Lachlan Star (ASX: LSA) has not only delivered a 20% boost in gold production, but also some significant drill results from the CMD mine in Chile.
What's so important about the latest near surface broad hits is that the grades are well above the reserve grades at the active adjacent pit - providing the highly likely scenario of increased ore that can be processed.
Mick McMullen, chairman, told Proactive Investors today that the current resources only include assays up to the end of March, with the recent flow of new results not included in the resource - which will both upgrade the category, and increase the ounces contained.
Highlights from the latest round of assays located immediately north of the currently mined Toro 6 pit are:
- 29 metres at 1.76 grams per tonne (g/t) gold from 25 metres;
- 55 metres at 1.01g/t gold from 123 metres;
- 10 metres at 3.35g/t gold from 16 metres; and
- 30 metres at 1.30g/t gold from 11 metres, including 6 metres at 4.06g/t gold.
Lachlan Star said the results are significant as they demonstrate the presence of a zone near surface and relatively high grade Manto mineralisation adjacent to an active mining pit.
Importantly for Lachlan Star and investors - after the company has aggressively explored the mine which was acquired just six months ago, the drilling results are starting to flow as the back log of drilling, sampling and assaying is cleared.
The latest results are supported by the 20% increase in gold production to 10,134 ounces during the June quarter, providing gross revenues of over US$15 million based on a spot gold price of US$1500 an ounce.
The month of June produced 4250 ounces - the most for a month since acquisition.
The CMD Gold Mine
Lachlan Star has a JORC Probable Reserve of; 5.8 million tonnes at 0.8g/t gold for 157,000 ounces.
The total JORC Resource is 1.4 million gold ounces.
CMD is an open pit heap leach gold mine that commenced production in 1995 and has historically produced around 830,000 gold ounces.
The company has an unhedged production of around 45,000 gold ounces annually.
In the March 2011 quarter the company produced 8,348 gold ounces at a C1 cash cost of US$840 an ounce, but importantly two-thirds of the ore mined for the period was outside the Reserve (10% of ore from Inferred Resource).
Originally published at http://www.proactiveinvestors.com.au/companies/news/17922/lachlan-star-gold-production-jumps-20-to-10134-ounces-in-the-june-quarter-at-cmd-mine-17922.html