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OceanaGold find gold beyond second underground panel at Macraes
2 November 2004 - Step out drilling exploration beyond the existing large Frasers orebody at the Macraes gold mine has recorded significant and higher grade intercepts, OceanaGold says in its report for the September quarter.
Some 47 holes were drilled during the quarter as part of a step out and infill drilling campaign to more accurately establish the nature of the orebody for the planned underground mining in the area.
While infill drilling results in the planned panel 1 underground mine has confirmed previous estimates of the general grade and ore body size a different picture is emerging with the panel 2 area.
OceanaGold says the infill drilling of panel 2 has shown that the higher grade mineralisation is contained in two blocks which it is calling panel 2 north and panel 2 south. The northern block also extends beyond the previous panel 2 boundary and is still open to the north east and south east. The step-out holes completed during the quarter were drilled approximately 200m down dip and intersected significant mineralisation.
Two earlier holes, also drilled in this area, intersected strong hangingwall mineralisation which indicates that either the north block is increasing in strike width down dip or a third block has developed. Step out drilling will continue in the fourth quarter to better define this mineralisation.
The drilling programme will enable OceanaGold to convert the Frasers underground resource into reserve status by the end of 2004.
The decline being drilled to access the Frasers underground ore body had progressed 167 metres by mid-October and is on schedule for completion by the second quarter of 2006. The Frasers underground bankable feasibility study is on schedule for completion at the end of November 2004.
The Frasers underground operation will complement the existing open cut at Macraes and substitute for approximately 1.5 million tonnes of lower grade open cut mill feed, increasing gold production to approximately 220,000 oz a year during 2006-2007.
OceanaGold reported that Macraes production and costs were close to plan despite operations being adversely affected by inclement weather with poor haulroad conditions reducing the amount of planned ore feed from the higher grade Golden Bar ore body. Mining during the third quarter occurred in Frasers Stage 3, Golden Bar, Frasers West and the Round Hill NW pits.
The operations are on track to deliver prospectus forecast gold production of 183,000 oz at a slightly higher cash cost of A$343 per ounce.
Year-to-date, OceanaGold has produced 136,961 ounces at a cash cost of A$343 per ounce. Through the first nine months, OceanaGold has generated earnings after tax of A$14.5 million or A$0.04 per share on sales of A$86.4 million.
In August, OceanaGold repurchased all of its outstanding hedges totalling about 900,000 oz. The company recorded a net surplus of A$27 million, which was used to close out its A$30 million debt facility.
