- Hicks 4 and Spearpoint open-cut mines on the Karouni Project will be exhausted of high-grade ore in the next couple of months.
- Troy is ramping up its activities on the Smarts Underground prospect for ore production, once Hicks 4 and Spearpoint run out of ore sources.
- Smarts Underground has a gold potential of 290,000 ounces of gold, and the Company is engaged in completing the PFS and Ore Reserve works.
- Troy is planning to approach the development of the Smarts underground in two stages to minimise the capital requirement.
With two of its mines set to run out of gold ore in next few months, Troy Resources (ASX:TRY) has decided to shift its focus to the rapid development of its Smarts Underground prospect.
Troy, in its latest market update of 17 May 2021, informed that the primary source of ore delivered to the processing mills was extracted from the Hicks 4 open-cut mine. Having churned out supplies for more than 15 months, the higher-grade ore has been used up and what is left is a relatively low grade ore. Which if continued to be mined, will impact the profitability of the operations.
As a result, Troy has decided to cease the mining activity from the Hicks 4 mine once the high-grade ore is exhausted. The modest estimates suggest that the mine could support the operations till mid-June or early July 2021.
Apart from Hicks 4, the Spearpoint open-cut is also supporting the current mining operation and will cease to produce. Hence, the Company has forecasted production of 1,909 ounces of gold for the month of June, which is significantly lower than the May forecast of 2,400 ounces.
Troy had already started working on Smarts Underground development to replace the ore from Hicks 4 and Spearpoint. It will be the primary source of mill feed on the Karouni Project. Exploration works have been underway on the prospect for quite some time, and the drilling intercepts results have indicated a significant gold presence in the prospect area.
Smarts Underground will serve as a primary source of mill feed in the upcoming months. The prospect holds a Mineral Resource of 3 Mt @ 3.3g/t Au for nearly 290,000 ounces of gold.
Troy is working on the Prefeasibility Study (PFS) of the tenure. Reserve calculation, economic assessment and declaration of Ore Reserve are scheduled for later as more holes were required to be drilled to churn out the required set of data.
Four diamond holes were drilled during the March quarter to aid in the PFS and Ore Reserve. Encouraging intercepts were received and are shown below in the table.
Long-section of Smarts Underground showing drill hole location and assay results (Image source: Company update, 18 March 2021)
More on project: Troy Resources (ASX:TRY) advancing on production & exploration of gold on flagship Karouni Project
Strategy for development of Smarts Underground
Troy has identified the capital cost and delivery schedule of Smarts Underground. Operating cost estimates are being finalised, while the preferred mine plan involves bulk mining to get the maximum gold production.
To minimise the capital requirement during the initial stage of development, Troy is planning on a two-stage development approach. The approach will involve the initial development of approximately 800m to the first ore zone to produce 30,000 ounces. The revenue generated will be used for the further development of the mine.
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The PFS and Ore Reserve announcement will be made shortly as works on them are near to completion. The regulatory permit application has already been sent to the authorities. The Mines Department of Guyana is taking more than normal time to analyse the applications as this is the first underground mining project in the country.
TRY closed at $0.045 on Friday, 28 May 2021, with a market cap of AU$33.33 million.