QUARTERLY REPORT
September 2016
Highlights
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Mining Operations completed at Devon Gold Mine
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NiWest Nickel Laterite Project
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Finalising review of metallurgical test program
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Program set to re start Dec Quarter
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Focus on producing Ni/Co sulphates for Lithium battery market.
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High Grade Gold Results at Murrin Murrin Gold (J/V) Project
Devon Gold Mine
Mining operations at Devon were completed in August. All high grade ore has been processed and the Company has received payment in full under the Ore Processing Agreement executed with Saracen Gold Mines.
The successful development generated $4.043 million profit (including development costs) in a relatively short period (six months). The operation leaves the Company is strong financial position with $4.25 million cash at bank as of (20 Oct 2016) to pursue further initiatives on both its Gold and Nickel assets over the next year.
A remaining parcel of low grade ore amounting to approximately 21,000 tonnes (circa 1.7 g/t) is in the process of being delivered to the Carosue Dam plant site. This parcel is scheduled to be processed before the end of October and is expected to generate additional profit for the operation.
Use of Funds
Funds generated from the Devon Gold Mine will be used to re start the NiWest Nickle Laterite Metallurgical test program that was suspended in September 2015. Further drilling will also be undertaken at several of the Company's gold assets including the Devon Deeps and the Murrin Murrin Gold Project where the Company has execute a binding Terms Sheet with Zeta Resources Ltd to enter in a J/V arrangement after meeting a minimum expenditure of $250,000.
GME Resources Limited Quarterly Report - September 2016
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Operational statistics for the development of the mine which straddled the 2016 financial year were are listed below:
Devon Gold Mine Financial Results
Total Revenue $12.715 M
Mining, Haulage & Processing Costs $ 7.245 M Development Costs $ 1.427 M
Operating Surplus $ 4.043 M
Ounces Produced 7,398
Operating Cost per ounce $ 979
Average Gold Price $ 1,718
Mining Statistics as Determined by the Ore Processing Agreement
Total Dry Tonnes Processed 47,032
Average Recovered Grade 5.30 g/t
Recovery 92.37%
The Company would like to acknowledge the input from our dedicated geology team, contractors engaged at the site and the operational staff at the Carosue Dam Processing facility.
Figure 1. Final stages of mining at Devon
GME Resources Limited Quarterly Report - September 2016
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NiWest Nickel/Cobalt Laterite Project
The Company is in the process of finalising a review of the currently suspended metallurgical program. In particular, the Company is examining modifications to the flow sheet to produce a nickel and cobalt sulphate product rather than nickel metal.
The NiWest project is at an advanced stage and is development ready once the flow sheet has been finalised. Previous studies completed support the development of a 20 year heap leach project. (Refer ASX Announcement 11 Dec 2013). The Company believes the NiWest project is uniquely placed to become a major supplier of Nickel and Cobalt Sulphates for the rapidly growing Lithium battery market.
The Company is holding a large quantity of pregnant liquor solution generated from bulk column test work in the earlier stages of the metallurgical program and is looking to fast track the completion of the flow sheet design and restart the metallurgical programme. Further announcements in relation to the restart of this work will be made in due course.
In addition to the metallurgical test work the NiWest resource estimate is in the process of being upgraded to meet JORC 2012 compliance. This work is expected to be completed over the December quarter (Refer Appendix 1)
Murrin Murrin Gold Project Joint Venture.
GME Resources Ltd and Zeta Resources Ltd
As announced on the 14 July 2016, the Company, through its 100% owned subsidiary Golden Cliffs NL (GCNL) has entered into a binding Terms Sheet with Zeta Resources Ltd whereby CGNL can earn up to 50% interest in the Murrin Murrin Gold Project (Refer Appendix 2 Gold Projects Location Plan).
During the reporting period the Company completed a drilling program at the Murrin Murrin Gold Project. The program was designed to target mineralisation at the Malcom and Challengers gold mines which contain a JORC 2012 indicated resource estimated to contain 547,000 tonnes at
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grams per tonne for 54,875 ounces. (Zeta ASX announcement, 22 Jan 2014).
The first round of RC drilling at the Malcolm Challenger gold mines produced some very encouraging results. (Refer ASX Announcement - 4 October 2016) Assay results confirm the tenor of grade from previous exploration and further drilling is warranted to define the high grade sections within the resource to complete preliminary mining studies based on a mine and haulage operation with processing at a third party plant.
Highlights from the drilling include
MMRC039 14 metres at 11.72 g/t from 37 metres
Including 6 metres at 21.10 g/t from 38 metres
MMRC032 13 metres at 3.29 g/t from 36 metres
Including 1 meter at 30.50 g/t from 37 metres
MMRC046 14 metres at 2.79 g/t from 49 metres
Including 2 metres at 6.39 g/t from 52 metres
GME Resources Limited Quarterly Report - September 2016
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MMRC 030 10 metres at 2.65 g/t from 56 metres
Including 6 metres at 3.75 g/t from 56 metres
MMRC034 2.25 metres at 10.13 g/t from 39.75 metres
MMRC 028 7 metres at 2.04 grams g/t from 63 metres
Including 1 metres at 9.18 g/t from 63 metres
Results from the program continue to support the potential for an economic project at the Malcolm Challenger mine. Mineralisation extending from the base of the two shallow open pits approximately 30 metres deep has been defined to a maximum depth of 100 metres over a strike length of 1200 metres. Mineralisation remains open at depth.
Mineralisation is contained within a semi massive quartz vein lode that has been re-fractured. Grades are variable with highest grades associated with contacts of the vein system and the host sediments. (Refer Appendix 3 Drill hole plan and cross section)
The Company is in the process of finalising the design of a further drilling program at the Malcolm Challenger mine which is expected to be completed in the December quarter.
Planned work programs over the December quarter include
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Finalise planning for restart of NiWest metallurgical test work
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NiWest Resource estimate update to JORC 2012
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RC drilling program Murrin Murrin Gold Project
The Company looks forward to providing further updates as these programs are completed.
JAMIE SULLIVAN
MANAGING DIRECTOR
27 October 2016
GME Resources Limited Quarterly Report - September 2016
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