Red Mountain Mining's (ASX: RMX) shares are expected to open higher after delivering some impressive metallurgy results, which include a 97% gold leach recovery from a South West Breccia resource sample at Lobo.
The Lobo prospect is within the Batangas Gold Project, located in the Philippines.
The company demonstrated the very high recoveries from a composite sample grading 8.8 g/t gold, with the recoveries achieved through fine grinding then standard Carbon in Leach (NASDAQ:CIL) testing of the resource material.
Providing a further boost for Red Mountain, petrography on the recently discovered 34.4 g/t gold from the Trench 7 intersection of: 2 metres at 31.1g/t gold, has located free gold and sulphide associated gold.
This is likely to respond to metallurgical testing in a similar way to nearby South West Breccia via fine grinding and CIL processing.
Jon Dugdale, managing director, commented: "Everything is coming together now at Batangas.
"We already have substantial outcropping resources from surface, new high-grade discoveries ready to drill and now this excellent metallurgy demonstrating that very high gold recoveries are achievable through on-site processing.
"We can now complete our scoping studies, targeting a low cost gold operation."
Batangas hosts Indicated Resources of 2.76 million tonnes at 2.3g/t gold for 208,000 ounces and Inferred Resources of 3.02 million tonnes at 2.1g/t gold for 200,000 ounces.
Combined this is 5.78 million tonnes at 2.2g/t gold for 408,000 ounces.
Up to 98% recovery from Kay Tanda Resource
Other testing of an oxide composite sample grading 2.1g/t gold and 44.6g/t silver from the Indicated Resource at Kay Tanda (West), at the Archangel Prospect.
This indicated very high gold recoveries of up to 98.2% for a fine grind and 97.4% for a standard grind size (75 micron) then Carbon in Leach (CIL) testing.
Archangel is also within the Batangas project.
Metallurgical test work
The metallurgical test work was conducted by Minercon Laboratories (non NATA registered) based in Manila, the Philippines.
The results have been critically reviewed and interpreted by Jamie Beresford, a metallurgist of 27 years' experience withSedgman Limited.
Sedgman are completing scoping studies on a proposed gold processing treatment facility on the Batangas Gold Project.
These latest impressive metallurgy results further build the case that Lobo could be a low capital start-up, which would allow Red Mountain to get into production within a short time frame.
The cost potential comes from the recent high-grade discoveries at surface including 110.9g/t gold, which are therefore likely to be very low cost to mine.
The high recoveries could further maximise revenue from any processed material.
Further improving economics is the low cost environment of operating in the Philippines, along with good access to the project.
Key catalysts in the near term include:
- Scoping Study within the next two weeks.
Jon Dugdale is presenting at "Stars in 2014 Series" in Sydney. CLICK HERE for registration details.
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