Mining at Crater Gold Mining’s 100%-owned High Grade Zone (HGZ) mine at Crater Mountain in Papua New Guinea is progressing. Drive development has recommenced on three gold-bearing veins delineated from previous underground development and diamond drilling carried out in 2014.
The veins are being developed at a narrow width and currently without drill and blast to minimize dilution. Additional drives will be commenced before the end of March, increasing the number of headings being developed concurrently to seven, thereby improving flexibility.
Vein material is extracted to be batch processed through existing plant comprising a hammer mill and centrifugal gravity concentrator that was used for earlier bulk sampling. Batch processing will provide continuous sampling and recovery data, apart from early gold production, and important controls for ongoing production planning.
Initial production of gravity concentrates produced will be smelted and sold in PNG.
When full capacity gold mining is reached, Crater Gold anticipates producing 10,000 ounces of gold in its first full year of operation, at an all in cash cost of below Aus$400 per ounce average over the Mining Lease term of five years, positioning the HGZ project as amongst the lowest cost producers.
As a high margin operation, HGZ will generate strong cashflows which will fund further development at HGZ mine as well as exploration activities at the company’s other assets.
While the current focus remains on HGZ, there remains potential to increase the current JORC compliant resource of 24 million tonnes @ 1.0 grams/tonne gold for 790,000 ounces at the nearby Mixing Zone project at Crater Mountain.
Crater Mountain is 50km southwest of Goroka in the Eastern Highlands Province. Formerly a tier-1 BHP asset, there has been in excess of 14,500 metres of diamond drilling to date, the majority focused on the Nevera prospect, which hosts the HGZ mine.