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Hill End Gold Study Is Positive For Hargraves Gold Project In NSW

Hill End Gold (ASX: HEG) has completed a pre-development study that highlights the low capital and operating costs of $15 million and less than $1,000 per ounce respectively of its Hargraves gold project in New South Wales.

This capital cost is expected to be paid back within the first year of operation while the operating cost is less than the industry average of $1,170 per ounce.

The study also found the project could deliver base case production of 100,000 ounces of gold over four years and recover gold grades of 2.3 to 3,3 grams per tonne gold from two open pits on the Big Nugget Hill resource.

Hill End noted the positive results justify it progressing the project towards a Feasibility Study.

A Conceptual Project Development Plan, therefore, will shortly be presented to the New South Wales Department of Trade & Investment, Resources & Energy to initiate the process required for obtaining a Mining Lease.

Hargraves Preā€Development Study

The study into the development of the Big Nugget Hill Deposit at Hargraves was completed with the assistance of external consultants.

This found that the planned Central and South open pits are expected to produce 1.2 million tonnes of ore at 2.9 g/t gold for 100,000 ounces of gold.

Mining at 300,000 tonnes per year provides average annual production of 25,000 ounces. Waste to ore ratio is about 11:1 over the life of mine.

Metallurgical test work has also indicated that crushing to a relatively coarse grainsize (0.5 mm) followed by simple gravity treatment provides excellent gold recovery of between 85% and 90%. The grade of gravity tailings will be less than 0.15 g/t gold.

Process design studies indicate the processing circuit can be built at a very low capital cost using the company's existing plant and additional used equipment.

Capital costs will also be controlled as neither whole ore flotation nor cyanidation is required. This also reduces any potential environmental impacts minimised.

Total operating cost is estimated at less than $1,000/ounce (including capital recovery).

Opportunities exist to increase the resources at Hargraves by extensional drilling of the Big Nugget Hill Deposit and exploration drilling at nearby prospects including the Meroo Prospect. Success would enhance the overall project's economics.

Results received in January this year from drilling at the North Big Nugget Hill Prospect had increased the strike length to 400 metres north of the existing 221,000 ounce resource.

This also indicated the North Big Nugget Hill Prospect is a zone of significant shallow gold mineralisation at least 400m long and over 150m deep. It is interpreted to continue for another 800m along strike.


The pre-development study is a positive for Hill End Gold as it progresses towards a Feasibility Study for the Hargraves Project.

Capital costs of just $15 million also presents an extraordinary point of difference for the company in the current cost over-run environment, allowing it to proceed with development of the project without excessive dilution of capital or giving up large stakes in the project.

In addition, there is signficant potential increase the resources at Hargraves by extensional drilling of the Big Nugget Hill Deposit and exploration drilling at nearby prospects which would enhance the overall project's economics, further.

The positive outcome of the preā€development studies justifies the Company progressing to a Feasibility Study. There are significant milestones ahead for the company, today's results of the study are accretive for Hill End which has a market cap. of around $6m.

Hill End had $2 million in cash as of 31 December 2012.

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