PERTH (miningweekly.com) – Gold miner Phoenix Gold on Tuesday announced that it would suspend operations at its smaller mining projects, in order to focus on its joint venture (JV) agreement with fellow-listed Norton Gold Fields.

Phoenix is developing the Castle Hill Stage 1 project, near Kalgoorlie, in a JV with Norton, with the project expected to recover about 142 000 oz of gold over an 18-month period. Norton will fund all up-front capital development.

“Core business for Phoenix has always been the development of the Mick Adams and Wadi projects with Norton that can deliver significant cash flow and the heap leach with a current net present value of A$41-million,” said Phoenix MD Jon Price.

Mining at the Kintore West project would be completed by the end of this month, with milling set to continue into the June quarter.

Price pointed out that selective mining of high-grade vein sets within a lower-grade system more amenable to bulk mining had resulted in lower mined grades at Kintore West.

Furthermore, drill and blast performance at the mine was poor, increasing mining dilution, which has further compounded the issue.

“While the grade at Kintore has been lower than expected, we remain focused on improving grade performance to the completion of the mine in April and milling in the June quarter,” Price said.

Meanwhile, Price noted that plans to mine additional projects such as the Burgundy, Red Dam and Nazzaris deposits, would remain under review pending the outcome of the Norton JV, and cash flow from the Mick Adams and Wadi openpit developments.

In addition to the mill feed, some 12 000 oz of heap leach feed had been mined at Kintore West and stockpiled, and would be made available for the heap leach project development.

A definitive feasibility study on the heap leach operations had suggested that the project could deliver 191 900 oz of gold, over an initial seven-year mine life, with ore sourced from the lower grade stockpiles mined from the Mick Adams-Kiora, Wadi, Kintore, Castle Hill Stage 3 and Burgundy openpits.

The heap leach operation would require a capital investment of some A$34-million, and Phoenix said on Tuesday that the company was in the midst of project financing discussions.