Name of the Project
Mount Morgan copper/gold project.

Location
Queensland, Australia.

Client
Carbine Resources.

Project Description
A prefeasibility study (PFS) completed on Mount Morgan has forecast potentially robust economics for the operations, and further improves on the results achieved in the scoping study completed in November 2014.

The PFS defines a one-million-tonne-a-year operation over a minimum eight-year mine life that includes only the processing of known Joint Ore Reserves Committee (Jorc) resources at the site and not any of the current exploration targets.

The proposed operation will produce three separate salable products – gold, copper and pyrite. Average production is estimated at 31 200 oz/y gold doré bullion, 3 200 t/y copper sulphate and 211 000 t/y pyrite concentrate.

The operation is expected to produce an average of 46 500 oz/y gold equivalent, including more than 58 000 oz/y of gold equivalent during the first three years of operations. This high production during the initial years of operation ensures a relatively quick payback of capital costs and minimises financial risk. Significant upside to mine life and production rates exist on the conversion of some or all of the exploration targets to Jorc resources.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
Capital expenditure (capex) has been estimated at A$63.3-million.

Capex is based on construction using all new equipment, including allowances for all engineering, procurement and construction management costs, excluding commissioning labour costs and contingencies.

Future feasibility studies will also assess options to reduce capital costs through further processing optimisation, leasing mobile and plant equipment, buying near-new second-hand infrastructure and rationalising other major infrastructure.

Upside exists to reduce capital costs through the full or partial use of the Kundana carbon-in-pulp plant.

Duration
Not stated.

Latest Developments
A 215% increase in the Joint Ore Reserves Committee- (Jorc-) compliant resources at the Queensland-based Mount Morgan project to 850 000 oz highlights the potential to increase the project’s mine life and production, says owner Carbine Resources.

Total indicated and inferred resources have increased to 32.7-million tonnes at 0.71 g/t for 850 000 oz, comprising an indicated mineral resource of 394 000 oz and a total inferred mineral resource that increased to 456 000 oz.

The group’s new mineral resources comprise six tailings dumps that form the tailings project, as well as 7.9-million tonnes of pyrite, 36 000 t of copper, and 49 t of silver.

Further, Carbine has reported that a definitive feasibility study, based solely on the indicated mineral resource of 394 000 oz, is on track for completion at the end of September.

Meanwhile, in conjunction with its 2016 resource estimate update, the company has updated its Mount Morgan exploration target. This update involved a detailed review of previous studies, the existing and new mineral resource estimates, all known historical drill and trench data, historical reports, plans and site photos, and a visual site inspection of all visible mine dumps.

Carbine’s new exploration target, incorporating all near-surface tailings, dumps and metallurgical slag mineralisation, is between 1.9-million tonnes and 4.9-million tonnes for between 70 000 oz and 190 000 oz of gold.

The company has noted, however, that the potential quality and grade of the exploration target is conceptual in nature, as there has been insufficient exploration to estimate a mineral resource. It is also uncertain if additional exploration will result in an estimation of the mineral resource.

The exploration target is also less than the previously stated exploration target, owing to ongoing drilling and mineral resource conversion.

Drilling is expected to get under way in 2017 to test the highest-priority exploration targets, based on the project’s potential size and location, either adjacent to the planned site infrastructure or within existing openpit designs.

Key Contracts and Suppliers
GR Engineering Services (PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Carbine Resources, tel +61 8 6142 0986, fax +61 8 9388 8824 or email admin@carbineresources.com.au.
GR Engineering Services, tel +61 7 3838 8000, fax +61 7 3838 8001 or email gres@gres.com.au.