The new resource, estimated by Mining One, comprises a total indicated and inferred resource of 3.8 million tonnes grading 5.8 grams/tonne (g/t) gold for 704,000 contained ounces. It represents a comprehensive update to the previous JORC 2004 resources for the mineralisation below the final open pit design.
The resource includes the results of geotechnical drilling conducted in 2015 plus all resource drilling since 2003. A nominal cut-off of 1.0 g/t has been applied compared with a 2.0 g/t cut-off grade which was used for interpreting the previous resource.
The lower cut-off reflects significant recent advances in Red 5’s understanding of the grade distribution and structural controls on Siana mineralisation, including an improved understanding of the ore body’s characteristics developed from two years of open pit mining.
This is expected to result in a number of benefits including a more robust underground mine design, greater technical confidence in the resource’s continuity and the potential to extra more tonnes per vertical metre.
The indicated resource has increased to 3.3 million tonnes @ 5.2 g/t for 551,000 contained ounces at a 2.4 g/t cut-off, which represents a 52% increase compared to the previous indicated resource of 359,000 ounces.
A revised open pit mining strategy has been implemented at Siana following completion last year of a detailed technical study. The new mine plan is forecast to recover about 181,000 ounces from July 2015 via a progressively staged cut-back of the east pit wall top allow the open pit to be mined to a final depth of about 180 metres below surface.
The revised strategy is designed to optimise extraction of open pit reserves over the remaining pit life to maximise cash flows while mitigating geotechnical risks and striving to preserve the integrity and safety of the open pit operation. If the underground study identifies a viable mine plan cash flows generated by the open pit operation will fund the underground mine development, which is set to commence in the second half of 2016.
The objective is for Siana to transform to a long-term underground operation with the completion of open pit mining at the end of 2017.