Mundoro assesses Maoling project

Vancouver — Mundoro Mining (MUN-T) has begun a final feasibility study of the Zone 1 deposit at the Maoling gold project in China’s Liaoning province. The study is due in mid-2006.

Mundoro holds a 79% interest in the 20-sq.-km project through a joint venture with the provincial government of Liaoning.

Based on the results of a prefeasibility study, Mundoro envisions an open-pit mine capable of producing 364,000 oz. gold annually in the first six years at a cash cost of US$175 per oz.

Field work for the final feasibility is under way, with permitting and environmental studies set to begin shortly. If the final study leads to a production decision, Maoling could become China’s largest gold mine.

The prefeasibility, by AMEC Americas, examined only an indicated resource of 120 million tonnes grading 1 gram gold per tonne, based on a cutoff grade of 0.5 gram gold per tonne. This resource represents only the northern half of Zone 1, and was based on a gold price of US$400 per oz.

More drilling is required to convert resources into reserves for the feasibility study, though the project is already known to host a probable reserve of 88.8 million tonnes grading 0.99 gram gold.

The company notes that additional drilling could significantly expand the scope of the project by upgrading some of the inferred resource, which stands at 183 million tonnes grading 0.9 gram gold.

Zone 1 is one of two deposits at Maoling. Both deposits outcrop at surface and contain disseminated free-milling mineralization in a sequence of altered phyllitic metapelite to meta-siltstone with 3-5% disseminated sulphide mineralization.

Preproduction capital costs for the proposed mine are estimated at US$244 million, with a further US$63 million required in the expansion phase.

Based on the prefeasibility study, grades in the first two years would average 1.33 grams, based on a cutoff grade of 1 gram, and decline thereafter. The cutoff grade would be lowered in years 3-4 to 0.75 gram and then, in years 5-6, to 0.5 gram. Low-grade material between 0.5 and 1 gram would be stockpiled for treatment in the final two years of the mine.

The life-of-mine stripping ratio is estimated at 1.36:1 (waste to ore). The pre-strip of 11 million tonnes will be used to build roadways and a tailings dam.

Metallurgical tests show recoveries of at least 93% at a coarse grind. The process plant would include primary crushing followed by semi-autogenous grinding and secondary grinding in a ball mill. Milled ore would be put through a conventional carbon-in-pulp gold plant. Initial throughout would be 20,000 tonnes per day, which would be expanded to 35,000 tonnes after the first two years of production.