MAJESTIC Gold expects underground development of the Songjiagou North property of its Songjiagou Gold Project in Shandong Province to be completed in about 12 months. By 30 June 2017, the company had completed 1000 metres of the 2075 metre access ramp.
|Drilling on a bench in the open pit at Majestic Mining’s Songjiagou Gold Project in Shandong Province.|
Songjiagou North project area lies immediately north of the Songjiagou open pit operation, within the project’s exploration licence boundary. The area underlain by precious metal mineralised vein structures was converted to a five year, 0.414sqkm mining licence that was granted on February 18, 2016.
The mining licence area covers a continuation of the gold mineralisation that is being developed in the adjacent Songjiagou Gold Mine. Previous sporadic exploration completed by No 3 Brigade between 2001 and 2013 outlined five discrete mineralised vein structures that comprise a non-compliant NI 43-101 resource found in a Brigade No 3 report titled ‘General Exploration Report on the Deep and Peripheral Area in Songjiagou Gold Mine, Muping District, Yantai City, Shandong Province’ and filed with the Bureau of Land and Resources of Shandong Province in 2013.
The company’s current plan for Songjiagou North property is the underground development of a 2075 metre ramp to access at least four of the five identified mineralised vein structures from six different levels.
The Songjiagou Gold Mine achieved commercial production in 2011 and was expected to produce approximately 25,000 ounces of gold in 2017, an increase of almost 25% compared to the average of the previous five years. Recent improvements to grade control and recovery, coupled with reduced costs for mining and milling, have resulted in all-in sustaining costs falling to under $900 per ounce.
Majestic has been unable to realise the full potential of the mine due, in a large part, to the lack of consistent grade control of material entering the mill after being mined in the pit. The management is limiting production to the capacity of the 6000 tonnes/day mill as the company continues to work on implementation of its grade control program, and the development of an optimised mine plan. There are also 1200 tonne and 200 tonne mills at the project.