9ea3d2e9-ac48-48ab-a6a8-966e47f9a00e.pdf
QUARTERLY REPORT
June 2016
Highlights
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Devon Mine current mining phase nearing completion.
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Repayment of Standby Finance Facility - GME now debt free.
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Review of other gold assets underway - see post quarter event.
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$1.5 million Cash in the bank at the end of the quarter after paying back the Standby Funding Facility.
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Post the end of the Quarter, GME has entered into an agreement with Zeta Resources Ltd (Zeta, ASX:ZER) on the Murrin Murrin Project located within the highly prospective North-Eastern Goldfields of Western Australia.
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Murrin Murrin contains a JORC 2012 (547Kt @ 3.12 g/t Au for 54,875 ounces) indicated gold resource. (Refer - Zeta ASX announcement 22 January 2014)
Production Devon Gold Mine
Steady progress has been made over the last quarter. To date, approximately 75% of the total volume (450,000 bank cubic metres - inclusive of waste & ore) has now been mined. Four batches of ore totalling 28,100 wet tonnes (42% of total ore) have been processed through the Saracen's Carosue Dam processing facility.
Sale of gold ore from Batches 1 through 4 have been finalised. The gold price applicable to respective ore sales is determined by the monthly average price as set by the DMP mineral royalties division. The average gold price for the months of April and May were AUD$1620.46 and AUD$1721.36 respectively. Funds from these sales have been received and are included in the financial results reported for the quarter and reflect the positive influence that the Devon mining operation is having on the Company.
By the end of the current quarter significant waste material had been removed from the western wall of the pit down to the main pit floor currently at 23.5 metres below surface (i.e. 374 mRL). For the remainder of the campaign at Devon the strip ratio has reduced significantly allowing access to the remaining higher grade ore and the further development of the pit to its maximum depth of 45 metres.
At the end of June approximately 55,000 BCM's (roughly 148,570 tonnes) in total remain to be mined from the pit and includes a forecasted 25,000 wet tonnes of high grade ore averaging 6.3 g/t.
Mining of the Devon pit is expected to be completed by mid August with all ore planned to be processed by the end of the September Quarter.
At the end of the quarter four batches of ore have been processed at Saracen's Carosue Dam processing plant. A total of 26,300 dry tonnes have been treated - the final agreed tonnes and grade of the individual batches are listed below: -
Batch 1 - 5,832 dry tonnes averaging 4.14 g/t April - Gold Sale Price $1621.46 Batch 2 - 9,633 dry tonnes averaging 3.61 g/t April - Gold Sale Price $1621.46 Batch 3 - 6,244 dry tonnes - averaging 6.26 g/t May-- Gold Sale Price $1721.36 Batch 4 - 4,579 dry tonnes - averaging 6.43 g/t May - Gold Sale Price $1721.36
Processing recoveries, determined from metallurgical testwork minus a processor's deduction, for ore batches have been extremely good ranging from 90.1 to 94.2%.
Figure 1. Batch 5 being built at Devon ready for transport and processing in July through the Carosue Dam Processing Facility.
The photograph below (Figure 2) shows the Devon pit as it was at the end of June 2016. The view is of the Southern Pit looking south and shows the pit floor approximately 23.5 metres below surface at the 374 mRL. Pleasingly, the mining operation has progressed as expected and pit shapes are in line with designs. The ore block model has also performed according to expectation indicating that the time and effort spent drilling and modelling the deposit has removed significant risk during the economic valuation and mining phases of the project.
Figure 2. The Devon Southern pit looking south as it was at the end of June 2016.
Mining progress is timely and costs are running on budget. Further updates will be provided as the development progresses.
As per the announcement made by GME on the 27 June 2016, the Company is pleased to confirm that the Company has now repaid the $1.5 million Standby Funding Facility provided by Zeta Resources Ltd (Refer ASX announcement 17 March 2016) for the development of the Devon Gold Mine.
The Company is now debt free and has sufficient working capital to fund the project through to completion.
Review of Gold Assets
GME has commenced reviewing the potential of its gold prospects outside of Devon, in particular within the, Abednego, Laverton Downs Project and Hawks Nest areas. In addition to current Project areas GME will also be pursuing other opportunities within the North-eastern Goldfields of WA. Post the end of the quarter, GME has entered into an agreement with Zeta Resources, the detail of which can be found under the Post Quarterly Event Section of this report.
NiWest Nickel Laterite Heap Leach Project
Metallurgical test work on the development of the flow sheet for NiWest Nickel Laterite Heap Leach- SX-EW project is currently on hold as an austerity measure. On completion of the Devon Gold Project the Company will be well funded and will undertake a review of all options to progress the flow sheet development for NiWest.
Post Quarterly Event
On 14 July 2016 GME announced that it had entered into a binding term sheet for the purpose of entering into a Joint Venture Agreement with Zeta Resources Ltd (Zeta, ASX:ZER) on the Murrin Murrin Project located within the highly prospective North-Eastern Goldfields of Western Australia. The binding Term Sheet was executed by Golden Cliffs NL (GCNL) a 100% owned subsidiary of GME and Kumarina Resources Pty Ltd (KMR) a 100% own subsidiary of Zeta.
The key terms include:-
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GCNL will fund $1.5 million dollars in exploration and development costs to earn a 50
% interest in the Murrin Murrin Project within 24 months of date of agreement.
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GCNL can elect to withdraw from the Earn In at any time, provided it has spent at least
$250,000 on exploration and development.
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On completion of the Earn In, both GCNL and KMR agree to enter into a 50:50 Joint Venture to further develop the project.
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GCNL will be Manager of the Project and will manage the Joint Venture in accordance with the Joint Venture Committee directions.
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On and from the Commencement of the Joint Venture the Parties will contribute to expenditure on the Project in proportion to their joint venture interest. A dilution formula applies if either party does not contribute.