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Last updated on April 21, 2014 at 5:21 EDT

Julie Expansion to Transform Wa Gold Project

June 19, 2013

-Higher Reserves, Higher Production and Lower Costs Expected-

Material Julie Mineral Reserve increase anticipated following:

        --  84% Mineral Resource uplift to more than 1.0Moz and 33% higher
            grade to ~2g/t Au(prev. 567,000,000oz @ 1.5g/t Au)
        --  Preliminary test work indicating 5% increase in primary ore
            recovery(from 85% in 'Stage One' Feasibility Study)
        --  Recent infill drilling of Inferred mineralisation in planned
            pits
        --  Reduced mining costs from larger scale operation at expanded
            pits

Kunche Mineral Reserve increase (on prev. 238,000oz) expected following recent infill drilling of Inferred mineralisation in
planned pit

        --  Updated Feasibility Study (due Q4 2013) targeting:
      o Higher annual production to ~100,000oz average(prev. 67,000oz)
      o Increased plant throughput to 1.3Mtpa(prev. 1.0Mtpa)
      o Increased head grade to  2.2 - 2.4g/t Au(prev. 2.0g/t Au)
      o Lower Life-of-Mine cash costs of >US$700/oz(prev. ~US$802/oz)

Other recent Project developments include:

      o Mining Leases recommended to Minister for approval
      o Water Extraction Licence granted to draw from adjacent Black Volta
        River
      o Survey completed for 161kV grid power spur line to site

“We are committed to delivering a material uplift in Mineral Reserves on
the back of the increased Mineral Resource and grade at the growing
Julie deposit.  This will underpin the repositioning of the Wa Gold
Project as a higher production, higher grade and lower cost operation.”
Azumah Managing Director Stephen Stone said.

“With the excellent support from the Ghana Government in advancing
permitting and taking grid power to site plus our positive engagement
with the local community, we believe that the Wa Gold Project could be
development-ready by the end of 2013.”

TORONTO, June 19, 2013 /CNW/ – Azumah Resources Limited (ASX:AZM
TSX:AZR) (“Azumah” or “the Company”) is pleased to advise that the
Feasibility Study update for the Wa Gold Project in northwest Ghana
(‘the Project”) is well on-track to deliver a material increase in
Mineral Reserves on the back of a substantial expansion of the Julie
deposit.  This will support the Company’s objective of establishing a
de-risked, development-ready, higher production, higher grade and lower
cost project (Table 1).

The Company is also pleased to announce that the Ghana Minerals
Commission has recommended to Ghana’s Minister of Lands and Natural
Resources that Azumah be granted two Mining Leases covering the
Project’s Kunche-Bepkong and Julie deposits. This is a major milestone
for the Project and demonstrates the high level of in-country support
for the Project, which also includes installing grid power directly to
the mine site and the granting of a water extraction licence.

‘Stage One’ Feasibility Study

The ‘Stage One’ Feasibility Study (‘Study’) delivered in August 2012
confirmed that the Project is viable and would generate a free cash
flow of ~$40M per year, after tax and royalties (refer ASX release dated 27th August 2012 and NI 43-101 report lodged
8th October 2012).

Along with validating the economic, technical and logistical viability
of the Project, the Study aimed to expedite the process for securing
Mining Leases and then an environmental (EPA) permit.

The Study was based on a 1.0Mtpa conventional gravity/carbon-in-leach
(CIL) plant located close to the Kunche and Bepkong deposits.  There
was only a minor contribution from the Julie deposit, 80km east of the
proposed plant, which at the time had Mineral Reserves of 74,000oz
(Probable: 1.0Mt @ 2.4g/tAu) comprising 17% of the global Mineral
Reserve.

Updated Study and expected material Mineral Reserves increase

Since completing the Study, the Company has announced an 84% increase in
Mineral Resources and a 33% increase in grade at Julie to more than
1.0Moz at 2.0g/t Au. Julie has become larger than the combined Kunche
and Bepkong deposits and is 30% higher grade (refer ASX/TSX release dated 15th January 2013) (Appendix 1, 2 and 3).

This, along with several other positive developments, has prompted a
major revision of the Study.  Azumah is now reconfiguring the Project
with a larger, single-stage SAG mill capable of processing 1.3Mtpa
whilst still maintaining an initial six-year project life.

Table 1 compares key Study parameters with those being targeted for the
2013 revision.  There are projected improvements in almost all Project
parameters despite the Company running its pit optimisation at a lower
gold price of US$1,200 per oz (prev. US$1,300) and a lower gold revenue price of US$1,400 per oz (prev. US$1,600).  The 30% increase in production capacity will only require an
estimated 11% increase in establishment capital costs.

Average Life of Mine (LOM) site cash costs are projected to reduce close
to US$700 per oz and closer to US$600 per oz in the first year of
operation (NB:  site cash costs are inclusive of Julie haulage costs to
the proposed plant at Kunche).

Table 1:   Summary of 2013 Feasibility Study Update Targets and ‘Stage
One’ Feasibility Study Parameters


                                             TARGETS         "Stage One"
                                        Feasibility Study Feasibility Study
                                             Update          August 2012
                                             Q4 2013

    Gold Price for Optimisations US$/oz            $1,200            $1,300

    Gold Price for Revenue       US$/oz            $1,400            $1,600

    Plant throughput (primary      Mtpa               1.3               1.0
    ore)

    Recovery (average)                %             ~91.0              92.4

    Annual production (average)   oz pa          ~100,000            67,000

    Establishment capital          US$M            ~$160M             $144M

    Site cash costs (LOM)(2)
    (pre royalties)              US$/oz              ~700               802

    Total costs (LOM) incl.      US$/oz            ~1,120             1,306
    capital & royalties

    Mine life                     years               6.0               6.0

    Project payback (post         years               1.9               2.9
    royalties & tax)

(2) LOM = Life of Mine

Mineral Reserves increase drivers

The substantial increase in Julie Mineral Resources and a possible
increase of up to 5% in gold recoveries from Julie primary ore are
expected to flow on to a material increase in the Julie Mineral Reserve
and therefore the overall Project Mineral Reserve.

The conversion to Measured and/or Indicated Mineral Resource categories,
of Inferred Mineral Resources captured in re-optimised pits at Kunche
and Julie, is also likely to increase Mineral Reserves as will
relatively lower unit mining costs arising from a more substantial
earthmoving contract at the expanded Julie pits:

1. Julie metallurgical recovery increase

Preliminary and continuing metallurgical studies on Julie primary ore,
which is estimated to comprise ~17% of total mill feed, indicate that
gold recoveries may be increased by up to 5% on the 85% applied in the
‘Stage One’ Feasibility Study.  This would be achieved through a
dedicated flotation and concentrate regrind circuit that is estimated
to cost 7% – 10% of establishment capital costs, although this will not
occur until the third year of production.

Test work indicates that it should be possible to produce a high-grade
sulphide flotation concentrate of +60g/t Au comprising 3% to 4% of the
original mass of the ore feed.  Following regrind, the concentrate
would most likely be leached through the existing, conventional CIL
circuit.

Julie comprises a series of planned open pits over an east-west strike
of some 4km. To enable confirmatory metallurgical test work to
continue, a 13-hole, 422m, combined RC and diamond core drilling
programme was recently completed to obtain additional representative
samples of Julie mineralisation, especially from the areas of expanded
resources not previously tested.

The ability to effectively concentrate Julie primary mineralisation also
presents several new and interesting options for configuring the
Project down the track, especially if the Wa East region Mineral
Resources are expanded again.

2. Reclassification of Inferred Mineralisation at Kunche and Julie

An additional contribution to the expanded Mineral Reserves is also
anticipated from Kunche where some Inferred mineralisation captured
within optimised pits was excluded from Mineral Reserves.  Recent
infill drilling has enabled it to be reclassified by Azumah’s
independent consultants as Measured and/or Indicated and to now be
included in Mineral Reserves.  Preliminary re-optimisations of open
pits indicate that this is likely to result in an increase to the
Kunche Mineral Reserves with a consequent reduction in strip ratio.

Similarly, at Julie, the reclassification of some Inferred
Mineralisation to the Indicated category, following a recently
completed and successful 5-hole, 650m RC and diamond core infill
drilling programme, is also likely to have a positive impact on
optimised pit sizes (refer ASX release dated 13(th) June 2013)(refer Figure 1).

3. Reduced Julie contractor mining costs

The expanded mining inventory and earthmoving requirement at Julie
(approximately 25Mt of combined ore and waste compared with 5Mt in the
Study) are expected to result in reductions in mining costs to levels
more consistent with Kunche and Bepkong rates.

Water Extraction Licence, grid power and community engagement progress

In addition to the recommendation to the Minister of Lands and Natural
Resources that two Mining Lease be granted over the Kunche-Bepkong and
Julie deposits, the Water Commission of Ghana has granted Azumah a
permit to extract water for processing use from the nearby Black Volta
River.

Survey work by Ghana power infrastructure provider, GridCo, for a 161kV
spur line to the Project plant site at Kunche has just been completed. 
The spur will be funded by GridCo as an adjunct to the construction of
the new Wa-Han-Tumu main line with power to be supplied by the US$790M,
400MW Bui hydroelectric scheme.  The first of three turbines at the Bui
Dam was recently commissioned.

The Company is also well advanced in its dealings with the local
communities at Kunche-Bepkong which will be impacted by the proposed
Project.  This work is being extended across to Julie.  With the Mining
Leases recently  recommended for approval, Azumah is now in a position
to commence the formal process to obtain final EPA approvals.

Feasibility Study completion and Mineral Reserve upgrade

As mentioned, several technical studies are required to be extended as
part of the Feasibility update.  This work is underway and at various
stages of progress, with the critical path item being the additional
Julie metallurgical test work. Azumah expects that revisions to the
Feasibility Study and an updated Mineral Reserve will be available in
Q4 2013.

Azumah management believes that completion of this work will place the
Project on a much stronger footing and, subject to the gold price and
funding availability, in a position where a development decision can be
made.

About Azumah Resources Limited

Azumah is an Australian-based company focused on the exploration and
development of the 100% owned, 3,100km(2) Wa Gold Project (Figure 2), which presently contains a JORC & NI 43-101
calculated Measured and Indicated Mineral Resource totalling 1.36Moz Au
and an Inferred Mineral Resource totalling 0.85Moz Au (refer ASX/TSX
release dated 15(th) January 2013).

A Feasibility Study and ‘Stage One’ Mineral Reserve was completed in
August 2012 (refer to ASX/TSX release dated 27th August 2012) (Appendix
3) primarily to benchmark the Project and so that applications for
Mining Leases could be submitted and the process of obtaining other key
operating permits commenced with the Ghana Government.  The Study was
based on a conventional 1.0Mtpa gravity/CIL gold plant to be located
adjacent to the flagship Kunche deposit.  It confirmed that the Project
is economically viable, has no technical or infrastructure related
impediments and could be expected to generate a free cash flow of ~$40M
per year after tax and royalties. 

An update to the Feasibility Study and Mineral Reserve is underway and
will reflect the increased Mineral Resource announced in January 2013
and especially the 84% growth in Mineral Resources at the Julie deposit

For further information on the Company and its Wa Gold Project please
refer to the Company’s website at www.azumahresources.com.au and www.sedar.com

Cautionary Statement

The Company has not made a production decision and its strategic plan to
develop a gold mining operation is subject to the results of an update
to the ‘Stage One’ Feasibility Study (refer ASX release dated 28th
August 2012) and other factors, some of which are beyond the Company’s
control.  The Mineral Resources disclosed herein are preliminary in
nature and include Inferred Mineral Resources that are considered too
speculative geologically to have economic considerations applied to
them to be categorised as Mineral Reserves.  There is no certainty that
the Mineral Resources disclosed herein will be realised or converted to
Mineral Reserves.  Inferred Mineral Resources captured in optimised
pits may not all be converted to Measured and Indicated Resources. 
Mineral Resources which are not Mineral Reserves do not have
demonstrated economic viability. Target, expected and anticipated
numbers contained herein are not confirmed, are not JORC or NI 43:101
compliant and are indicative only. Target Mineral Reserves implied
herein are based on preliminary Whittle optimisations using adjusted
Feasibility Study assumptions.

Competent Persons’ Statement

The scientific and technical information in this report that relates to
the in-situ Mineral Resource estimates for the Kunche, Aduane and Julie
deposits is based on information compiled by Mr Dmitry Pertel, who a
full-time employee (Manager – Resources) of CSA Global Pty Ltd.  Mr
Pertel is a Member of the Australian Institute of Geoscientists and has
sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2004
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’
and to qualify as a “Qualified Person” as defined in National
Instrument 43 -101 – Standards of Disclosure for Mineral Projects (“NI 43-101″) of the Canadian Securities Administrators.  Mr Pertel has
reviewed and approved the disclosure of the relevant scientific or
technical information contained in this announcement that relates to
the Kunche, Aduane and Julie Mineral Resource estimates.

The scientific and technical information in this report that relates to
the in-situ Mineral Resource estimates for the Bepkong deposit is based
on information compiled by Mr David Williams, who is a geological
consultant employed by CSA Global Pty Ltd.  Mr Williams is a Member of
the Australian Institute of Geoscientists and the Australian Institute
of Mining and Metallurgy and has sufficient experience which is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as
a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’
and to qualify as a “Qualified Person” as defined in National
Instrument 43 -101 – Standards of Disclosure for Mineral Projects (“NI 43-101″) of the Canadian Securities Administrators.  Mr Williams
has reviewed and approved the disclosure of all scientific or technical
information contained in this announcement that relates to the Bepkong
Mineral Resource estimate.

The scientific and technical information in this report that relates to
the geology of the deposits and exploration results is based on
information compiled by Mr Nick Franey, who a full-time employee
(General Manager Geology) of Azumah Resources Ltd.  Mr Franey is a
Member of the Australian Institute of Geoscientists and has sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’
and to qualify as a “Qualified Person” as defined in National
Instrument 43 -101 – Standards of Disclosure for Mineral Projects (“NI 43-101″) of the Canadian Securities Administrators.  Mr Franey is
the Qualified Person overseeing Azumah’s exploration projects and has
reviewed and approved the disclosure of all scientific or technical
information contained in this announcement.

For further information, including a description of Azumah’s standard
data verification processes, quality assurance and quality control
measures, and details of the key assumptions, parameters and methods
used to estimate the Mineral Resources and Mineral Reserves set out in
this report and the extent to which the estimate of previously declared
Mineral Resources and Mineral Reserves set out herein may be materially
affected by any known environmental, permitting, legal, title,
taxation, socio-political, marketing or relevant issues, readers are
directed to the technical report titled “Wa Gold Project, Ghana 43-101
Technical Report”, effective as of 27 August, 2012, available on www.sedar.com.

The reported Mineral Reserves have been compiled by Mr Harry Warries. 
Mr Warries is a Fellow of the Australasian Institute of Mining and
Metallurgy and an employee of Coffey Mining Pty Ltd.  He has sufficient
experience, relevant to the style of mineralisation and type of deposit
under consideration and to the activity he is undertaking, to qualify
as a Qualified Person as defined in the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Definition Standards of November 2010,
as well as a Competent Person as defined in the ‘Australasian Code for
Reporting of Mineral Resources and Ore Reserves’ of December 2004
(“JORC Code”) as prepared by the Joint Ore Reserves Committee of the
Australasian Institute of Mining and Metallurgy, the Australian
Institute of Geoscientists and the Minerals Council of Australia. Mr
Warries gives Azumah Resources Limited consent to use this reserve
estimate in reports.

Forward-Looking Statement

This release contains forward-looking information. Such forward-looking
information is often, but not always, identified by the use of words
such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”
and “intend”, and statements that an event or result “may”, “will”,
“should”, “could”, or “might” occur or be achieved, and other similar
expressions. In providing the forward-looking information in this news
release, the Company has made numerous assumptions regarding: (i) the
accuracy of exploration results received to date; (ii) anticipated
costs and expenses; (iii) that the results of the feasibility study
continue to be positive; and (iv) that future exploration results are
as anticipated.

Management believes that these assumptions are reasonable.
Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those contained in the forward-looking
information. Some of these risks, uncertainties and other factors are
described under the heading “Risks Factors” in the Company’s annual
information form available on www.sedar.com. Forward-looking
information is based on estimates and opinions of management at the
date the statements are made.  Except as required by law, Azumah does
not undertake any obligation to update forward-looking information even
if circumstances or management’s estimates or opinions should change.
Readers should not place reliance on forward-looking information and
readers are advised to consider such forward-looking statements in
light of the risks set forth in the Company’s continuous disclosure
filings as found at the (Canadian) SEDAR website.

SOURCE Azumah Resources Inc

PDF available at: http://stream1.newswire.ca/media/2013/06/19/20130619_C9530_DOC_EN_28228.pdf


Source: PR Newswire