Starting small

INSPIRED by the profits made by artisanal miners, Gold Anomaly plans to start small-scale mining at its Crater Mountain project in Papua New Guinea to fund more drilling.
Starting small Starting small Starting small Starting small Starting small

Published in the April 2013 PNG Report magazine

Artisanal mining of the project's shallow high-grade zone is estimated to have produced 15,000 ounces of gold through basic digging and gravity separation techniques since 2005. The local miners were removed in 2011, but their mining did prove that the fractured oxide material could relinquish high gold grades with relative ease.

Gold Anomaly managing director Greg Starr was impressed from a metallurgical point of view, and said they used running water, a sluice box and garlic mashing-style mortars and pestles for hand-crushing gold separation.

The explorer, which is working on getting a variation on its project licence, aims to put a 100m-deep adit into the artisanal mining zone and then put in some cross cuts off it.

The adit is expected to be at a slight angle and the particular area targeted has previously delivered strong drilling results, such as a 2m intersection grading 98.2 grams per tonne gold.

The adit development will only require an excavator and a bulldozer and Starr expects it to start in the coming months.

If it all goes to plan, Gold Anomaly will later apply for a special small-scale mining lease with production centred on using simple gravity separation techniques.

The explorer has already estimated there could be 100,000 ounces of gold in the fractures and ore shoots at this zone, but they could extend more at depth.

As part of this shift towards early cashflow generation, Gold Anomaly hired mining engineer Richard Johnson as its PNG operations manager.

Johnson supervised the profitable operations of the Tolukuma gold mine between 2002 and 2005 when it was owned by DRDGold.

Financing the small venture is also largely taken care of with Gold Anomaly lining up a $A6.9 million rights issue underwritten by key shareholder FreeFire Technology.

Starr said the big picture to this strategy was self-funding more drilling into the project's mixing zone, an area with lower grades but broader mineralisation which may prove to be suitable to support a conventional open cut style operation.

There are also question marks over the mineralisation found deep in the project area.

A 1km deep hole indicates that a top of a copper porphyry system might start there, but a lot of funds will be needed to scope out a deposit at those depths.

It remains too premature for Gold Anomaly to reveal the possible costs per ounce and production rates for its proposed small scale mining at Crater Mountain.

Update

Gold Anomaly received regulatory approval for its exploration adit in mid May.

"A Mining Lease will be applied for as soon as an economically viable deposit can be demonstrated," the explorer said at the time.

"At this stage it is considered that the likely method of future underground mining will be by decline using loaders and underground trucks from a portal 10 to 15m lower than the proposed exploration

adit."

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