Engineering & Mining Journal

JUL 2013

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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REGIONAL NEWS - AUSTRALIA/OCEANIA Vista Reports PFS and Reserve Increase for Mount Todd Macmahon's CSA Mine Shaft-sinking Contract Terminated Proposed layout of Vista Gold's Mount Todd gold project in Northern Territory, Australia. (Photo courtesy of Vista Gold) Vista Gold has reported positive results for a new preliminary feasibility study (PFS) of its Mount Todd open-pit gold project in Northern Territory, Australia. The PFS evaluates two development scenarios: a 50,000-mt/d base case that develops more of the Mount Todd resource and generates a larger net present value (NPV) and a smaller, higher-grade, 33,000-mt/d alternate case that focuses on maximizing return and operating margins. The Mount Todd project is located approximately 300 km southeast of Darwin, Northern Territory. Access is via 15 km of high-quality, two-lane paved roads from the Stuart Highway, the main arterial highway within the territory. Highlights of the 50,000-mt/d base case include estimated proven and probable reserves of 5.90 million oz of gold in 223 million mt, grading 0.82 g/mt at a cut-off grade of 0.40 g/mt. The current estimate represents a 44% increase over reserves previously reported in January 2011. Lifeof-mine gold production would average 369,850 oz/y over a 13-year operating life. Production during the first five years of operation would average 481,316 oz/y. Initial capital requirements for the base case are $1.05 billion. Life-of-mine average cash costs are estimated at $773/oz, including average cash costs of $662/oz during the first five years of operations. Highlights of the 33,000-mt/d alternate case include estimated proven and probable reserves of 3.56 million oz of gold 16 E&MJ; • JULY 2013 in 124 million mt, grading 0.90 g/mt at a cut-off grade of 0.45 g/mt. Life-of-mine gold production would average 262,826 oz/y over an 11-year operating life. Production during the first five years of operation would average 294,502 oz/y. Initial capital requirements for the alternate case are $761 million. Lifeof-mine average cash costs are estimated at $684/oz, including average cash costs of $676/oz during the first five years of operations. Both scenarios call for gold to be recovered through a traditional carbon-inleach circuit. Vista President and CEO Fred Earnest said, "By completing the PFS analysis on two separate development scenarios, we have the option to develop the mine most appropriate at the time a development decision is made." Vista anticipates receipt of environmental approvals for the Mount Todd project by year-end 2013. Because of the advanced state of the PFS, with most technical work already at feasibility levels, the company estimates that a feasibility study would require four months to complete and would cost approximately $2.5 million. Vista is working with the communities of Katherine and Pine Creek to develop a community-based project at Mount Todd, as opposed to a fly-in, fly-out project that would likely be more expensive and would limit the economic benefits of the project to the local communities. Macmahon Holdings reported on June 5 that its contract for a major shaft-sinking project at Glencore Xstrata's CSA underground copper mine in Cobar, New South Wales, had been terminated by the client. Macmahon said it was seeking clarification as to the reasons for and consequences of the termination and would advise of the impact on its stock market guidance once details are known. The CSA project was expected to contribute approximately A$6 million of revenue to Macmahon in June 2013 and A$80 million of revenue in its fiscal year 2014. Glencore Xstrata did not offer specific reasons for the contract cancellation but said it was considering its options for the project. Macmahon was awarded the two-year, turnkey underground engineering construction contract, valued at approximately A$110 million, in August 2011. The contract called for Macmahon to provide complete project works, including engineering design, fabrication, procurement, construction and management of the deepening of the CSA mine's No. 1 shaft from 1,050 m to 1,550 m. The scope of work included: • Ground support and concrete lining; • Equipping the shaft for hoisting to the surface, including steel guides and services; • Construction of a new head frame and installation of a tower-mounted friction winder; and • Construction of a new underground materials handling system, including crusher, ore bins, conveyors and loading station. On completion, the new underground materials handling and shaft hoisting system were to have a capacity of 1.6 million mt/y from a depth of 1,500 m. When the contract was awarded, Glencore said the project would allow lower-cost access to deeper resources in the CSA mine and an increase in annual production of around 50% to 270,000 dry mt/y of copper concentrate. The total cost of the project, including the Macmahon contract and other works, was expected to be about A$150 million. www.e-mj.com

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