Regis Resources Limited (ASX: RRL) presented an update on its Rosemont Gold Project on 15th April 2019. In the update, Regis Resources mentioned that the Rosemont underground mine is underway, and a Pre-Feasibility study conducted on the Rosemont Gold Project increased the mineral resources at the prospect, which in turn, delivered higher ounces and lower AISC.
Rosemont Underground Mine:
Regis mentioned that it commenced the development of the underground mine at the project site. As per the company, the new underground mine will be a part of the open pit which the company operates at present, to exploit an initial underground mineral resource of 1.4Mt @ 5.1g/t Au for 230-kilo ounces of gold.
The company initiated the portal development at the southern end of the Rosemont Main open pit in February 2019, with the mine decline currently advanced to over 150 metres. As per the company’s estimation, the first ore will be mined from the operations in the September quarter of the year 2019.
Mineral Resource Estimation and Pre-Feasibility Study (PFS):
Regis Resources mentioned that it used the updated Mineral Resource as a basis for the pre-Feasibility Study, and currently the Mineral Resource is at 1.7Mt at a grade of 5.6g/t Au for 314,000 ounces of gold, up by 37% as compared to the previous Mineral Resource estimation completed by the company in March 2018. As per the company, the updated Mineral Resources includes an Indicated Mineral Resource estimate of 0.9Mt @ 5.5g/t Au for 169,000 ounces which is subjective to the maiden ore reserve.
The significant mineral upgrade provided an impetus to the company to further proceed with extensional and infill Reverse Circulation (RC) and Diamond Drilling (DD). As a result of subsequent drilling after the initial resource estimation, the Rosemont Central Zone demonstrated an Inferred Mineral Resource of 0.2Mt @ 7.5g/t Au of 50-kilo ounces of gold.
Entech Pty Limited completed the independent resource estimation using the Ordinary Kriging estimation technique in accordance with the JORC 2012 Code and Guidelines.
The updated Mineral Resource highlighted three separate zones for extraction, i.e., Rosemont South, Rosemont Central, and Rosemont Main, for which the company commenced the mine development.
As per the company, the Maiden Ore Reserve for Rosemont Underground is estimated at 0.6Mt with 6.4g/t Au for 123,000 ounces of gold, based on an economic evaluation of Indicated resource material only.
Regis Resources mentioned that Mining Plus, an independent mining consultant, completed the PFS, Mining plus undertook the completion of resource definition drilling at Rosemont Central and extensional and infill RC and DD.
As compared to the Mining Study conducted by the company in August 2018 the current pre-Feasibility Study increased the diluted mine grade to 3.9g/t from 3.7g/t of gold.
PFS increased the overall gold production by 230-kilo ounces of gold, as compared to 214-kilo ounces during the Mining Study. The pre-Feasibility Study also decreased the AISC to $1,120 per ounces, as compared to the AISC of $1,154 per ounce during August 2018.
High gold production is important for Regis as gold production and prices impacts the financial strength of the company.
The share of the company closed the day’s trading at A$4.980 (as on 15th April 2019), down by 0.994% as compared to its previous close.
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