Agate Creek mine is for conventional on-site processing of the larger commercial grade Mineral Resource of 471,000 ounces of gold that has been defined. Additional potential toll treatment of high-grade ore will continue to be targeted in the shorter term to provide additional cash flow to fund significant further exploration and development for the company without the requirement for equity capital raisings.
“Commencement of mining activities at Sherwood on time is a great outcome for Laneway shareholders and we will be processing ore very soon through Lorena’s mill. This means that significant revenue will be flowing to the company,” Mr Bizzell said
“The processing deal we have struck with Lorena enables payment by year end for the majority of the gold produced during this campaign. “This sets the company up well for a busy 2021 as we focus in parallel on the planning, approvals and development of the larger volume of high grade ore encompassed by the larger Whittle pit shell and then turn our attention to options for onsite processing of the almost half a million ounces identified at Agate Creek.”