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REGIONAL NEWS - AUSTRALIA/OCEANIA Xstrata Zinc Expanding Lady Loretta and Handlebar Hill Xstrata Zinc announced in early May 2012 it is increasing the planned production rate while also moving forward the startup date for its Lady Loretta underground mine project, located 140 km north-north- west of its Mount Isa operations in Queensland, Australia. At the same time, the company said it is further extending the life of its Handlebar Hill open-cut operation 20 km north of Mount Isa. The two projects will generate a net increase of about 25,000 mt/y, or 5%, in Xstrata Zinc's annual zinc production. Construction of the Lady Loretta project began in July 2011 to develop a green- field, underground zinc-lead-silver mine, originally expected to begin production by the end of 2013 at a rate of 1 million mt/y. However, work on the decline, surface infrastructure and services is progressing well ahead of schedule, and Xstrata has approved expenditure of a further A$57 million to accelerate development of the mine, bringing forward the start of ore pro- duction by one year to late 2012. At the same time, the planned ore production rate has been increased to 1.2 million mt/y. Work began immediately to secure key equipment and redesign the development infrastructure, mining plan, and associated road upgrades to accommodate the increased annual ore volume. The accelerated development of Lady Loretta has been supported by an increase in total resources from 12.6 million mt in June 2010 to 13.3 million mt in December 2011, with contained zinc metal increas- ing by 12% to 1.4 million mt and con- tained lead metal increasing by 10% to 448,000 mt over a 12-year mine life. The A$30-million Handlebar Hill Open Cut South project supports the third stage of expansion of this operation and extends the life of the mine by a year to 2014. Developing a narrow cutback to the south of the pit and targeting deeper ore from beneath the first two stages of develop- ment adds approximately 1 million mt of ore at 8.7% zinc, 2.7% lead, and 44 g/mt silver to the existing Handlebar Hill open- pit reserves. Xstrata Zinc Australia COO Brian Hearne said, "We are accelerating the delivery of ore from Lady Loretta to Mount 30 E&MJ; • JUNE 2012 Isa by developing the upper ore bodies independently to the deeper underground resources. At the same time, we are invest- ing in a further expansion of the Handlebar Hill operation following improvements in mining methods and metallurgical per- formance since the mine was designed in 2007. The improvements have allowed us to look at mining previously marginal ore." Vista Advancing Feasibility Work at Mt. Todd As part of an ongoing feasibility study, Vista Gold has reported the initial results of a sampling and metallurgical testing pro- gram on the existing heap leach pad as well as additional results from its drilling program at its Mt. Todd gold pro- ject in Northern Territory, Australia. Regarding the existing heap leach pad, Vista President and CEO Fred Earnest said, "The drilling and subsequent bottle roll test results from the existing Mt. Todd heap leach pad are causing us to consider some new aspects of the Mt. Todd gold project. The potential to convert what we had pre- viously considered to be a brownfield site liability to a potential revenue-generating component of the project could represent a potentially significant source of additional value. We are in the process of evaluating the potentially favorable implications and timing of gold production from the existing heap leach pad and believe that the heap leach pad should be incorporated into the definitive Mt. Todd feasibility study. We are evaluating the impact this may have on our current feasibility study." As part of the current feasibility study, Vista completed a mine pit design based on measured and indicated mineral resources. In November 2011, review of the design and the location of inferred min- eral resources relative to the pit led the company to initiate an 8,500-m drilling program designed to convert inferred min- eral resources to measured or indicated mineral resources in areas that could expand the pit shape. As of late April 2012, Vista had com- pleted 13 holes totaling 7,768.8 m. Based on initial assay results and visual logging of core with pending assays, Vista has increased the drill program from 8,500 m to 14,300 m and expects to complete the expanded program in late May or early June of this year. "Upon completion of the expanded drill program and the feasibility study on the Mt. Todd gold project, we intend to evalu- ate whether a larger process facility with higher throughput is warranted to improve the project's economics by optimizing economies of scale and the project life," Earnest said. Metals X and Westgold Agree to Merge Australian tin-producer Metals X and Westgold Resources, which has develop- ment projects in Western Australia and the Northern Territory, have agreed to merge, forming a company with a market capital- ization of A$330 million. Metals X current- ly holds a 26.98% interest in Westgold and is Westgold's largest shareholder. Metals X is 50% owner of the Renison Bell tin mine and concentrator in Tasmania, as well as the Rentails expan- sion project and the Mt. Bischoff tin deposit. The company is also pursuing development of its Wingellina laterite nickel-cobalt project in Western Australia, near the conjunction of the borders of Western Australia, South Australia and the Northern Territory. Wingellina project plan- ning calls for production of 40,000 mt/y of nickel and 3,000 mt/y of cobalt over a mine life of 39 years. Westgold's key assets are its Central Murchison gold project in Western Australia and its Rover 1 copper-gold proj- ect in the Northern Territory. The Central Murchison project has a current mineral resource of 2.7 million oz of gold in three deposits. Westgold's goal is to develop a multi-mine operation with a centralized mill producing 100,000 oz/y of gold over a 10-year period. At the Rover 1 project, Westgold is preparing to initiate a decline to provide a drill platform for conversion of resources to reserves and to establish detailed defini- tion of the proposed mining blocks. Westgold Chairman Michael Atkins said, "Westgold's board has held the view for some time that the company's pro- jects are not receiving appropriate recogni- www.e-mj.com