AuStar Gold Limited (ASX:AUL) Chairman, Frank Terranova provides an update on the company's projects, including plans to commence mining at its Morning Star and Rose of Denmark mines in the eastern Victorian goldfields.
Rachael Jones: Hello I’m Rachael Jones for the Finance News Network. Joining me now from Brisbane, from AuStar Gold Limited (ASX:AUL) is Chairman, Frank Terranova. Frank, welcome back to FNN.
Frank Terranova: Hi Rachael and thanks for the opportunity to tell your viewers about AuStar.
Rachael Jones: AuStar Gold is focused on goldmining in eastern Victoria, between Woods Point and Walhalla. Can you tell us more about this?
Frank Terranova: The Company’s at a very exciting time in its development, having recently announced that we’re about to commence mining and producing gold, from our historic Rose of Denmark and Morning Star goldmines. The Woods Point Walhalla goldfield was one of the most prolific goldfields in Australia in its day, posting some very high grades of gold in the ground. The Morning Star mine itself produced over 830,000 ounces of gold at its peak, with ore averaging more than 26 grams a tonne. And that’s a very impressive grade.
Over recent years, AuStar has consolidated many of the holdings in the area. And now has a modern, efficient processing plant at the Morning Star mine, the only one in its region. So we’ve carried out extensive drilling and identified some very exciting high-grade underground zones. And we’re now going to mine and produce some gold.
Rachael Jones: Now to your projects in more detail. What can you tell me about the Morning Star goldmine?
Frank Terranova: With respect to the Morning Star goldmine, Rachael, we have already commenced underground development work. Processing ore through the Morning Star gravity plant is expected to be undertaken, towards the latter part of this month. The bulk of the material for plant feed initially will come from the newly discovered McNally’s Reef, at Morning Star. And then additional feed will come from the Rose of Denmark mine, whilst we continue to develop our next reef, being Stone’s Reef, at the Morning Star mine.
Rachael Jones: What’s happening with exploration?
Frank Terranova: With respect to our exploration efforts, we continue to routinely deliver high-grade hits from our newly discovered McNally’s Reef. We’ve had intercepts running as high as 170 grams per tonne of gold, over reasonable lengths. Including small sections approaching 1,000 grams per tonne. So we’re reasonably confident that our exploration team continues to build, a valuable mining inventory.
We also have extensive land holdings in the region and have carried out a major independent review, over the tenement package. Which has helped us understand better, the geology and identify areas of greatest prospectivity. This will enable us to prioritise our exploration program. Our near-term focus relies very much on the exploration team, continuing to put in place a pipeline of mining inventory, so that we can maintain steady supply of high-grade ore to the mill.
Rachael Jones: Now to strategy and financials. Where is the company headed and how is progress?
Frank Terranova: We fully expect that our mining operations and processing efforts will generate, positive cash flows for us. They maybe initially modest at the outset, but as we build our production volume, over time we expect to build cash flows up. And this will help us to fund additional exploration and development efforts. We also believe that we have a major opportunity, to participate in potential regional consolidation of gold projects, as we have the only operating and permitted processing plant in the area.
Rachael Jones: Last question now before we let you go Frank. Is there anything else you’d like to add?
Frank Terranova: I think from an AuStar (ASX:AUL) perspective, I have absolute confidence in our operational and exploration team, to continue to source high-grade gold for the plant. And continue to grow the prospects at the Morning Star and Rose of Denmark mine. I think the development is moving at the right pace. The Aussie dollar gold price is at close to record levels and the outlook remains positive. So in essence, we’re taking the approach of crawl, walk, run. But I think the near-term prospectivity of AuStar, remains very positive.
Rachael Jones: Frank Terranova, thanks for the update.
Frank Terranova: Thank you very much for your time.