OPERATIONS

MATALA AND DUNROBIN


Alecto Minerals owns 100% of two historic gold mines, Matala and Dunrobin, and a number of exploration targets, Chosa and Shadreck, within a single 32km2 large scale 25 year renewable mining licence. 

The Project, which is located in Zambia, has excellent potential to be developed into production in the near to mid term considering the presence of a renewable mining licence, an associated environmental permit, and an advanced JORC Code compliant resource estimate in the Measured, Indicated and Inferred categories resources of, in aggregate, 760,000 oz Au at an average grade of 2.3g/t Au.  The Board believes that there is additional exploration potential at both Chosa and Shadreck, which are historic mines close to Dunrobin.  Internal resource estimates for the combined targets, based on geophysics, trenching and over 7,000 metres of resource drilling, give 1,500,000 tonnes at an average grade of 2.6 g/t Au.  Both are open at depth.

US$20 million has been invested previously in drilling and test work to date, culminating in a scoping study at the Matala deposit and a feasibility study on the Dunrobin deposit by Coffey Mining Pty Ltd in 2013.

Alecto has identified the potential to develop a low-cost, profitable small scale 400,000 tonnes per annum open-pit mine at Matala and satellite deposits, targeting the oxide and transitional ore and using a simple crushing, milling and gravity circuit with subsequent direct cyanidation.  An updated scoping study for Matala, completed by Alecto, indicates the potential to generate cash flows and strong economics at an assumed gold price of US$1,150 and a discount rate of 10 through an initial three year open pit operation at Matala.  A summary of the findings follows:

  • · Indicative IRR of 65%
  • · Indicative NPV (10%) of US$18 million
  • · Low initial capital cost of approximately US$18 million
  • · Estimated C1 cash cost of approximately US$695/oz (excluding government royalties of 6%)

The positive economics have been delivered in part due to the good regional infrastructure with access, power and water available.  The Board believes that considerable upside potential exists to target further high-grade underground ores and thereby further extend the life of mine, with the known resource at Matala open at depth, as well as sulphide ores at Dunrobin and Chosa.     The Company plans to use the resultant surplus cash flow from production at Matala to develop these.

Extensive mineral processing and metallurgical testwork, undertaken by Peacock & Simpson, a third party consultant, in 2012, has identified that the fully oxidised resources from both Matala and Dunrobin are amenable to gravity concentration and subsequent direct cyanidation.

The table below provides a breakdown of the resources at the Project:

JORC Code compliant Resource Summary

Cut-Off Grade

Tonnes

Average Grade

Gold Resource

(g/t Au)

(000's)

(g/t Au)

(000's oz Au)

Dunrobin Deposit

Measured

1.0

978

2.6

81

Indicated

1.0

1,063

2.0

69

Inferred

1.0

763

1.8

43

Matala Deposit

Indicated

1.0

3,204

2.7

278

Inferred

1.0

4,525

2.0

290

Total

Measured

1.0

978

2.6

81

Indicated

1.0

4,267

2.5

347

Inferred

1.0

5,288

2.0

332

Grand Total

1.0

10,533

2.3

760

 

Licence 8074-HQ-LML and adjacent exploration rights on licence 14948-HQ-LML

 

Presents a simplified flow sheet for the initial development of Matala


Figure 2: Project area with Matala and Dunrobin mines and satellite deposits

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