CAN MAHDIA GOLD PRODUCE 500,000 OUNCES A YEAR FROM THE OMAI MINE?
Guyana expects Omai mine to stimulate future prospects
By: by David Robertson -- The Northern Miner
http://www.northernminer.com/news/guyana-expects-omai-mine-to-stimulate-future-prospects/1000132587/
A new gold
mine is about to enter production in this South American nation which is
of major significance not only to the owners, Cambior (TSE) and Golden
Star Resources (TSE), but to the country.
The open pit Omai project,
about 100 miles south of the national capital, Georgetown, is expected
to produce 250,000 oz. per year during the first three years of
production and bring Cambior's annual output of the yellow metal to more
than 500,000 oz.
And, to be counted among
the larger of the South American gold mines when it comes on stream
toward the end of this year, Omai will almost quadruple Guyana's current
gold production of about 69,000 oz.
"We feel this kind of
development will help to put Guyana on the map," Winston King, executive
chairman of the Guyana Natural Resources Agency, told a group of
Canadian journalists. King said the Omai mine will have "a demonstration
effect" which should act to draw other foreign investment. The
journalists were invited to tour the mine site in its preproduction
state (construction has been ongoing 24 hours per day, seven days per
week) during the first half of September with Cambior President Louis
Gignac and other project officials.
"We'll start feeding the
mill in November and probably reach our commercial production rate in
December," Gignac said. The official opening for Omai is planned for
February, 1993.
Cambior is the operator and
has a 60% interest in the project; Golden Star has a 35% interest and
the Guyanese government a 5% interest. (Golden Star has granted Cambior
options to increase its ownership to 70%.) Omai mine manager is George
Bell.
The mill referred to by
Gignac, a $42-million facility designed by Kilborn and being put
together on site from material shipped from North America, will have a
rated capacity of about 13,200 tons (12,000 tonnes) per day. Mill
manager Eric Konigsmann said he hopes to be able to boost throughput to
15,500 tons per day within six months, and eventually to 17,500 tons per
day with the addition of extra equipment. "The ore is very clean,"
Konigsmann said of the low-grade material which is free of base metal
mineralization. A gold recovery rate of 93.5% is anticipated. A diesel
plant is providing electricity for the project.
Current Omai reserves stand
at 44.7 million tons grading 0.048 oz. gold per ton. At scheduled
operating rates, enough material has been delineated to give the project
a 10-year mining life. Operating costs are expected to average US$185
per oz. during the first three years of commercial production, and stay
below US$200 per oz. during the life of the mine.
Workers at the project are
living on site and at the time of the visit there were about 1,100
persons (including 900 nationals) involved in the construction, placing a
strain on living quarters. Once built, the Omai project will house
about 600 workers. Wages range between US65 cents per hour for laborers
and US$1 per hour for tradesmen. (One U.S. dollar is worth about 125
Guyanese dollars.)
The mine site occupies
about 15 square miles of tropical rain forest. A 75-mile paved road runs
alongside the Demerara River between Georgetown and Linden (where
bauxite is mined). The Demerara River is navigable to the port of
Linden. Equipment and machinery being shipped to the Omai project are
unloaded at Linden and then trucked along dirt roads built by Cambior to
the mine site.
Senior mine geologist
Robert Crepeau described the Omai site as having a volcanic environment
similar to Canada. The gold is associated with a series of quartz
carbonate veins in saprolites.
Three zones will be mined:
the Fennell pit, the four Wenot Lake pits and alluvials. The largest of
the zones is the Fennell pit (named after Golden Star President David
Fennell) with about 38.6 million tons. Drilling indicates that
mineralization in the Fennell pit extends to a depth of 800 ft. "There
is the potential that the mineralization may extend to the east and west
(of the Fennell pit) and between the pits," Crepeau said. Planned is a
mining rate of about 27 million tons of ore during the first five years
of operation. The average waste-to-ore stripping ratio will be 3-to-1.
The Omai area has been the
site of gold exploration and production for about 100 years. In the
1889-96 period, local prospectors, known as "pork-knockers," were
active. In 1896, a German syndicate acquired the area, engaging in
drilling and tunnelling before selling the property in 1907.
Pork-knockers then worked the area.
In 1937, Ventures Ltd. of
Toronto acquired the property; no record of that company's program is
available. In 1947, Anaconda British Guiana Mines acquired the project
and installed a bulk-sampling plant; the company terminated operations
there in 1950.
In 1985, Golden Star
acquired the Omai project. Two years later, Placer Dome (TSE) entered
into a joint venture agreement with Golden Star, only to pull out in
1990 after conducting an exploration program. Cambior replaced Placer as
the operator of the joint venture in May, 1990.
Cambior announced a
production decision in September, 1991; the Omai construction cost
including working capital was estimated to be US$163 million. Cambior
then negotiated a 330,000-oz. gold loan worth up to US$120 million to
finance 75% of the total investment; the balance is being drawn from
Cambior's cash reserves.
A banking syndicate led by
the Royal Bank of Canada and Chase Manhattan Bank of Canada granted the
gold loan. A Canadian federal government agency, the Export Development
Corp., awarded Cambior political risk insurance coverage worth up to
US$163 million.
The Guyanese government has
done an about-face regarding its policy on foreign investment inside
Guyana. In the 1970s, the government nationalized the bauxite mining
operations of Alcan and Reynolds but according to King, there is now no
policy of nationalization. "We believe private enterprise is the way to
go," he said.
Currently, managing
Guyanese bauxite producer Linden Mining Co. (known as Linmine) is the
Australian company Minproc, which was contracted by the government to
raise Linmine's profitability with a view to divestment. King said
Guyana recorded economic growth of 6% in 1991 and the government is
projecting similar growth for 1992.
Mahdia Gold Historic Drilling Holes OMU-23
To OMU 46 Including 54.88g/t Across 47 Meters, 682.62 g/t Across 33
Meters and 3.54 g/t Across 87 Meters, Omai Guyana
TORONTO, ONTARIO--(Marketwire - June 29, 2012) -
Mahdia Gold Corp. (CNSX:MGD) ("Mahdia"), working with AMEC Earth and
Environmental Consultants Inc., wishes to announce that it has been
reviewing the heritage of historic drilling results from the Omai
Project subsequent to a detailed review of the drilling database which
included the drilling results released by Cambior August 3, 2006 (see
http://www.sedar.com/CheckCode.do;jsessionid=0000ZTPa_Li_T-pkSmT_RtjI3K2:-1).
This program, which consisted of 44 diamond drill-holes, was completed
during the period 2006 to 2007. Cambior released the results from holes 1
to 13, with a total of 6,323 meters, but Mahdia has found no further
public disclosures. The results were encountered by the technical team
during a review and audit of the drilling database. In the interest of
timely and complete disclosure, Mahdia is hereby presenting an update
and review of these significant results. Some holes did not reach target
depth. All of the drill-holes were completed by Major Drilling under
the supervision of IAMGold. Due to the volume of data the summary table
will be presented in two releases.
The Fennell deposit was mined by an open pit to an
average depth of 250 meters, which terminated along a barren diabase
dyke cited herein as the "Omai Sill". The Fennell Pit was the main
contributor to the Omai gold operation with a cumulative production of
49,082,000 tonnes at 1.50 g Au/t for a gold content of 2.37 million
ounces of gold. From its inauguration in 1993, until the end of its
operations in the third quarter of 2005, the Omai gold mine was operated
as an open-pit operation with a cyanidation and carbon-in-pulp (CIP)
processing plant. It is located in Guyana, South America, 160 kilometers
south of the capital city of Georgetown. The mine produced over 3.7
million ounces of gold, 1.6 million ounces in excess of the production
originally forecast by the feasibility study.
Two holes drilled in 1997 confirmed that the barren
diabase dyke (now referred to as the Omai Sill) had a thickness of 180
meters and that the gold mineralized quartz diorite intrusive extended
below the Sill. Cambior dewatered the pit in 2006 to perform a surface
drilling program from the top of the sill to test the target at depth
and identify mineral resources in the context of a potential 6-8000
tonne per day underground mining operation. Cambior had identified a
sub-horizontal zoning in the gold mineralization and the drilling was
primarily vertical to sub-vertical with some holes angled to define the
geometry of the quartz-diorite intrusive at depth. Hole OMU-12 remained
within in the quartz-diorite intrusive over a length of 650 m below the
barren sill, where it was stopped due to the limitations of the drilling
rig. The system remained open to expansion. The reader is referred to
the Cambior news release for the original disclosure on holes OMU 1 to
OMU 13.
The Cambior program was managed using
well-established Analytical Quality Assurance Programs to control and
assure the analytical quality of assays, including the systematic
addition of blank samples, reject and pulp duplicates, and certified
standards to each batch of samples sent for analysis. The in-house assay
facility at Omai Gold Mines Limited was used as the primary lab.
Samples were assayed by fire-assay followed by atomic absorption or
gravimetry according to industry standards. In addition, 10% of the
pulps from the primary lab were sent to a second certified laboratory
for analysis. Consequently, Mahdia considers these results to be very
credible despite the fact that no original assay certificates are
available to Mahdia at this time. A qualified person has not completed
the work necessary to verify the historical estimates as mineral
reserves or resource for purposes of National Instrument 43-101. Mahdia
is not treating the historical mineral resource estimates as National
Instrument 43-101 defined current resources or reserves. The historical
estimates should not be relied upon. This property will require
considerable further evaluation, which Mahdia's management and
consultants intend to carry out in due course. In this context, Mahdia
is citing the historic Cambior disclosure only. The readers are also
referred to the website for geological cross sections to clarify the
context of these drill-holes.
The complete tabulation of the results and the
weighted average values of the intercepts with applied cut-off grades of
0.3, 0.5 and 0.8 grams per tonne are set out in the website. The
disclosure presents the intercepts calculated using a 0.3 g/t cut-off.
This choice of cut-off does not imply application of any economic
criterion but was selected to provide a consistent and easily understood
data set to the readers.
This table is a summary of the results for holes OMU
23-46 for which data is now available. Holes 1-22 have been presented in
the first release due to the volume of information in the tables. The
complete data set and calculation of intercepts at cut - off grades of
0.3, 0.5 and 0.8 grams per tonne are available for inspection at
www.mahdiagold.com., but for brevity the following guidelines were
applied: The cut-off grade is applied so that any three contiguous
samples which are below cut - off grade are removed from the interval
and subsequent materials exceeding cut - off grade are included in a
separate intercept. Any values which exceed 31.0 grams per tonne are
capped at 31.0 grams per tonne. The capping procedures applied differ
from those used by Cambior because the high grade values are related to a
late stage crosscutting vein with a distinct population distribution
from the lower and more abundant values of the disseminated diorite
hosted material. Both uncapped and capped grades are cited in the
selected intervals. The application of these procedures to the data
review does not imply an application of rigorous economic screens to the
evaluation. This table is presented to introduce the shareholders to
these significant historic data which shall be included in the ongoing
program of data compilation, audit and verification sampling and
drilling, and (when all data are available in form compliant with
NI-43-101) a resource estimate.
Mahdia is working through the process of
rehabilitating and recovering, as much as possible, the split core from
the OMU drilling program or reclogging and re-sampling by diamond saw
cutting. Some sections are sufficiently preserved that such audit
sampling is possible and the sampled intervals will correspond to the
one meter interval split by Cambior in the OMU program. Mahdia is also
proceeding with a program of four deep angle drill-holes to test the
complete diameter of the Fennel Mineralized system including
verification of the volumes previously tested and extension well below
and beyond those historic intercepts to test for further expansion of
this major mineralized volume.
David Bending, President and Director of Mahdia Gold
Corp., reports "Mahdia is advancing its understanding of the geology,
substantial size, expansion potential, and hydrology of the Fennel
Targets with its drilling and ongoing core and data review. These
significant results firmly support our confidence in the importance of
the Fennel Targets and the Omai redevelopment program in general."
Mr. Bending manages Mahdia's exploration and
development programs and is the Qualified Person as defined by National
Instrument 43-101. He supervised the preparation of the technical
information in this release.
Forward-Looking Statements
Information set forth in this news release may
involve forward-looking statements under applicable securities laws. The
forward-looking statements contained herein are expressly qualified in
their entirety by this cautionary statement. The forward-looking
statements included in this document are made as of the date of this
document and the Corporation disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as expressly
required by applicable securities legislation. Although Management
believes that the expectations represented in such forward-looking
statements are reasonable, there can be no assurance that such
expectations will prove to be correct. This news release does not
constitute an offer to sell or solicitation of an offer to buy any of
the securities described herein and accordingly undue reliance should
not be put on such. Neither CNSX Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the CNSX) accepts
responsibility for the adequacy or accuracy of this release.