Lorena Gold Project - MLs 7147, 90192 to 90196 and EPMs 18908 and 18189
The Lorena Gold Project is located about 15km east of Cloncurry in northwest Queensland. Malachite is the holder of six mining leases (ML7147, MLs 90192-90196), two exploration permits (EPM18189 and EPM18908). Lorena has a total JORC Mineral Resource in the Measured, Indicated and Inferred categories containing approximately 56,600oz of gold at a 2g/t cut-off grade. This is made up by a resource of 179,500t at 8.8g/t Au containing 50,700oz of gold in the A Lode (16,700oz of gold in the Measured category and 34,000oz of gold in the Indicated category), and a resource of 23,700t at 7.8g/t Au containing 5,900oz of gold in the B Lode (800oz of gold in the Indicated category and 5,100oz of gold in the Inferred category). These resources are within a potential open pit mine and are open at depth. The gold-bearing mineralisation is principally of massive and stringer sulphide type and copper-gold mineralisation occurs in conjunction with the gold mineralisation. Drill intersections including 5.9m @ 12.9g/t Au (located 100m down-plunge from the defined resources) demonstrate the potential for significantly increasing the Lorena resource Inventory.
The results of metallurgical test work have shown a gold recover of 90% to a concentrate. Subsequent cyanide leaching of the concentrates resulted in a gold recovery of greater than 85% into solution from the concentrate.
The projected overall metallurgical recovery of gold from Lorena ore via flotation and leaching should be in excess of 75% under normal operating conditions.
The Lorena gold project is forecast to produce around 30,000 to 35,000 ounces of gold in the eighteen months of production from an open cut operation at an operating cost of around A$950 to A$1,000 per gold ounce (includes Malachite's share of plant and preliminary project capital). Figure 1: Lorena Gold Project – Tenement Plan
Since April 2017 Ore Processing Services Pty Ltd (“OPS”) has advanced the development of the Lorena Project pursuant to a binding Heads of Agreement (“HoA”) executed at that time.
On 24 July 2017, Malachite advised that a new joint venture/funding arrangement had been effected with OPS and Cloncurry Gold Recovery Management Pty Ltd (“CGR”) for the Lorena Project.
CGR is the manager of a joint venture between Chinova Resources Tennant Creek Pty Ltd (70%) and BIM Gold Pty Ltd (30%). Chinova Resources Tennant Creek Pty Ltd is a wholly owned subsidiary of Chinova Resources Pty Ltd which is itself a wholly owned subsidiary of the privately owned Chinese company, Shanxi Donghui Coal Coking and Chemicals Group Co., Ltd. BIM Gold Pty Ltd is part of the BIM Metals group, which is a private mining and contracting company, operating a number of projects in the Cloncurry and Mt Isa region.
Chinova Resources Pty Ltd holds a number of projects in the Mt Isa Inlier including the Osborne and Merlin projects, and is also actively exploring in this area.
Subject to standard conditions precedent, the key terms of the new joint venture/funding arrangement are:
Joint Venture Participant
Equity Interest in Stage 1 Open Cut - Lorena Gold Project
Commissioning of the Project is currently expected to commence in October 2017.
The Lorena gold project has potential for resource extensions at depth, however this requires confirmation by drilling which is expected to occur as soon as cash flow is available from the project.
Figure 2: Existing Lorena Concentrator Plant on site
Extensions at Depth
The Company completed a program of drilling and Down-hole Electromagnetics (DHEM) geophysics at the Lorena deposit. The geophysical survey was designed primarily to detect extensions, down plunge from the known resource, as well as provide new targets for exploration beneath the existing Lorena deposit. The survey identified two large, strong electromagnetic conductors, associated with holes LMRD092 and LMDD093, suggesting possible depth extensions to the existing known gold lodes. The Company is very encouraged that the Lorena DHEM survey generated these new targets in such close proximity to the drilling success of hole LMRD092, which intersected 5.3m @ 12.9 g/t Au from 224 metres down hole. The positions of these two conductor plates, relative to the existing Lorena resource and previous drilling, are presented in the long section diagram below (Figure 2). Importantly, the dimensions of each of these two DHEM conductors are similar to the area of the defined gold resource at Lorena. Figure 3: Lorena Gold Project - Long Section showing potential extensions at Depth