Edna May is currently an openpit operations but will go underground early next year.
Gold miner Ramelius Resources has opted for underground operations at Edna May, rather than developing a large Stage 3 openpit cutback at the Western Australia-based operation.
Starting in early 2019, the company will start underground mining and ore production is expected from the start of the 2020 financial year, with an initial life of two-and-a-half years.
Announcing a development decision, Ramelius MD Mark Zeptner said on Tuesday that the decision to move underground at Edna May was not taken lightly. “After extensive studies and considering our future operations around other potential ore sources in the area, we believe this is a prudent decision that will lead to exceptional future outcomes for our shareholders.”
An underground mine will realise substantial savings on capital expenditure. Prior to the acquisition of Edna May by Ramelius, Evolution Mining spent about A$20-million on a mine portal inside the current openpit, plus some 250 m of vertical development. The September 2018 prefeasibility study (PFS) for underground development estimates upfront capital of A$5.9-million for the underground mine.
This compares with a large pit cutback that could cost about A$100-million.
“The considerable savings in group capital expenditure and the use of conservative geological assumptions gives the company added flexibility in considering other future strategic options for Ramelius,” Zeptner added.
The PFS estimates that 64 417 oz will be mined and 57 783 oz will be recovered during the underground operation’s 2.5 year mine life.
The Edna May mineral resource is below the current Stage 2 openpit, down to a depth of 450 m below the surface, where it remains open. Diamond drilling is planned to be carried out in the next financial year to extend the underground resources to depths of between 600 m and 700 m.
The Marda gold project acquisition of last week would allow additional ore for flexibility, Ramelius noted.