Leonora

The 249 sq km Leonora Gold Project is located 30 km northeast of the mining town of Leonora, and approximately 250 km NNE of Kalgoorlie, Western Australia. Favourable infrastructure includes a network of high quality roads, an airstrip with regular services to Perth and proximity to an established mining supply network.

A positive Pre-Feasibility Study (PFS) was released in March 2009. Independent estimates of the mineral resources at Leonora total 12.2 Mt at 1.9 g/t for 742,000 oz of contained gold. Based on work completed, the current PFS mining inventory totals 6 Mt at 1.8 g/t gold for 358,000 oz assuming a gold price of A$1,250.

The PFS envisages open pit mining at Mertondale, Cardinia, Tonto-Eclipse and Raeside to deliver 1 Mtpa ore to a centrally located treatment facility at Merton's Reward. All open pits will be mined via conventional benching using a hydraulic excavator and 100 t dump trucks. A 180 t excavator is planned for mining in the Mertondale, Cardinia and Raeside areas. A 100 t excavator will be used to cover service intervals and miscellaneous pit works.

Mining costs are based on independent mining contractor estimates that are in line with contract mining benchmark figures. Average mining costs equate to A$18.00 per tonne of ore treated.

The standalone 1 Mtpa CIL option adopted for the PFS base case model assumes a centrally located facility at Merton's Reward, adjacent to the well formed gravel road 30 km from Leonora. The proposed plant incorporates a conventional two stage crushing circuit that feeds a ball mill with an in-circuit MMD sizer which will provide for the long term flexibility to process a full range of high clay and harder ores.

The equipment will include a Falcon gravity concentrator and Gekko intensive leach reactor to maximize gold extraction prior to the CIL process. Consideration will also be given to a comminution circuit utilising an MMD mineral sizer feeding a scrubber or small ball mill to facilitate the processing of high clay content ores which will present difficulties for the conventional crushing plant proposed for the competent ore types.

The proposed Merton's Reward plant site is located 15 km north of the Cardinia gold system, and 6 km south of the Tonto-Eclipse gold system. Ore mined from the Cardinia and Tonto gold systems will be trucked to the Merton's Reward treatment facility.

The PFS assumes a 90% metallurgical recovery, which is conservative given the metallurgical testwork in the oxide zones at Mertondale, Cardinia and Raeside indicates high (plus 95%) metallurgical recoveries as well as a significant gravity gold fraction (up to 30%).

The project will require an installed power capacity to 5MW with the plant requirement expected to be 3 MW.

Water would be sourced from known underground aquifers and from the current storage contained within the existing open pits, until such time as on site (in-pit) tails dams are created and harvesting can occur to supplement bore water.

The PFS anticipates accommodation of the work force either by the establishment of a separate accommodation village on the minesite, or by the use of existing facilities in the town of Leonora.