South Australian company Southern Gold have reached a major milestone with their first pour from the Cannon Gold Mine near Kalgoorlie.
In a 50/50 profit sharing arrangement with Metals X, ore from the Cannon Open Pit Mine is processed through the Metals X Jubilee Mill, at their South Kalgoorlie operations.
With average plant recovery of 89 per cent, 16,243 tonnes of ore at a head grade of 2.42g/t resulted in recovery of 1125 ounces.
Gold prices hit a significant three month low on 6 November, making a slight recovery to close at $US1088.10 per ounce on 10 November, giving the Cannon pour an estimated value of $US1.2 million, or $1.73 million on the same day.
Southern Gold have reported an All In Sustaining Cost over the two year mine life of $1130 per ounce ($US800 on today’s market).
Southern Gold chairman Greg Boulton joined the first pour in person, saying it was gratifying to see the first gold pour become a reality.
“This is a significant milestone for the company and places it in an elite group managing to transition from explorer to producer,” he said.
“Now that Southern Gold has visibility to cash flow and many exciting opportunities to grow the production pipeline, the future looks very promising and encouraging for our investors.
“We look forward to taking the company to the next level.”
Cannon is expected to generate between $12 million and $15 million over the next 18 months, with Southern Gold focussed on drilling for new resources to add to mine life.
The Cannon pit is expected to run until 2017, with high probability flagged by Southern Gold for underground operations from 2018.