PERTH (miningweekly.com) – Junior gold miner Excelsior Gold has started mining at its Big Blow South openpit mine, increasing ore supply to Norton Gold Fields’ Paddington mill, near Kalgoorlie, in Western Australia.
The Big Blow South mine was Excelsior’s third openpit operation at the Kalgoorlie North project.
The openpit mine would produce about 40 000 t of ore, grading 2.7 g/t gold, over the next two months. The first ore from Big Blow South would be delivered to the Paddington mill, with the first batch expected to be about 11 000 t, grading 2.8 g/t gold.
The Big Blow South ore would supplement existing ore supplies from the Castlereagh and Jackorite openpit mines, which were scheduled to deliver 25 000 t of ore grading 1.85 g/t gold and 18 000 t grading 2.6 g/t gold respectively.
First ore from the Kalgoorlie North project was hauled to the Paddington mill in December last year, under an ore treatment agreement with Norton, which would process between 500 000 t/y and 650 000 t/y of Kalgoorlie North ore, over the next five to ten years.
To date, two parcels of ore have been hauled from the Castlereagh pit, totalling 24 320 t of soft, oxide ore, at an average mined grade of 1.63 g/t gold. Excelsior has received an initial 50% payment of A$385 100 for the first batch and a A$507 600 payment for the second batch was due this week.
The ore delivered during December achieved a gold price of A$1 472/oz; however, gold produced from January onward would attract higher prices as Excelsior’s gold hedge came into effect.
The company has 40 636 oz of gold forward sold at A$1 570/oz for quarterly delivery from March 2016 to December 2017.