Leyshon Resources
See more information about Leyshon Resources
Leyshon Resources reduces costs at Zheng Guang by almost 20%
Following several months of review, Leyshon Resources today announced significantly reduced capital requirements for the Zheng Guang gold project in Heilongjiang in northeast China. A revised design for the mine development envisages a lower initial throughput based on a single ball mill and crushing circuit which can be ramped up quickly from an initial 175,000 tpa throughput to 750,000 tpa in due course. This has resulted in a reduction in the up-front capex costs of almost 20%, from the original US$59 million to US$48 million. Leyshon and their consultants – Minarco-MineConsult – are now working on a Bankable Feasibility Study which will incorporate the revised parameters and an optimised pit design, which could be completed in as little as 3 months. Key points to come out of preparatory work for the BFS include:
· Production and processing of 750,000 tonnes per annum of open pit ore with mine diluted grades of 2.66 g/t Au, 10.41 g/t Ag and 1.06% Zn.
· Annual production of 48,000 ounces of gold, 160,000 ounces of silver and 6,800 tonnes of zinc in concentrate.
· Capital cost of US$43.92 million including government imposts and an estimate of working capital of US$ 4.4 million.
· Total operating cost of US$26.35 per tonne, inclusive of mining, processing and overhead.
· Annual revenue of US$52.92 million at current metal prices.
The study has not evaluated the mining and treatment of oxide, lower grade ore or extensions to the Main Ore Zone which collectively have the potential to significantly extend the initial mine life beyond the initial 7.2 years. The Study will also cover potential future throughput expansion to 1.5 million tonnes per annum.
Permitting is well advanced, with the Land Acquisition Plan having been approved and the Business Licence renewed for a further 15 years. Leyshon anticipate being able to lodge the documentation for the final mining licence before mid-year. The revised mine plan has the approval of Heilongjiang Bureau of Geology and Mineral Resources and the relevant local municipal and provincial authorities, who are keen to see Zheng Guang and other recent discoveries become a key part of the regionaql development strategy. This support, together with the recent briefings delivered by Austrade, should help expedite the permitting process.
Funding has not yet been sought formally, though the company are in confidential discussions regarding an indicative term sheet. Commercial discussions with potential buyers of Leyshon’s interest in Zheng Guang are also continuing.
Cash conservation has remained a priority, with monthly outgoings down to A$150,000 per month, and cash now stands at A$4.6 million.
Other Leyshon Resources news
- Leyshon Resources enters agreement to sell Zheng Guang project
2009-09-22 - Leyshon shares suspended on forthcoming announcement about Zheng Guang project
2009-09-18 - Low-cost gold stock well placed to sit out the winter
2008-11-27
