New SA gold miner pushes ahead development

South Australia’s newest gold project is targeting their
first pour in just over 12 months.

Havilah Resources have annoiunced a good start to
development of the Portia Gold Project, located near the Bimbowrie Conservation
Park , and will be starting production by 1 July.

Havilah managing director Dr Chris Giles said mining of the
open pit began on schedule at the end of March, with site preparation completed
in about six weeks.

“The 50-person Portia camp and associated workshop are fully
operational with some 40 personnel already on site,” he said.

“Workers are being bussed in and out of Broken Hill on a
10-day on and 5-day off roster.”

The mining contract has been undertaken by Broken Hill-based
mining and civils group Consolidated Mining and Civil.

Giles said the mining schedule would see first gold ore
delivered to the processing plant by June 2016, and that based on the current
gold price and exchange rates, the Portia gold mine stands to deliver
substantial returns to Havilah in 2016.

“Under the contract terms, Havilah will not be required to
raise additional capital to meet its obligations because all mining costs will
be funded by the mining contractor, including the rehabilitation bond
obligation,” Giles said.

“Havilah is in effect sharing a portion of the gold revenue
with the mining contractor, which will fund the cost of delivering the gold ore
to surface for processing.

“This allows the Portia gold project to proceed without
Havilah taking on onerous conventional loan terms or a significant dilution of
existing shareholders as a result of issuing additional equity.”

Giles said that with the mining fully funded and Havilah
responsible only for processing costs, shareholders could look forward to
significant returns from gold sales in 2016, putting Havilah in a good position
to advance development of other projects such as the much larger neighbouring
Kalkaroo copper-gold deposit.

The Portia mine has a JORC Inferred Resource of 720,000
tonnes at 2.9g/t for 67,000 ounces of contained gravity recoverable gold.

Sampling at the project has turned in flake gold up to 5mm in size.

The mining plan which incorporates optimised open pit design
aims to recover at least 80 per cent of the resource, with an upside potential of
unquantified gold known to occur in the underlying bedrock .

Havilah Resources (ASX: HAV) is currently trading at $0.235,
roughly the same price as this time last year.

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