The project now has proven and probable reserves of 34 million tonnes grading 0.9 grams per tonne gold compared to Xstrata’s reserves of 65Mt at 0.9gpt gold. Resolute used a gold price of $540 per ounce to calculate the updated figure.
For the financial year just finished, a total of 225,700 ounces were depleted from the reserves through mining.
The downgraded reserves come from 233,120oz at Mt Wright and 35,690oz at Nolan’s – which now both have no reserves – with resources at the two deposits of 10.5Mt at 2.9gpt gold for 971,969oz and 7.4Mt at 1gpt gold for 245,667oz respectively. All reserves at Ravenswood are now contained in the Sarsfield deposit.
“From our perspective we felt more metallurgical test work needed to be done on those resources before we’d be happy to sign off on them as reserve ounces,” Sullivan told MiningNews.net.
Sullivan said the company had conducted due diligence on the project when it acquired it from Xstrata in January for US$45 million. Xstrata marked Ravenswood for divestment following the takeover of coal and base metal icon MIM Holdings in 2003.
“We were happy we were putting a price in for what we thought the value of it was.
“We had doubts in our minds about it but to do this (review) exercise takes a fair bit of effort and it wouldn’t be something you would normally do in a due diligence exercise – a re-look at the whole mine operating plan.
Sullivan said the revised reserve and resource figures did not affect the production plans for the project going forward. The low-grade project is currently seen as a six-year operation producing 200,000 ounces per annum.
The reserve downgrade did not breach any debt covenants and Sullivan said debt providers had been kept informed from the beginning of the review.
The review at the project also included a re-optimisation of the Sarsfield pit, which will now be smaller, with the new pit design excluding some high stripping and improving the financial outcome, according to the company.
Plant throughput will be increased to around 5.5Mtpa with the head grade unchanged. Cash costs are expected to reduce to a targeted $425 per ounce. In the June quarter Ravenswood produced 46,991oz of gold from 1.31Mt of ore at a head grade of 1.29gpt and cash costs of $474/oz.
Resolute shares were up nearly 5% to $1.13 in early afternoon trade.
