Havilah Resources (ASX: HAV) has started a carefully targeted aircore drilling program to more precisely define the gold resource of the conceptual starter open pit at the Kalkaroo copper-gold project in South Australia.
This is also designed to accurately determine the expected copper and gold production in the initial years of this mining plan at West Kalkaroo.
Ore from the low capital start-up pit could be treated in a relatively low cost processing plant that would be progressively upgraded to treat sulphide ore as the mine expanded at depth.
Initial indications from conceptual mine plan work carried out by consultant mine planning engineer Richard Buckley appear to be encouraging with further details to be released when the mine planning work is complete.
In the meantime, the current drilling campaign is designed to provide greater confidence in the resource that lies within the conceptual starter open pit mine design. All new drilling results will be incorporated into the revised mining model in order to confirm its robustness.
Previous drilling at Kalkaroo had occasionally unearthed gold at the base of the Tertiary (BOT) cover sequence where exposure of the bedrock gold saprolite zone during earlier erosion cycles had shed gold over the undulating pre-Tertiary land surface.
This had result is some strong drilling results including 3 metres at 88 grams per tonne gold, though most most results were in the 1-2g/t range. The shallowest intersection was at a downhole depth of about 25m below the surface.
Evaluation of this gold zone was beyond the feasibility study work plan at the time, which was largely focussed on copper resources.
As a result, the BOT gold occurrences were not defined to JORC standards and have not been included in any resource or mining models for Kalkaroo to date.
While any BOT gold is not likely to add significantly to the total 2 million ounce gold resource at Kalkaroo, it could make an early contribution to mining cash flow because it will be mined to access the gold and copper mineralisation below.
It could also serve to commission the gold treatment plant ahead of the main gold ore delivery from the saprolite gold cap that overlies the main copper mineralisation.
The aircore drillholes will be continued on into the underlying gold saprolite zone until bit refusal in order to complete a close-spaced drilling pattern.
Previous drillholes in this zone returned long intervals of gold mineralisation, which it is hoped will be duplicated in the new drillholes.
This included 74 metres at 1.81g/t, 60 metres at 2.23g/t, 58 metres at 1.44g/t and 78 metres at 1.4g/t.
Metallurgical studies previously reported indicate > 97% gold recoveries in this material by conventional CIL/CIP processing.
The Kalkaroo Copper-Gold Project has a Measured and Indicated Resource of 124 million tonnes at 0.5% copper and 0.39g/t gold in the main copper-gold deposit and 18.6 million tonnes at 0.74g/t gold in the gold cap on top of the copper-gold deposit.
This free milling, soft gold cap containing 446,000 ounces of gold with better than 97% recoveries offers early cash flow.
Copper and gold recoveries of up to 91% and 87% respectively are expected from the chalcopyrite sulphide material, which forms about 66% of the deposit.
Havilah will use a conventional flotation circuit to produce a high quality copper concentrate, containing 29% copper for chalcopyrite material and 34% for chalcocite material and no deleterious elements.
The Life-of-Mine strip ratio of 3.2:1 allows for 5% dilution of all grade blocks while an optimised open pit to 200 metres depth is estimated to capture about 80% of the current total resource.
Development capital cost have been estimated at about $500 million.
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