TIDMHGM
RNS Number : 0796E
Highland Gold Mining Limited
07 February 2018
HIGHLAND GOLD MINING LIMITED
Belaya Gora/Blagodatnoye Pre-Feasibility Study and Resource
Update
07 February 2018
Highland Gold Mining Limited ("Highland Gold" or the "Company",
AIM: HGM) is pleased to announce the results of a Pre-Feasibility
Study ("PFS") by consultants SRK for its Belaya Gora operation,
including upgrades to the existing processing plant and the mining
and processing of ore from the nearby Blagodatnoye deposit. The PFS
also contains updated JORC-compliant Mineral Resource and Ore
Reserve estimates ("Resource Update") for both Belaya Gora and
Blagodatnoye. An executive summary of the report will be available
shortly on the Company's website (www.highlandgold.com).
PFS HIGHLIGHTS
-- Resource Update for the combined Belaya Gora and Blagodatnoye operation with total gold reserves of 932k oz at a
grade of 1. 44 g/t versus the previously reported 291k oz @ 3.3 g/t for Belaya Gora alone (1 January 2017).
-- New mining plans for Belaya Gora and Blagodatnoye, both of which are open-pit operations, envisioning the
processing of Blagodatnoye ore at the Belaya Gora mill and a combined life of mine extending until the year 2032.
-- Estimated capital expenditures of US$ 15 million for upgrades to the Belaya Gora processing plant, which
encompasses the addition of a carbon-in-pulp (CIP) circuit, to improve recoveries from the current 72% to a range
of 86-91% for Belaya Gora ore and 90% for Blagodatnoye ore.
-- Estimated capex of US$ 21 million in 2023 to move mining activity from Belaya Gora to Blagodatnoye, including the
purchase of a crushing circuit, road construction and upgrades, and equipment replacement.
-- Average annual production of 55 koz over the life of mine.
-- Total life of mine production of 820 koz at an average total cash cost of US$ 802/oz and all-in sustaining costs
of US$ 848/oz.
-- Post-tax NPV@10% of US$ 97 million and IRR of 142% for the combined project, excluding historical costs and based
on a gold price of US$ 1250/oz.
The revised Mineral Resource estimate for Belaya Gora more
accurately reflects the actual mining experience and takes into
account the results of a two-year drilling programme, which
identified additional mineral resources. The Ore Reserve estimate
also accounts for improved project economics, which increased the
limits of the open pit.
Estimates for Blagodatnoye likewise follow an extensive drilling
programme in 2016-2017 to confirm the deposit's resources.
Mineral Resources of the Belaya Gora Mine*
In accordance with the JORC Code (2012) as of 01 January
2018
Ore Au Contained Contained
(MT) (g/t) Au Au
(tonnes) (Koz)
========== ===== ====== ========= =========
Indicated 12.1 1.52 18.39 590
========== ===== ====== ========= =========
Inferred 0.15 2.22 0.33 11
========== ===== ====== ========= =========
Total 12.25 1.53 18.74 601
========== ===== ====== ========= =========
Mineral Resources of the Blagodatnoye Deposit*
In accordance with the JORC Code (2012) as of 01 January
2018
Ore Au Contained Contained
(MT) (g/t) Au Au
(tonnes) (Koz)
========== ===== ====== ========= =========
Indicated 19.2 1.25 24.00 776
========== ===== ====== ========= =========
Inferred 0.05 0.88 0.04 1.3
========== ===== ====== ========= =========
Total 19.3 1.25 24.13 777
========== ===== ====== ========= =========
* Notes
- Mineral Resources are reported inclusive of ore reserves.
- Cut-off grade of 0.4 g/t for Belaya Gora and 0.5 g/t for Blagodatnoye.
Ore Reserves of the Belaya Gora and Blagodatnoye Project**
In accordance with the JORC Code (2012) as of 01 January
2018
Ore Au Contained Contained
(MT) (g/t) Au Au
(tonnes) (Koz)
==================== ===== ====== ========= =========
Belaya Gora
Probable 9.9 1.45 14.36 460
==================== ===== ====== ========= =========
Blagodatnoye
Probable 10.2 1.43 14.59 472
==================== ===== ====== ========= =========
Total Belaya Gora +
Blagodatnoye 20.1 1.44 28.94 932
==================== ===== ====== ========= =========
** Ore Reserves are reported at a variable cut-off grade for
Belaya Gora (between 0.4 and 2.05 g/t Au) and 0.77g/t Au for
Blagodatnoye within an engineered pit design.
Belaya Gora is Highland Gold's youngest operating mine, with
commercial production initiated in 2014. It is located in the
Khabarovsk region of Russia's Far East, 55 kilometres north of the
town of Nikolaevsk-na-Amur and 66 kilometres south of the Company's
MNV operation.
The Blagodatnoye deposit is a greenfield project located 39
kilometres to the southeast of Belaya Gora. Initial exploration was
carried out at the site in 2010-2012, and restarted in 2016. It is
connected to Belaya Gora by municipal road.
Information contained in this release has been taken from the
"Pre-Feasibility Study for Belaya Gora and Blagodatnoye Gold
Project", prepared in compliance to the JORC Code 2012 by a panel
of qualified industry experts of SRK Consulting.
Mr. Andrey Sevryugin, Senior Specialist in the Geology and
Subsoil Use Department at Highland Gold, has reviewed and verified
the information contained in this release with respect to mineral
resources. Mr Sevryugin is an Expert of the Russian Society of
Subsoil Use Experts (OERN) and has sufficient experience relevant
to the style of mineralisation and type of deposit under
consideration to qualify as Competent Persons as defined in the
JORC Code 2012 Edition.
FOR FURTHER INFORMATION PLEASE CONTACT:
Highland Gold Mining Ltd. John Mann, Head of Communications
+ 7 495 424 95 21
Duncan Baxter, Non-Executive Director
+ 44 (0) 1534 814 202
Numis Securities Limited John Prior, James Black, Paul Gillam
(Nominated Adviser and Joint Broker) +44 (0) 207 260 1000
BMO Capital Markets Limited Jeffrey Couch, Neil Haycock, Pascal Lussier Duquette
(Joint Broker) +44 (0) 207 236 1010
Peat & Co Charlie Peat
(Joint Broker) +44 (0) 207 104 2334
Glossary
JORC - Widely accepted standard for reporting mineral resources
and ore reserves established by the Australasian Joint Ore Reserves
Committee.
Mineral Resource - concentration or occurrence of solid material
of economic interest in or on the Earth's crust in such form, grade
or quality and quantity that there are reasonable prospects for
eventual economic extraction. The location, quantity, grade or
quality, continuity and other geological characteristics of a
Mineral Resource are known, estimated or interpreted from specific
geological evidence and knowledge, including sampling.
Inferred Mineral Resource- that part of a Mineral Resource for
which quantity and grade or quality can be estimated on the basis
of geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. The estimate is
based on limited information and sampling gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes.
Indicated Mineral Resource - that part of a Mineral Resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. The estimate is based on
detailed and reliable exploration and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably
assumed.
Measured Mineral Resource- that part of a Mineral Resource for
which quantity, grade or quality, densities, shape, and physical
characteristics are so well established that they can be estimated
with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning
and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough to confirm both geological and
grade continuity.
Ore Reserve - the economically mineable part of a Measured or
Indicated Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction can be justified. A Mineral Reserve includes diluting
materials and allowances for losses that may occur when the
material is mined.
Probable Ore Reserve - the economically mineable part of an
Indicated and, in some circumstances, a Measured Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can
be justified.
Proven Ore Reserve - is the economically mineable part of a
Measured Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction is justified.
This information is provided by RNS
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