Black Swan ore being replaced

Gold production at Black Swan Gold Mines’ (VSE) Gabanintha project in Western Australia is presently averaging 40,000 oz per year, Arthur T. Fisher, president, said at the company’s annual meeting. On top of that, reserves depleted by mining are being replaced and he sees no reason why this trend shouldn’t continue.

The company has a 25% interest in the Gabanintha mine with Dominion Mining and Southern Ventures, two Australian companies, holding the balance. Dominion is operator for the mine.

Design capacity was reached in March and a month later the recovery plant was expanded to 50,000 oz per year at a capital cost of $300,000(A). In 1989, gold output is expected to rise to the higher rate and Black Swan’s share of production will be 12,500 oz.

Production costs are currently estimated at $225(US) per oz and during the first four years of production Black Swan estimates its cash flow at $3 million per annum.

Derek Fisher, vice president exploration, said there is considerable potential left at Gabanintha. He noted there was ore available that simply hadn’t been drilled off. Most of their exploration success to date has been to the south where the rock is harder and requires conventional blasting techniques.

At present, ore is being blended from three pits which is giving an average grade of 0.1 oz gold per ton and a 95% recovery rate. He predicted the Carlinga Well project 270 miles north of Perth might well be the company’s second mine. For an expenditure of $3.5 million, Black Swan can earn a 70% interest in the project from Polaris Pacific, the project manager.

A major shear structure runs through the property and reserves are presently indicated to be 300,000 tons grading 0.1 oz gold. Because of its location, 2-3 million tons of reserves would be required to make it economically viable, the joint venture believes.

Exploration funds are being allocated to joint ventures on three major exploration projects, the purpose of which is to increase Black Swan’s annual gold output to 50,000 oz by 1990. Greater attention will be given this year to a joint venture agreement with Dominion Mining in the nearby Meekatharra area; about 10 properties are involved in the deal and their objective is to find additional feed for the Gabanintha plant. Even the discovery of a small gold deposit could be economically viable because the Gabanintha mill is so close, Fisher pointed out. Exploration has already indicated the presence of s ubstantial gold mineralization 50 miles northeast of the Gabanintha mine site.