The goldfield at Charters Towers covers a large area and therefore is being developed through accessing the ore bodies in several areas and interconnecting the mines where possible. There is a common management and equipment infrastructure that is available to the mines.
The first commercial gold production area is the Imperial mine (Warrior reef).
In addition to the Imperial mine Citigold also has substantial development works in the Central mine area including a 238 metre deep production size decline, two ventilation shafts and dewatering facilities. This mine has not yet reached target depth of 600 metres and is expected to resume going deeper.
Citigold is self-sufficient in water due to recycling. The Company dewaters the Central mines from its submersible pump located into the historic mine workings and the water is recycled into the gold extraction plant. The water is good quality meeting stock quality drinking water standards with a neutral pH 7 and drainage into the mine workings from rainwater averages a modest 10 litres a second. The water level has generally been maintained about 200 metres below the surface for over 10 years by pumping for a few days each week.
Imperial mine part of Major East-West Reef Structure
The Warrior reef, part of Imperial mine is on one of five large east-west mineralised structures that run sub-parallel to the historically large gold producing Brilliant and Day Dawn reef mines on Reef structure 1, Central mine.
Citigold's previous trial mining was on several cross reefs (striking generally north-south) such as The No. 2 Cross Vein, Washington and Stockholm reefs. Cross reefs historically were high grade and associated with the large east-west reefs but produced less gold.
The Warrior is the first east-west gold reef Citigold has mined and appears very similar to the large east-west structures further north that hosted the large bonanza grade Day Dawn, Mexican, Brilliant and Sunburst mines. Citigold is in a fortunate position of having existing infrastructure to help minimise the cost of expanding production. The gold processing plant is capable of 340,000 tonnes of ore per year and is designed to have the capacity increased if need arises.
The Imperial mine area will initially access into the eastern side of the Warrior gold deposits east-west strike line of the Reef Structure 5. The deposit has an overall length of 2 kilometres and has been tested to a depth of 300 metres. The overall Inferred Mineral Resource for Imperial (Southern Area) deposit is 17 million tonnes @ 14 g/t Au containing 5 million ounces of gold (rounded to 2 significant figures) (see Table 14-8 on Page 97 of the Technical Report Mineral Resources and Reserves 2012 Charters Towers Gold Project). Within the overall resource, head-grades and widths of the specific mining areas are expected to vary.
Mining operations at Charters Towers are by underground mining methods. The gold deposits are hosted in very strong granodiorite rock that has a compressive strength of 300 MPa or five times stronger than commercial grade concrete. This makes for good mechanised mining conditions.
The gold deposits are accessed by two Declines (downward sloping tunnels). The size is usually 5 metres wide by 5 metres high. This size allows access for all the mobile mining equipment that is used to extract the gold ore.
Mining method is modern drill and blast technique. The blast-hole drilling work is carried out by machines with single or dual drilling booms depending on the size of the work area. They drill holes that are loaded with specially formulated high impact explosives to break the rock. The broken rock is moved by large front end loading machines (Load-Haul-Dump units or LHD's) that move about 5 to 10 tonnes of rock each bite. The rock is loaded into 25 or 50 tonne capacity trucks and hauled to the surface.
Separate sacrificial tunnels are then excavated through the gold ore body at different levels. Holes are then drilled up between the levels for blasting to break the gold bearing rock ready for excavation and haulage to the surface. The underground tunnel system is complex and requires careful design and engineering based on the geological mine design setting out where the valuable ore is located.
The technical mining method is mechanised (long-hole open stoping on 15 metre sub-levels, trackless diesel haulage) which assists low-cost operations. Operating costs target A$400 per ounce at full production with current costs still favorable around A$550 ounce. The current gold sales revenue is strong at an Australian gold price around A$1,600 per ounce.
Gold bearing ore is hauled from the surface of the treatment plant by road trains on the approved local public heavy haulage road route to the gold extraction plant.
Increase in Planned Gold Production
As announced previously Citigold is to expand the Charter Towers Imperial mine reefs towards a target gold out put of 100,000 ounces per year.
The work program includes increased diamond core drilling and geophysics mapping of the ore zones to ensure that the development of these adjacent deposits is done in the most effective and efficient manner. Citigold's aim is to ensure the maximum amount of profitable gold is extracted. This drilling and geophysics will also assist to increase Citigold's conversion of Resources into Reserves.
The upgrade in gold production, from the current about 10,000 ounce per year rate, is expected to be focused around additional underground tunnels and development work. Citigold continues its focus of undertaking capital development of operations in an expenditure efficient manner.
(Updated June 2012)