PERTH (miningweekly.com) – An updated optimisation study into the Fortitude pit, at ASX-listed Matsa Resource’s Lake Carey gold project, in Western Australia, has shown that the pit could produce a potential cash surplus of A$95-million over a four-year period, based on a 600 000 t/y processing plant.

Matsa on Monday reported that the updated study expected mine production to reach some 132 000 oz of gold, at 1.6 g/t, up from the 58 000 oz previously estimated, based on 2.7-million tonnes of ore production, rather than 1.1-million tonnes of ore.

The optimisation study was driven by a significant increase in Fortitude’s mineral resource estimate, which is now estimated at 489 000 oz, at 1.9 g/t gold, Matsa told shareholders.

Operating cash costs for the operation have now been estimated at A$1 570/oz, up from the previous estimate of A$1 483/oz.

“This is a fantastic result, Lake Carey just keeps getting better and whilst more work will improve the economics of the Fortitude mine, on face value it alone now justifies the mill strategy,” said Matsa executive chairperson Paul Poli.

“The Devon and Fortitude openpits alone could now provide collective positive cash flows of A$140-million to A150-million and with ongoing exploration in this great project, I’m very confident we can continue to build on this result.

“This study was completed using a gold price of A$2 400/oz for the optimisation and the results have effectively doubled the mine life and gold production. What’s also really pleasing is that 95% of the ounces in this bigger pit are in the measured and indicated categories. I’m also very confident we can improve on this projection with the lower cost structures you would expect from a larger mill than the 600 000 t/y currently envisaged and I expect the larger pit should also provide an improved scheduling and cost structure scenario,” said Poli.

“The exploration potential at Lake Carey is significant. Importantly, we’ve already commenced underground studies at Fortitude; if we can add an underground component to the Fortitude openpit this could be very interesting indeed.”

Scenario modelling for a 600 000 t/y, 800 000 t/y and 1-million-tonne-a-year processing rate is now under way, along with updated feasibility and cashflow models.

Matsa will also be conducting relevant study work associated with the construction and management of a processing plant at Fortitude, and would work to amend the existing mining proposal and project management plan to capture larger mining operations and a potential processing plant.