TIDMGRL
RNS Number : 2613L
Goldstone Resources Ltd
30 December 2022
30 December 2022
GOLDSTONE RESOURCES LIMITED
("GoldStone" or the "Company")
Operational Update
GoldStone Resources Limited (AIM: GRL) is pleased to provide an
operational update in relation to mining and production activities
at the Homase Mine and exploration activities at the former
Akrokeri Underground Mine.
Overview
-- 5,153 troy ounces of gold produced and sold to date from the
Homase Mine, realising an average price of US$1,794 per oz for
revenues of US$9.3m.
-- Gold loan repayments from gold via the delivery of 675 troy
ounces to Asia Investments Management Services Limited ("AIMS"),
have been delivered.
-- 2022 production target of 7,000 ounces of gold (RNS: 30
September 2022) not yet achieved, but the shortfall ounces remain
within the heap at various stages of recovery.
-- Further improvements being made to the dry plant to improve
gold recovery from the current recovery rate of approximately
65%.
-- Pit 1 and Pit 2 increase in available mineable resource
demonstrated from geotechnical drilling which would strongly
improve economic performance.
-- Further drill results from Q4 diamond drill programme at the
former high grade Akrokeri Mine expected in early Q1 2023.
Emma Priestley, Chief Executive Officer of Goldstone,
commented:
"GoldStone continues to make progress with mining and production
activities at Homase as it lays the foundations for an expanded
mining operation through the development of proximal priority
targets, which are being reviewed and include the high-grade
Akrokeri Underground Mine.
"We continue to move in the right direction in terms of our
production, however, notwithstanding this, there remains room for
improvement in recovery rates and we have seen significant
volatility in the supply and pricing of consumables, reagents,
structural steel, heavy equipment, and fuel, all of which are
required for constructing and maintaining a modern mining
operation. This creates challenges in estimating capital and
operating costs, particularly when estimating future costs. We
think it is well understood that the current unreliable situation
has arisen largely from a combination of Covid-19, the war in
Ukraine, and global inflation. While we are all growing
increasingly frustrated by citing these as factors which prompt
manufacturing and delivery delays, it appears to be a reality that
we must accept in the short term at least.
"Whilst the Company expects these challenging factors to
continue into Q1 2023, we also fully expect to continue to overcome
them as well as improving our processing and extraction to improve
recovery rates. Our outlook for the Company remains positive and we
are striving to accelerate development in 2023."
Further Information
The Company announces that the Homase Mine has produced and sold
5,153 troy ounces of gold to date, realising an average price of
US$1,794 per oz for revenues of US$9.3m. From this, gold loan
repayments from gold via the delivery of 675 troy ounces to Asia
Investments Management Services Limited ("AIMS"), were
delivered.
The 5,153 ounces of gold produced does not include the estimated
192 ounces of gold, amounting to some USD350,000, that were stolen
in the robbery, announced 29 June 2022, in relation to which
investigations are on-going with the target of pursuing charges on
those responsible.
The 2022 production target of 7,000 troy ounces of gold, as
announced 30 September 2022, has not yet been achieved, but the
shortfall ounces remain within the heap at various stages of
recovery. The Company has had some persistent agglomeration delays,
further to the 24 March 2022 announcement, which continue to be
causing some shortfall in recovery, this together with inclement
weather which has affected the stacking of the material and the
overall recovery of gold. The recovery rate to date has remained at
approximately 65%. The Company continues to test and assess
agglomeration methods to resolve and improve recovery factor.
Testwork is showing very high recovery potential (in excess of 80%)
and the Company is currently making further improvements to the dry
plant, particularly the screening and application of cement into
the agglomeration plant, to improve recovery rates.
Notwithstanding the processing challenges, experienced during
2022, external factors have materially disrupted development and
production, with supply shortages and volatile markets for currency
and consumables being affected by inflation in Ghana which was
reported to be running at 50.3% in November 2022 (Source: 2022;
tradingeconomics.com/ghana/inflation-cpi). Staff recruitment, due
to skill shortages, has also presented difficulties, as we migrate
from being a development company into managing steady production
and building on it. These issues are being shared by the industry
as a whole and are likely to continue in the short term.
The mine has not yet achieved consistent positive site-level
cash flow, with an average All-in Cost ("AIC") of US$1,369 per
ounce average for 2022, which is primarily due to a
lower-than-expected production rate and ongoing inflationary
pressures mentioned above, in particular in relation to fuel,
spares, consumables and reagents. The Company is currently
reviewing the operating costs for possible cuts and increased
efficiency.
The Company is taking proportionate and appropriate steps to
improve 2023 production at Homase Mine, by increasing production
and expanding the mineable resource . This is combined with
extensive training and recruitment to establish an in-country team
of seasoned committed local professionals who will be capable of
taking the mine through and beyond the development phase by
expanding and improving all areas of production.
The additional agglomeration and stacking circuit is being built
to improve productivity and heap stacking, using existing cash
resources. To date, the Company has had an average stacking rate of
some 15,000 tonnes pcm onto the heap leach pads. The Company is
aiming to have doubled the rate of production level by June
2023.
To date, some 202,000 tonnes @ 1.5g/t of oxide ore has been
mined and stacked on the heap leach pads. This equates to
approximately 9,742 ounces of contained gold, on the life of mine
recovery of 82% this should yield 7,988 ounces of gold. The Company
is currently reviewing the material on the heap leach pads with
testwork, in order to re-assess the economics of re-handling it.
This is in conjunction with mining the remaining oxide ores from
the first pit of the Homase Mine, some 120,000 tonnes at an average
grade of 1.6 g/t, which will require a further push-back of the pit
walls to access the ore in the hanging wall and pit bottom.
At all stages of the development of the Homase mine, ESG &
Sustainability considerations were given high priority. The Company
has provided significant employment opportunities and is generating
business for local suppliers and entrepreneurs. The Board remains
mindful GoldStone is operating in a rural area with villages
surrounding the mine and is determined to make every effort to
ensure that the Company is a good neighbours and a good long-term
stewards of the local environment.
Mineable Resource
From the geotechnical drilling undertaken earlier in 2022 within
the first two pits, taking the pits 1 and 2 down to approximately
of 120 metres and 80 metres respectively, initial assessment has
shown that a tightening of the slope angles is possible, allowing a
reduction of the stripping ratio from 10:1 (12 November 2020) to
7.4:1 in pit 1 and around 6:1 in pit 2. This strongly improves
economic viability, and the Company can report that there is an
increase in the available mineable resource, as estimated by the
Company, is set out in Table 1.
Table 1 - Management Estimates for the Mineable Resource within
Pits 1 and 2
Mineable Resource Estimate
Tonnage Waste Tonnage Oxide Tonnage Fresh Grade (g/t) Oz
-------------- -------------- -------------- ------------ -------
Pit 1 ext. 120m 8,188,471 112,950 1.6 5,978
-------------- -------------- -------------- ------------ -------
Pit 1 ext. 120m 988,200 1.5 46,747
-------------- -------------- -------------- ------------ -------
Pit 2 40m 1,356,027 446,783 1.1 15,803
-------------- -------------- -------------- ------------ -------
Pit 2 ext. 80m 2,345,470 399,245 1.1 14,121
-------------- -------------- -------------- ------------ -------
From the grade control drilling, carried out to 40 metres for
the pits north of the original open pit mined by AngloGold Ashanti
in 2002/03, the mineable resource has been assessed, by the Company
in Pit 4 and Pit 3, which is an extension of Pit 4, , and the
Company's estimates for these northern Pits along the Homase Trend
and are set out in Table 2 below.
Table 2 - Management Estimates for the Mineable Resource within
Pits 3 to 6
Mineable Resource Estimate
Tonnage Waste Tonnage Oxide Tonnage Fresh Grade (g/t) Oz
-------------- -------------- -------------- ------------ -------
Pit 3 40m 764,298 214,875 1.1 7,228
-------------- -------------- -------------- ------------ -------
Pit 4 The former AGA Pit - Mined 2002/3
---------------------------------------------------------------------
Pit 5 40m 5,652,653 951,625 1.1 33,660
-------------- -------------- -------------- ------------ -------
Pit 6 20m 184,358 55,224 0.7 1,776
-------------- -------------- -------------- ------------ -------
The above tables set out the latest management estimates for the
mineable resource, which has increased from those announced at 24
March 2022 and 12 November 2020. The mineable resource is within
the confines of the 602,000oz JORC (2012) resource previously
announced.
The locations of the Pits are set out at Figure 1 below:
Figure 1: Homase Mine - Pit Locations
Wardell Armstrong International Ltd. have been appointed to
undertake an independent review of the mineable resource and mine
planning of the Homase Mine, which includes an independent review
of the Grade Control drilling at the third pit along the Homase
Trend which was completed earlier this year, which is expected to
be completed in Q1 2023.
Exploration
Diamond drilling commenced at Akrokeri Underground Mine with the
initial drilling results, announced 27 September 2022, confirming
the continuity of the mineralised zone at vertical depths of
between 36 metres and 65 metres and extending a minimum of 180m
beyond the known southern limit of the mine. The results from the
remainder of the drill programme are currently being reviewed, the
Company expects this review to be competed within the first few
weeks of 2023.
The Company has undertaken further geochemical soil sampling
programmes within the Homase and Akrokeri Licence areas, as infill
and to seek parallel zones of mineralisation, following the
programme carried out in 2018. The anomalies that were identified
and announced in the 24 March 2022 are being explored with further
soil sampling and augering.
Competent Person's Review
The technical information within this announcement has been
reviewed and approved by Klaus Kappenschneider, an independent
geologist with 30 years' experience in gold mining, exploration and
resource estimation. Klaus is a member of the Association of
Professional Geoscientist of Ontario (APGO), is a Competent Person
(JORC, SAMREC, PEMREC) and a Qualified Person (NI 43- 101) and
accordingly, is a qualified person as required under the AIM
Rules.
**ENDS**
For further information, please contact:
GoldStone Resources Limited,
Bill Trew / Emma Priestley Tel: +44 (0)1534 487 757
Strand Hanson Limited
James Dance / James Bellman Tel: +44 (0)20 7409 3494
S. P. Angel Corporate Finance
LLP
Ewan Leggat / Charlie Bouverat Tel: +44 (0)20 3470 0501
St Brides Partners Ltd Tel: +44 (0)20 7236 1177
Susie Geliher / Max Bennett
About GoldStone Resources Limited
GoldStone Resources Limited (AIM: GRL) is an AIM quoted mining
and development company with projects in Ghana that range from
grassroots exploration to production.
The Company is focused on developing the Akrokeri-Homase project
in south-western Ghana, which hosts a JORC Code compliant 602,000oz
gold resource at an average grade of 1.77 g/t. The existing
resource is confined to a 4km zone of the Homase Trend, including
Homase North, Homase Pit and Homase South.
The project hosts two former mines, the Akrokerri Ashanti Mine
Ltd, which produced 75,000 oz gold at 24 g/t recovered grade in the
early 1900s, and the Homase Pit which AngloGold Ashanti developed
in 2002/03 producing 52,000 oz gold at 2.5 g/t recovered.
Production is currently focussed on the Homase Mine however it is
the Company's intention to build a portfolio of high-quality gold
projects in Ghana, with a particular focus on the highly
prospective Ashanti Gold Belt.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018 (as amended).
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END
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December 30, 2022 02:00 ET (07:00 GMT)
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