PERTH (miningweekly.com) – Mining has started at Excelsior Gold’s Zoroastrian Central openpit mine, within its Kalgoorlie North gold project.

The ASX-listed company said on Tuesday that the first Zoroastrian ore was hauled to the Paddington mill earlier in April, following the conclusion of initial start-up mining from the three small satellite pits to the south of the Zoroastrian mineralised zone.

Excelsior currently had an ore treatment agreement in place with gold miner Norton Gold Fields, under which a minimum of 500 000 t/y of Excelsior’s ore would be treated at the Paddington mill, over the next five years.

To date, Excelsior has received some A$6.05-million from its first four months of ore processing from the Castlereagh, Jackorite and Big Blow South satellite pits. A further A$7.78-million was potentially owing as second tranche payments from the ten batches of ore delivered and processed from the satellite pits, once Norton completes final grade and recovery determination and processing and haulage costs were estimated.

Excelsior MD David Hamlyn said that Excelsior and Norton were now assessing the limited data received to date from laboratory processing of the satellite ore samples to check the laboratory specific assay procedures against the accuracy of grade and recovery data recorded.

Initial results have exposed some laboratory specific assay procedural issues which could have affected the accuracy of grade and recovery data, he added.

The companies’ metallurgical teams were now working with the laboratory to resolve the procedural inconsistencies which could potentially impact on the reliability of the final recoverable gold determination.

Until this review process was completed, the companies have agreed to apply grade factoring of between 80% and 90% to the mine claim grades, to align first tranche payments with preliminary assay results received from the first ore batches.

Hamlyn said that the review of the processes would potentially lead to streamlining of the laboratory procedures and a marked improvement in turnaround time for the results.

“This will ensure that as mining, delivery and processing volumes ramped up from Zoroastrian Central, both parties would be satisfied that assay and laboratory procedures, subject to the milling agreement, set the right precedents for determining final revenue calculations for ore batches.”

“As a new gold producer in Western Australia’s Easter goldfields, we have taken some time to perfect the all-important sampling and recovery process overall, but this is essential as we make the transition from a start-up gold mining operation of around 9 000 oz to our 2016 production target of around 40 000 oz of gold,” Hamlyn said.