Great Central Mines expands reserves at gold mines in Western Australia

For Melbourne-based Great Central Mines (GTCMY-Q), the recent quarter was marked by significant exploration success on the Jundee mine — one of two gold producers operated by the company in the Yandal greenstone belt of Western Australia.

In hole 5280, the company hit a 22-metre interval grading 104.8 grams gold per tonne starting at a depth of 98 metres, while hole 5476 hit 32 metres grading 65.2 grams at a depth of 77 metres.

Additional drilling will attempt to expand the orebody, which measures 2 by 5 km.

Reserves at Jundee now stand at 13.1 million tonnes grading 2.1 grams (or 880,000 oz.) gold. Total resources (including reserves) are estimated at 26.2 million tonnes grading 2.2 grams (or 1.8 million oz.).

The Jundee cranked out 66,241 oz. gold during the quarter at a cash cost of US$187 per oz., while nearby, at the Bronzewing mine, 83,290 oz. were produced at about US$177 per oz.

Gold reserves of 3 million oz. are estimated for Bronzewing, where an underground core rig intersected 86 metres of 3.5 grams beneath the Discovery pit, and 40 metres of 14.5 grams at the top of Shoot 39.

Meanwhile, at the Sundowner target, 7 km northeast of Bronzewing, reverse-circulation (RC) drilling intersected 17 metres of 22.2 grams beneath thick, alluvial cover. RC and core drilling is also in progress at the Mt.

Joel deposit, north of Bronzewing, and Mandilla Well, about 20 km to the south.

A production decision is expected soon at Mt. Joel.

The company saw output from both mines jump 22% over the period, to a record level of 149,531 oz.

Production during Great Central’s fiscal year, which ended June 30, totalled 362,362 oz. at a cash cost of US$191 per oz. The company expects the figure to top 550,000 oz. at US$188 per oz. in the coming year.

Compared with the previous fiscal year, total gold reserves were up 40% to 2.5 million oz. Reserves plus resources now stand at 4.8 million oz.

Reflecting the company’s strong fiscal year, Chairman Joseph Gutnick has decided to pay Australian-based Plutonic Resources A$15 million in return for cancellation of an option in his company.

Through Edensor Nominees, Gutnick will pay A$5 million to acquire the cancellation rights to the 20% option and a further A$10 million to exercise the right.

Plutonic acquired the option for Great Central in October 1995 in exchange for a A$50 million loan, which Great Central must still repay.

In all, the cancellation price of the option could exceed A$65 million.

Recently, Gutnick sold 10.7 million shares of Great Central to raise A$35 million to fund the option buy-back agreement.