Twin gold project strategy pays off for Mungana
20th Apr 2012
BRISBANE, Apr 20 – A positive scoping study and imminent production from its currently 55%-owned Tunkillia Gold Project, 600km northwest of Adelaide, South Australia, is expected to give Mungana Goldmines total production of 180,000oz of gold a year by 2015-16.
Such have been the results to date, the company is looking to begin construction at Tunkillia in early 2014 to enable ore production and processing by early 2015, subject to the relevant project approvals.
The $A114M Tunkillia project has a JORC-compliant resource of 15.6Mt @ 1.6g/t gold for 803,000oz to a depth of 300m.
Headline numbers from the study include 2Mtpa throughput, production of 492,900oz over six years, a pre-tax operating surplus of between $A115M and $210M, a pre-tax IRR of between 20.9% and 35.4% at gold prices of $A1,500-$1,700/oz and average cash costs of $983/oz.
The company is now looking to increase the current resource via a $3M regional drilling program scheduled to begin in May.
Given the numbers, it is no surprising Mungana intends to increase its earn-in position at Tunkillia to 65% by December 2012, taking the company’s attributable resources to 3.2Moz.
The scoping study points to an open pit around 225m deep, over 2km long and about 430m wide, with construction beginning in early 2014 and CIP processing at 2Mtpa beginning by early 2015, producing around 80,000oz pa.
The free cash flow generated from Tunkillia will substantially offset capital costs at the flagship Mungana gold project in North Queensland, which has measured, indicated and inferred resources of 2.7Moz of gold, 273,000t of copper and 34Moz silver. Mungana is currently undertaking a BFS targeting production of 100,000oz gold, 10,000t of copper and 1.5Moz of silver annually.
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