Maiden gold production by ERL contributes valuable cash flow
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Gold producer and explorer Empire Resources (ASX:ERL) has just completed its first processing campaign, resulting in the production of gold to the value of more than $2 million from its Penny’s Find project located in the Kalgoorlie region of Western Australia.
Total gold recovered from the processing of circa 22,000 tonnes of ore is expected to be in excess of 1500 ounces. Based on the current spot price of AU$1660 per ounce this would equate to a value of $2.4 million.
The calculated head grade of 2.38 grams per tonne gold was impressive. A further parcel of 16,000 tonnes of ore is currently being processed through Golden Mile’s Lakewood Mill at Kalgoorlie-Boulder.
Applying similar metrics, this should deliver gold to the value of circa $1.8 million, which would provide a significant boost to the company’s October cash flow.
At the same time, it’s worth noting that this is an early stage play and investors should seek professional financial advice if considering this company for their portfolio.
Commenting on these developments, ERL’s Managing Director, David Sargeant said, “The first treatment campaign has confirmed the free milling nature of Penny’s Find ore and its high gravity gold recoverable component”.
The company completed the second round of grade control drilling in September which has provided further confidence in the geological model being used for Penny’s Find. This should see the open pit mining operations accessing the deeper higher grade part of the orebody in the near term.
Given the total average open pit grade to a depth of 80 metres is 4.6 grams per tonne gold there is the prospect that the company will benefit substantially from higher grade ore recovered at depth.
ERL’s share price has increased by approximately 50 per cent in the last two months, but further upside is possible as the company is recognised as a producer as well as an explorer with a highly prospective asset in the Penny’s Find project.
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