Southern Africa-focused gold producer Galane Gold has completed additional exploration at Tau, in Botswana, as part of its strategy to continue to delineate the extension of the mine at depth to further expand its potential resource.

“The decision to move to underground operations has been further supported as the exploration results continue to support our view on the extension of the Tau mineralised body at depth. I believe we can now be more than confident in saying that Tau is expected to form the backbone of our operation past our current four-year mine plan,” says Galane Gold CEO Nick Brodie.

As part of Galane’s strategy of low-risk brownfield expansion, the company has pursued underground mining at the previously mined Tau openpit. Mining at the Tau underground mine started in mid-2014.

In October 2016, the company issued a statement with regard to the structurally displaced mineralised zone referred to as the “C Reef”, which represents a potential extension of the Tau mine at depth. Brodie says the C Reef mineralisation characteristics are similar to those of the main Tau body; being a disseminated state in well bedded, silicified quartz-rich parts of the graphitic iron formation.

According to Galane Gold, the C Reef can be subdivided into two distinct geological domains – the west domain, which consists of a narrow, high-grade mineralised zone, and the eastern domain, which is a wider zone with an average grade similar to that of the main Tau body based on metallurgical testwork conducted by the company at the Mupane metallurgical laboratory.

A total of 2 308 m of C Reef-focused drilling has been completed to date, with drilling that has resulted in 31 C Reef intersections, of which 22 are within the western domain and the remaining nine are within the eastern domain. “The current drilling has been focused on the wider eastern domain with intersections in the western domain of 24.85 g/t over 3 m; and 11.99 g/t over 1.26 m.”

Brodie says the corrected drill hole intersection length of the 22 intersections on the western domain is 2.54 m at an average grade of 5.04 g/t over 120 m on dip. The eastern domain has a corrected drill hole intersection length for the nine intersections of 7.90 m at an average grade of 2.68 g/t over 120 m on dip.

In addition, further reviews of the historical data revealed that the C Reef lithology associated with the wider eastern geological domain was intersected in two reverse circulation (RC) holes drilled in mid- 2007 as part of the original Tau Deeps exploration programme by former owner gold producer Iamgold.

“The lithology intersections were at a vertical depth of 360 m below surface, equivalent to mining level 580 reduced level; which is 80 m vertical below the current deepest planned mining level at Tau.”

Operations

Galane Gold estimates that it will process about 415 000 t at an average grade of 2.5 g/t at the Tau mine this year, the company announced last month in its financial and operating results for the year ended December 31.

For the second consecutive year, the company saw year-over-year increased production and cash flows and reduced cash cost (excluding royalties). The company produced 29 354 oz of gold at its Mupane property at a head grade of 1.75 g/t.

“As I stated in the 2016 year-end press release, I expected the results in 2017 to be an improvement and they have been. “Again, we have seen an increase in ounces produced, an increase in underground production at Tau, an increase in operating cash flows and a reduction in cash costs per ounce. I am more than optimistic that we will continue this trend in 2018.”

Meanwhile, the company has entered into a loan agreement with investment company Barak Fund with respect to a $5-million secured loan facility for the refurbishment and expansion of the processing facilities and restarting underground mining operations at the Galaxy mine, in Barberton, in Mpumalanga.

In March, Galane Gold announced that it anticipates first production at the Galaxy mine in the first quarter of 2019 and the first phase of the restart of the mine to increase the capacity of the processing plant to 30 000 t/m and yearly production to more than 25 000 oz of gold at an operating cash cost of less than $800/oz.

During the implementation of the first phase, the company expects to complete a study on the second expansion phase with the objective of increasing the capacity at the Galaxy processing plant to 60 000 t/m and decreasing the cash cost per ounce with increased economies of scale.