Millennium Minerals (ASX: MOY) has dusted off a a detailed feasibility study completed in 2007 on its 100% owned Nullagine Gold Project, located south east of Port Hedland in the East Pilbara District of Western Australia.
In light of the significant improvement in the Australian dollar denominated gold price, the project economics at Nullagine have improved.
Millennium will now update the project economics using current prices, and believes that the development of Nullagine is now more compelling.
The Nullagine Gold Project is a 1.1 million ounce open pittable gold mineral resource that was subject to a detailed feasibility study completed in early 2006 and revised in early 2007. It was contained within 5 deposits on granted mining leases.
The largest deposit is Golden Eagle located approximately 10 km south of the township of Nullagine and contains 69% of the total Mineral Resource inventory.
Much of the permitting and design work for a 1 million tonne per annum Carbon-In-Leach (CIL) processing facility has been completed providing for an early start to development when a decision to mine is made.
The Company has re-examined the basic economics of the Project in light of the improvement in the Australian dollar denominated gold price. The current Mineral Resource estimate for the five project areas now totals 27.63 Mt @ 1.23 g/t Au using a 0.5 g/t Au lower cut-off grade for approximately 1.1 million ounces of contained gold.
The Company has re-scoped the 2007 base case feasibility study which indicates the potential for an 8-10 year operation milling 1 Mt annually through a CIL processing plant. The scoping study was based on a series of pit optimisations of the five deposits.
The spot gold price used for the study was US$900/oz and operating cost inputs were internally updated from the 2007 feasibility study base numbers with the US$/A$ exchange rate set at 0.7.
The overall mineral resource is expected to increase when the mineral resource estimates are finalised shortly for the Golden Gate satellite deposits, namely Falcon, Condor, Crow, Harrier and G Vein.
A total of 22.16 Mt at 1.26 g/t Au is contained within the Measured and Indicated Mineral Resource categories. This represents approximately 80% of the total Mineral Resource for the Nullagine Gold Project.
In parallel with this study, the potential for heap leaching the medium to low-grade material will be assessed. The scoping study showed that were this material able to be processed the overall waste to ore stripping ratio of the project could be significantly reduced (under 2:1).
Key work to be completed on the base case includes updating mining and processing operating costs inputs and development capital to provide the basis for Ore Reserve definition and project financing.
An independent review of the process design is in progress and will be combined with assessment of the availability of process plant equipment. The Company is targeting process equipment and plant that process equipment and plant that is available now to set in place rapid development for when the decision to mine is made.
Results of these studies will completed in August 2009.
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