Mt Morgans Underground Development to Commence
Monday, 28 June 2010 14:08
Mt Morgans Underground Development to Commence
- Development of an underground mine at Craic and reopening of underground mines at Transvaal and Westralia at Mt Morgans to proceed.
- Underground mining contract to be undertaken by Australian Contract Mining Pty Ltd.
- Mine Planning Study indicates robust economics delivering a minimum of 215,000 recovered ounces of gold from these three mines over five years.
- Development program to be funded through existing cash flow.
- Further exploration upside exists at the three sites.
- Mobilisation planned for early August and portal development commencing at Craic in September.
28 June 2010, Melbourne: Range River Gold Ltd (ASX Code: RNG) is to proceed with the underground mining of the Craic deposit and reopening of the Transvaal and Westralia underground mines at Mt Morgans.
A mine planning study undertaken on these projects indicates a base case of mining 1.42 million tonnes of ore at an average grade of 5.26 g/t Au to recover 215,000 ounces of Au over five years.
The upside case based on extensional exploration success at these deposits indicates a total of 306,000 recovered ounces of gold.
At A$1,200 per ounce gold price the base case would generate a pre-tax total free cash of $56.2 million and the upside case $93.3 million.
At A$1,400 per ounce gold price the pre-tax total free cash rises to A$97.4 million and A$152 million respectively.
A rising gold price and brown-field exploration success provide opportunity for further upside. A rising gold price would offer the opportunity to lower the grade of ore mined.
The Company will develop a more detailed plan to respond to the proposed Resources Super Profits Tax by the Federal Government. This plan will be based on mining high grade gold to maximise after tax cash-flow but at the expense of current life of mine.