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A1 Consolidated Gold, PYBAR mobilise for imminent production


A1 Consolidated Gold (ASX:AYC) is set to begin work at its namesake gold mine in Victoria next week with contracting partner PYBAR Mining Services and an aim to achieve ore production by March.

The first two months of work are expected to focus on a rapid decline development to access an underground stockwork zone.

The A1 mine resource base is 1.42 million tonnes at a grade of 6.2 g/t gold and 281,200 ounces of gold that is amenable to low-cost bulk-tonnage mining techniques.

The game changer for A1 was the acquisition of the 150,000 tonnes par annum CIL gold processing facility.

Gold production from the stockwork zine is expected in the first quarter of 2016, with mining and ore processing scheduled to achieve a rate of 150,000 tonnes per annum.

Gold production is forecast at 30,000 ounces per annum at the project.

A Scoping Study for the A1 mine has a C3 cost of A$849 an ounce, which based on today’s gold price of over A$1,500 an ounce provides for gross margins of $650 per ounce.

Considering an output rate of 30,000 per annum, this margin allows for gross revenue of A$19 million.

Extension work at the site in the form of a diamond drilling program of 6,000 metres with two full-time rigs will be funded from the cashflow.

This development work in the mine’s Maldon and Walhalla areas is expected to expand the operation to a rate of 50,000-60,000 ounces per annum.

In the long term, the company – which counts Fortescue Metals (ASX:FMG) chairman Andrew Forrest as a shareholder – is planning to become a +100,000 ounce per annum producer through exploration success and acquisition.

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