Importantly, the recovery of gold from this shallow clay material has a potentially significant positive impact on the economics of a starter open pit at West Kalkaroo.
"These excellent cyanide leach test results are vitally important to our continuing assessment of a smaller scale start-up open pit mining strategy at West Kalkaroo," chairman Dr Bob Johnson said.
"This clay material will not require crushing or milling and contains no significant coarse fraction. The shallow gold mineralisation, at depths of only 25-35 metres, which we now know is readily recoverable from these tests, could provide an early cash flow.
"It could potentially cover a substantial portion of the overburden removal costs for the starter open pit, hence reducing the start-up project risk."
The testwork was carried out on representative composite drill samples collected during an aircore drilling program, which is continuing to assess this Tertiary clay gold resource within the confines of the first year conceptual open pit design.
To date, 34 aircore holes have been drilled with many assay results pending.
Havilah had carried out aircore drilling to assess the Tertiary cover sequence where previous drilling had occasionally intersected gold in a distinctive more organic rich, darker coloured basal part of the sequence, but which was not included in the scope of previous Feasibility Study work.
This gold mineralisation appears to form a "mushroom cloud" halo lying above and separate from the main bedrock Kalkaroo copper-gold resource.
In order to assess the gold recovery in this material, bottle roll leach tests using sodium cyanide reagent were carried out by ALS Metallurgy Services in Adelaide on two representative samples composited from two drillholes.
The individual one metre drill samples were composited together and the composite sample was then riffle spilt and re-assayed.
It is notable that the composite sample re-assays, which are slightly higher grade than the original assays, are likely to be more representative of the true gold grades in the interval.
One kilogram of each composite sample was bottle rolled in cyanide solution and sampled five times during a 48 hour period. For both tests results indicate that 80% recovery of gold occurs in 8 hours, which is comparatively rapid. No significant increase in gold recovery was achieved after that time.
This consumed low levels of cyanide and the 80% recovery rate appears to be achievable in a conventional CIP gold plant. It is possible that better dissolution of the clays may even improve recoveries.
Kalkaroo 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.
The free milling, soft gold cap contains 446,000 ounces of gold with better than 97% recoveries while 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.
The Life-of-Mine strip ratio of 3.2:1 allows for 5% dilution of all grade blocks while the optimised open pit to 200 metres depth captures roughly 80% of the current total resource.
Free digging material occurs to about 120 metres, or roughly the top of the chalcopyrite zone and development capital cost is estimated at approximately $500 million.
The company is also building the case for a central processing plant at Kalkaroo that could take gold and copper material from known resources such as Portia, North Portia and Mutooroo and potential future resources such as Wilkins and Eurinilla.
This would avoid costly duplication of processing facilities and infrastructure and simplify the permitting requirements for each site.
The confirmation that the near-surface clay gold mineralisation can readily produce gold is a strong positive by reducing start-up project risk and potentially allowing the company to enjoy early cash flow.
This adds substantial value to the project and could provide an uptick to the company's share price as assay results from the aircore drilling are released. A further boost made come from defining a resource to this near-surface gold mineralisation.
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