Mutiny Gold: Is Deflector One Of The Best Undeveloped Orebodies In Australia?
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Seeking Alpha Analyst Since 2009
Mutiny Gold (ASX: MYG) continues to unleash the potential of the Deflector Gold Deposit in Western Australia, with the latest positive news flow bonanza grade gold strikes - which are from the drilling program completed in March.
The importance of the discoveries is not just the high grade, but the fact Deflector has been extended down-dip, along with the confirmation of mineralisation in both West and Central Lodes.
This leads to the outcome of providing confidence in the resource targets allowing the Mutiny team to accelerate exploration planning.
New discovery highlights from the Central Lode at Deflector include:
- 2 metres at 57.1 grams per tonne (g/t) gold and 0.2% copper from 92 metres;
- 5 metres at 41.8g/t gold and 0.3% copper from 218 metres;
- 4 metres at 30.7g/t gold and 0.9% copper from 146 metres;
- 5 metres at 23.9g/t gold and 0.5% copper from 162 metres; and
- 2 metres at 22.7g/t gold and 1.0% copper from 104 metres.
The results will be incorporated into the revised resource estimation, which will be released in the September quarter of 2012.
John Greeve, managing director, said that the continued discovery of high-grade gold and copper is increasing the company's confidence in the asset.
"We look forward to releasing a new resource model and hence a new LOM production profile.
"The distribution of the gold ounces-plus results across the entire length of Deflector shows that we really have one of the best undeveloped orebodies in Australia."
Adding to the future development potential of the deposit, are results with elevated copper levels from diamond drilling to the north of the Deflector Fault at West Lode, with new discoveries including:
- 2 metres at 38.8g/t gold and 0.5% copper from 211 metres;
- 2 metres at 20.6g/t gold and 2.2% copper from 201 metres;
- 5 metres at 10.3g/t gold and 1.1% copper from 209 metres; and
- 2 metres at 13.0g/t gold and 3.1% copper from 163 metres.
These assays and their locations in West Lode have added a potential block of ore 200 metres in length and 100 metres in height to the underground mine shape, and considering the grades ranging up to an over 1 ounce per tonne, it would be expected that Mutiny will deliver a substantial upgrade in the upcoming resources and reserves.
Not to be forgotten were the very impressive discoveries from earlier in the year, such as:
- 3.3 metres at 79g/t gold and 10.5% copper from 62 metres; and
- 2 metres at 24g/t gold and 2.4% copper from 234 metres.
Repetition of mineralised intersections
Worthy of note is the repetition of mineralised intersections in some holes, delineating a number of parallel lodes present at depth within the deposit.
This will add flexibility in the mining sequence and has the potential to add tonnes per vertical metre to the deposit.
Deflector - on the road to development
Mutiny has developed the timeline to commence mine development in the second half of 2012 leading to an open pit mining operation at Deflector, followed by underground mining after two years.
Deflector has a resource of 3.4 million tonnes at 4.9g/t gold for 530,000 gold ounces, 0.85% copper for 29,000 tonnes and 5.7g/t silver for 620,000 ounces.
Measured and Indicated accounts for; 2.1 million tonnes at 5.2g/t gold for 350,000 ounces, 1.1% copper for 22,000 tonnes and 7.3g/t silver for 490,000 ounces. Inferred is 1.3 million tonnes at 4.5g/t gold for 180,000 ounces, 0.5% copper for 6,000 tonnes and 6.2g/t silver for 130,000 ounces.
Mutiny has a target at Deflector 2.5 million ounces of gold (ranging from 1.65 million to 2.5 million gold ounces), and 40,000 to 80,000 tonnes copper.
On the milestone news front, a maiden gold Reserve is pencilled in for May, with the Definitive Feasibility Study in the first half of 2012, along with the completion of project financing around mid-2012.
The first gold pour to be from White Well will be in the second half of 2012, with the mine development at Deflector in late 2012.
Existing infrastructure provides key production component
Mutiny is a near term gold producer, and to further highlight the potential of Deflector, existing infrastructure includes a 300,000 tonnes per annum mill which has the capacity to be upgraded to 620,000 tonnes per annum - along with accommodation and offices, power plant, water, haul roads and tailings dam.
The additional infrastructure required includes a ball mill, crusher, floatation circuit, additional accommodation for up to 150 and an upgraded power plant.
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