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Red Mountain Mining's Scoping Study at Batangas Gold Project nears completion

Last updated: 16:55 04 Mar 2014 EST, First published: 17:55 04 Mar 2014 EST

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Red Mountain Mining (ASX: RMX) is close to completing the Scoping Study for its Batangas Gold Project in the Philippines, which is now focused on the higher grade, near surface South West Breccia resource at the Lobo Prospect.

Already evident according to Red Mountain Mining managing director Jon Dugdale is that, "the study is likely to demonstrate a low capital cost, practical, proven technology based gold project.

"Which would take advantage of existing high grade, close to surface, gold resources with demonstrated high recoveries from carbon in leach processing."

The lower tonnage higher-grade focused processing plant is now planned to be located at Lobo, close to the SWB resource and the old Lobo mine.

The Study, which examines the viability of a gold mining and processing operation at Batangas was originally focused on the Kay Tanda West resource at the Archangel prospect.

Dugdale said further: “Anything else that we discover at Lobo as a result of our current exploration program will potentially add to the current resource inventory and enhance the economic viability of the planned operation.”

Scoping Study

While the processing plant was previously to be located at the larger, but lower grade Archangel resource, the new focus at Lobo is expected to greatly reduce capital expenditure and minimise the environmental footprint whilst greatly enhancing overall economic returns.

Under the updated plan the processing plant will be located close to the initial planned feed from the high grade SWB resource at Lobo. 

The company will also target the highest grade ore at the Kay Tanda West resource at Archangel by transporting it approximately 12 kilometres by road to the Lobo processing plant following processing of the SWB resources.

The initial mining and processing project, the subject of the Scoping Study, will be entirely based on surface mining of existing higher-grade resources. 

Sedgman Ltd is finalising processing capital and operating costs that are expected to be relatively low, particularly when initially processing the high grade SWB resources at Lobo.


Lobo

Surface exploration at the Lobo Prospect continues to return high grade gold results with the latest trenching extending the previous Trench 19 to 8.35 metres at 18.3 grams per tonne gold from 4.9 metres at 24.9g/t gold and new results from Trench 21 of 6 metres at 31.2g/t gold including 1 metre at 122.6g/t gold.

Preliminary results from its drilling campaign have confirmed the SWB lode extension with one hole returning an intersection of 1.5 metres at 8.07 g/t gold from 5.25 metres downhole including 0.5 metres at 12 g/t gold.

Resources have been defined for the SWB shoot, totalling Indicated and Inferred 194,000t at 7.2 g/t gold for 45,000 ounces of gold. 

This includes an Indicated Resource of 178,000t at 7.4 g/t Au for 42,000 ounces of gold and an Inferred Resource of 16,000 tonnes at 5.3 g/t gold for 3,000 ounces of gold.

 

Analysis

Completion of the Scoping Study and financial modelling is expected shortly. Based on a highly positive expected economic outcome, Red Mountain will then contemplate committing to a bankable feasibility study and final permitting to fast track the project to production.

 

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