Name of the Project
Plutonic Dome project – K2 mine development.

Location
The K2 deposit is part of Vango’s wholly owned Plutonic Dome gold project, in Western Australia, which covers 412 km². The deposit is located in the north-eastern extent of the project, about 35 km by haul road from Billabong’s Plutonic gold mine treatment plant, in the south-west region of M52/183.

Client 
Vango Mining.

Project Description
The upgraded definitive feasibility study (DFS) on the K2 mine development within the wider Plutonic Dome gold project has further strengthened the economic robustness of the project.

The upgraded K2 DFS has assessed the economic viability of underground mining methods to extract ore from the K2 deposit, with toll treatment of ore at the nearby Plutonic processing plant, which is owned by Billabong Gold.

The proposed underground mine will be accessed through the existing boxcut, portal and decline development. 

This existing development will require some minor rehabilitation. 

It is proposed that a mining contractor will be used to extract and deliver ore to Billabong’s Plutonic processing plant. Underground trucks will deliver ore to a specified location where a surface haulage contractor will transport this material from the mine to the Plutonic plant.

The mine design includes rehabilitation of about 840 m of the existing decline before extending the decline and strike drive-level arrangement. The decline is designed with a minimum standoff of 30 m from the main ore zone. Levels are designed at 20 m level spacing (floor to floor), implying that the stopes will be about 16m high over a strike length of 37.5 m.

The selected mining method of longitudinal openstoping with pillars has been determined as the optimal method to use for the style of mineralisation and geotechnical parameters. The mining environment at K2 has been described as being relatively benign, given the good rock mass conditions and shallow depths.

Metallurgical testwork completed on K2 has determined that the ore is amenable to conventional processing methods and can be expected to yield metal recoveries of more than 90%. A metal recovery factor of 90% was adopted for the project, representing a value just below the lower end of the range reported in metallurgical testwork.

The ore processing schedule is based on delivered ore being processed when made available to Billabong’s Plutonic processing plant. The K2 desposit has total indicated and inferred mineral resources of 415 000 t grading 7.7 g/t gold. Proven and probable reserves have been estimated at 150 000 t grading 7 g/t gold.

Jobs to Be Created
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at an 8% discount rate, of $19.02-million, up from $14.87-million in the previous DFS update completed in October 2014. The project’s internal rate of return has also increased from 229% in the October DFS update to 382.07%, with a payback of 1.1 years.

Value
Preproduction capital costs are estimated at $6.4-million.

Duration
Not stated.

Latest Developments
Dampier Gold and Vango Mining have inked a farm-in agreement over the K2 mine development.

In January last year, Vango took full ownership of the greater Plutonic gold project, which includes the K2 project, after a A$6.2-million deal with Dampier.

Under the terms of the agreement, Dampier will contribute the lesser of 50% of the capital expenditure (capex) or A$3-million to the development, exploration and gold mining at the K2 deposit. The funds will be provided in tranches approved by the joint venture, with Dampier earning an interest in K2 equal to the lesser of its funding as a percentage of the capex or 50% within the two-year period from the start of the agreement.

Vango executive chairperson Bruce McInnes has said the agreement with Dampier provides a clear pathway for the funding and development of the K2 asset into production, and represents a significant point in the evolution of the Plutonic Dome project, in line with the company’s goal to develop a substantial gold mining operation.

Vango started dewatering activities at the K2 deposit in March.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Vango Mining cell +61 404 386 378 or email info@vangomining.com.