Regis Resources Limited (ASX: RRL) confirms its approval for development of an underground mining at open pit gold mine in Rosemont. The board decides to plough money into the expansion of existing Rosemont Gold Project running since last 5 years after having the detailed mining study of maiden underground resource. The combined open pit and underground pit might deliver 10.3 million tonnes of ore while development work will start soon at the back of ordering of long lead capital items and underground mining contracts. However, the updated Mineral Resource Estimate (MRE) is expected towards completion within the same period. The underground drilling has been slated to exploit the expanded operations in order to capture underground Mineral Resource Estimate of 1.4 million tonnes at 5.1 g/t gold for 230,000 ounces of gold, at Rosemont. March 2019 quarter has been earmarked for the portal development in the southern end of Rosemont Main and the processing of underground resource is expected to begin in the December 2019 quarter. The estimated total cost for Rosemont open pit and underground operations is derived to be $1,015 per ounce of gold produced in fiscal 2019.
Despite rigorous review and analysis, expansions reports indicated company’s low level of geological confidence in relation to inferred mineral resources. Based on its past geological and metallurgical experiences, board estimated the uncertainty of digging out the indicated mineral resources or achieving production targets.
As at 31st March 2018, Rosemont open pit Ore Reserve produced total of proved and probable gold metal of 356,000 ounces while total MRE for the same period amounts to 924 koz of gold metal.
The above update seems to be overlooked by investors as RRL stock continues to fall by 2.3% to $4.24 as at August 03, 2018, while the sector itself is down on recent price movement.
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