AuStar Gold (ASX:AUL) CEO Tom de Vries talks about intersecting visible gold and imminent production at its historical Morning Star mine in the eastern Victorian goldfields.
Rachael:Hello I'm Rachael Jones, with the Finance News Network. Joining me from AuStar Gold (ASX:AUL) is CEO Tom De Vries. Tom welcome back to FNN.
Tom: Thank you Rachael. It's good to be back.
Rachael: Now first up Tom, we have to mention there are some terrible bush fires in your area at the moment. Have these had any impact on your operations at all?
Tom: Well, we are keeping a wary eye on the bush fires but they are well away and they have had no impact. We do keep an eye on the situation in case the circumstances change. So far it's well away.
Rachael: You have recently intersected visible gold at the historical Morning Star goldmine. Can you tell us about that?
Tom: We have been drilling the McNally Reef for quite a while and we have started development. We have intersected the reef as planned which is quite reassuring. The McNally Reef is a brand new un-mined reef which we diamond drilled extensively. To date on that development, it has not disappointed.
We are quite pleased. We have also restarted mining at Rose of Denmark, which we are continuing to diamond drill. We expect that diamond drilling to sort of lead to a future jewel resource.
As a result of this drilling and then mining at Rose of Denmark, we are mining above the added level with both mines giving us the opportunity to restart the process.
Rachael: As the announcement and Chairman Frank Terranova mentioned, production has started. How is this progressing and are plans on track?
Tom: Plans are well on track. In fact we are a little bit ahead of ourselves from where we expected to be. We are now processing all mines from Rose of Denmark as I previously mentioned. Also from the development of McNally's Reef. We have also undertaken additional work in the processing plant by improving it through the addition of a high speed centrifugal concentrator which recovers the gold and sulfides from the middling fraction. This concentrate will then be batch treated by Gekko Systems in a custom made intense Leach Reactor in the gold. Now, we're developing the McNally Reef, we're mining at Rose of Denmark. We are processing both with batch leaching of concentrate off site.
In addition to that we will still continue to pour bullion on site, as we have done in the past. It's all very positive.
Rachael: Thanks Tom. What are the main activities currently taking place?
Tom: Well, as explained production and processing has started. Processing will initially be on a week on, week off basis. With the main activities focused on maintaining that production in the medium term and long term if possible.
To ensure production we are developing and stoping McNally's ore body. We will also develop and stope the Stone's ore body. We are testing the Maxwell's ore body for development and we are looking to re-enter the Kenny's ore body and set that up for stoping. We are very busy. All that is in addition to mining further ore above the Rose of Denmark added. Whilst we still drill below the Rose of Denmark added.
Finally, we will also be shortly formalising our discharge permits with the EPA, which will then allow us to finalise official mine work plans with the Earth Resources Victoria. Although these permits have not hindered any of our works, it is just nice to remove that risk or any risk related to that.
Rachael: Now, to exploration. Will this still be a key area for AuStar?
Tom: Exploration is the key to building a future pipeline of production. We will ensure that it will not compromise our ongoing production effort. Our next step in our exploration effort is to validate the data that was identified in the recent announcement. This validation will be essentially feet on the ground doing basic geological mapping, geological fieldwork, then some repeated chemical testing. Once verified we will then apply for permits and start some serious exploration in the second half of the calendar year.
Rachael: Last question Tom. Is there anything else you'd like to add?
Tom: Well, only that we have been very methodical in our approach to production. We now think that we understand the geology of the area. We know we can process the ore and get full value with Gekko System's help. The next step for us is proving up a JORC resource and starting a broader exploration effort. We have been busy and it is going to get busier.
Rachael: Tom De Vries, thanks for the update.
Tom: Thank you Rachael. See you soon.