Crater Gold Mining’s flagship Crater Mountain project is set to become PNG’s newest gold mine since Hidden Valley following lodgement of a Mining Lease Application for the High Grade Zone (HGZ) of the project. This could expedite production to begin as early as September this year.

The application, lodged with the PNG Minerals Resources Authority, covers Crater Mountain’s High Grade Zone, an area containing high grade gold where local artisanal miners mined an estimated 15,000 ounces between 2005 and 2012 using rudimentary means.

The company has been exploring the HGZ since August 2013 through the development of an underground adit and cross cuts. This development has passed through a 15 metre-wide zone of intense brecciation containing several narrow gold bearing mineralized structures correlating well with the surface artisanal workings. This development has been designed to allow for the early commencement of production once a Mining Lease is granted.

The very high grades of coarse free gold mineralization in these structures will support a small, highly selective narrow vein mining operation requiring simple mining infrastructure and recovery of gold by gravity separation without the need for complex processing technology. Mining will be carried out underground by hand held mining methods at a monthly rate of about 1000 tonnes. A process plant has been sourced in Africa especially designed and built in modular form for simple installation and ease of operation.

Crater Gold’s managing director Greg Starr says that fast tracking gold production remains the company’s priority. “We are excited to be progressing the rich HGZ to production, as this will generate strong cash flow to assist ongoing development activities. We believe that gold can be extracted from the HGZ via a simple process that requires modest capital with low operating costs. Our view is that first year production of 10,000 high grade ounces is achievable.”

Subject to the timing of the grant of the Mining Lease, gold production is expected to begin in the third quarter of 2014.

To date, exploration has focused at the northern end of Crater Mountain’s Nevera prospect where three zones of gold mineralization have been identified – HGZ and Mixing Zone, as well as deep porphyry copper-gold potential.

While the current focus remains on the HGZ, the company also has the JORC-compliant inferred resource of 24 million tonnes @ 1.0 grams/tonne of gold for 795,000 ounces at the Mixing Zone. Anticipated positive cash flow from mining the HGZ will be channelled into further testing of the Mixing Zone and into evaluating the porphyry copper-gold potential.
www.cratergold.com.au

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