Alcyone Resources targets resumption of production at Texas silver project

Alcyone Resources Limited (ASX: AYN) has reported an update on its JORC compliant silver mineral resources totalling 15.1 million ounces at its 100%-owned Texas Silver Project in south-east Queensland.

The company has also provided an update on progress towards the resumption of silver production at the Twin Hills Mine later this year.

The estimation of the new mineral resource inventory marks the first critical milestone in Alcyone’s 2010 development plans for the Twin Hills Project. The company said It provides a strong foundation for other ongoing work programmes including metallurgical test work and the development of a new process flow sheet and mine plan.

Bulk sample analysis returned silver grades above the expected grade indicated by the mineral resource model and grade control information.

The JORC compliant Measured, Indicated and Inferred Mineral Resource inventory highlights include: above a 40g/t Ag reporting cut-off, of 5.9Mt @ 79g/t Ag for 15.1Moz of contained silver, comprising of 3.8Mt @ 83g/t Ag for 10.2Moz contained silver at Twin Hills; 2.1Mt @ 73g/t Ag for 4.9Moz contained silver at Mt Gunyan.

Over 85% of the resource inventory is in the Measured and Indicated categories and is available for conversion to Ore Reserves. Mining optimisations are now underway.

Subject to continued success with these work programmes, Alcyone is on track to finalise a new mine plan, process flow sheet and economic model for the Twin Hills Mine by the end of the second Quarter (Q2) of calendar 2010 with a target date for the resumption of operations at Twin Hills of the end of Q4 2010.

“The announcement of a 15.1 million ounce JORC resource is a strong result for Alcyone, reflecting a thorough and rigorous analysis of the historical data available from Twin Hills that has placed over 85% of the resource into the Measured and Indicated categories,” said Alcyone’s Managing Director, Andrew King.

“We have a high degree of confidence in the work that has been completed since Alcyone took over the Twin Hills Project in November last year. The new resource provides a very solid foundation for our plans to recommence production by the end of calendar 2010,” King continued.

“Metallurgical test work is progressing according to schedule with the initial 60-day trial nearing completion. In parallel with this, work has commenced on mine optimisation studies and we are also having preliminary discussions with various equipment suppliers and other contractors to establish restart procedures for key items of plant and equipment, keeping us on our pathway to production by the end of 2010.”

In parallel with this work, Alcyone has also commenced an assessment of the regional exploration targets within its 275 sq km tenement package, including the potential for both additional heap leachable silver deposits as well as sulphide base metal mineralisation.

Work on mine planning optimisations and economic modelling for Mt Gunyan will commence immediately on completion of the assessment of Twin Hills.

The Mt Gunyan deposit, has the potential to provide additional feedstock and increase the life and throughput of the Twin Hills operation.

The mineralisation at Mt Gunyan is relatively close to surface and on the sides of the hill which should be beneficial in relation to the stripping ratio and hence mining costs when the pit optimisations are undertaken.

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