August 30, 2019
The company aims to develop a multi-pit, mining hub facility within hauling distance of CIP processing facilities in northwest Queensland.
The 225-hectare MLA is for mining only as Ausmex has the option to process ore from Golden Mile off-site at the Great Australia 600,000 tonnes per annum gold CIP processing facility in Cloncurry.
With Ausmex not planning to process ore on site, there is potential to fast-track the mining lease approval process.
The Brisbane-based consultants managing the application, which has been submitted to the Queensland Mines Department, indicate an approval time frame of approximately 9-12 months for the ML.
Joint venture project
Golden Mile is a joint venture project with Round Oak Minerals Pty Ltd, a subsidiary of Washington H Soul Pattinson and Co Ltd (ASX:SOL), which has 20% and Ausmex the remainder.
Under the JV agreement, Ausmex has the option to process gold ore at the Great Australia Mine Gold CIP processing facility owned by Round Oak.
Ausmex holds 12 granted mining leases within the Cloncurry region and nine of these with a combined area of over 200 hectares are all within hauling distance to third party ore processing facilities.
Potential near-term production
The combination of the Golden Mile application and current Mt Freda mining leases provides short-term potential to schedule development of a multi-pit, mining hub facility within hauling distance of CIP processing facilities.
As there are haul road facilities in place, this provides shareholders a very low capital requirement entry point into potential near-term gold production in 2020.
Shares have been by as much as 5% to an intra-day high of 11 cents.
Ausmex is continuing gold resource definition drilling across the Mt Freda Complex as it progresses towards a November 2019 maiden JORC resource estimate.
The company expects to begin a mine scoping study for the Mt Freda Open Cut ML2752 in December 2019 and aims to submit by March 2020 a plan of operation to recommence open cut mining activities.
Mt Freda open cut was previously operated by Diversified Mineral Resources from 1987 to 1991, producing about 30,000 ounces per annum at an average grade of 4 g/t.
Previous mining reports indicate recoveries of greater than 95% gold via CIP processing.
Mining ceased in 1991 following the fall in gold price to historical lows below US$300 per ounce.