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Red October Gold Mine Overview
The Red October gold mine and project area covers 44 km2 and consists of six granted Mining Leases (ML’s), an extensive well-maintained underground mine, a 68-person camp, offices, workshops and exploration base, wet and dry messes, underground mine equipment and a JORC 2012 compliant Mineral Resource of ~99,000 oz of gold, which importantly includes 85,000 oz @ 13.6g/t Au (Table 1).
The Red October mine is a structurally controlled gold deposit located in the Laverton Greenstone Belt (LGB) which hosts a number of world class and emerging gold mines with resources >25M oz of gold which include Sunrise Dam, Mt Morgans, Butcher Well, Granny Smith and Wallaby.
The Red October gold mine has produced a total of 1.7Mt at 6.1g/t Au for 342,000 oz gold. The open pit operation contributed 113,000 oz gold at 6.5g/t Au between 1999 and 2002 and the underground operation has produced 1.2Mt at 5.9g/t Au for 229,000 oz gold to a depth of 550m vertical metres between 2012 and 2017.
Table 1: 30 June 2017 Red October Resource Estimate (ref SAR report to ASX 02/08/2017) *
*The Company confirms that it is not aware of any new information or data that materially affects the information included in the above resource estimate and that all material assumptions and technical parameters underpinning the above resource estimate continue to apply and have not materially changed.
Matsa’s other two key operations (Red Dog and Fortitude) are located nearby, with all three operations forming part of Matsa’s strategic outlook for future production. This is underpinned by surrounding exploration tenements in the Lake Carey district, with a view to creating a quality pipeline of projects.
Figure 1: Lake Carey-Laverton district: a great address for gold
Since purchasing the mine in March 2018, the Matsa team have undertaken a high-level economic analysis of the Red October underground gold mine (Stage 1). Stage 1 has been completed, with quality resource definition targets and potential mining targets identified throughout the mine.
Stage 1 was an initial high level mine design and financial model, which identified 15 areas within the existing 85,000 oz @ 13.6 g/t Au underground resource with potential for near-term mining (Figure 2). Twelve additional targets outside of the existing resource were also identified as having near mine potential and have been flagged for further exploration and evaluation.
Figure 2: Stage 1 potential mining areas identified at Red October
Stage 2 mining studies are focused on commencing development of Stage 1 targets. The Stage 2 study which is made up of the following components was completed at the end of November, with approvals pending and detailed mine planning scenarios being investigated.
Matsa anticipates that the mine studies will conclude in a mine plan to commence mining in 2019 on a small scale with plans to then ramp up mining operations as further exploration drilling confirms anticipated minable resources.
The underground workings have been well maintained and remain in a state of readiness for future activities.
Geology Studies – Geomechanical Strain Modelling
An analysis of the structural strain architecture at Red October commenced in September 2018. This analysis builds a 3-dimensional interpretative model of the near mine environment constrained by high quality ground magnetics, underground geological mapping and drill hole information. The objective is to identify “dilational” target areas of low to moderate strain, where gold-bearing fluids may have accumulated during the complex structural history of the Red October area.
Geomechanical analysis has the potential to be a cost-effective tool to focus exploration drilling, discover new gold mineralisation and expand the gold resource base at Red October. The model is nearing completion, with delivery expected end of December 2018.
Underground Exploration – A key strategic pillar for Matsa’s future
The geomechanical modelling in conjunction with geology knowledge gained from small scale mining, structural geology, geochemistry, geophysics, historical drilling and mapping, will enable Matsa to construct a quality pipeline of underground drilling targets ranging from resource extension to brownfields drill targeting. The Red October deposit is under-explored, with some known mineralised lodes remaining poorly drilled, and the orebody extents remaining open in all directions (Figure 3).
Figure 3: View looking West; Greater than 1 Ounce drilling intercepts versus existing mine workings
The Red October underground mine workings are relatively shallow at 552m below the surface (Figure 4) at its deepest point (South Decline). Gold mines throughout the Yilgarn Craton are commonly mined to depths of 1km through ongoing extension of resources via exploration and diligent mine planning including geotechnical analysis.
Figure 4: View looking West; Mine workings, drilling intercepts and Resource wireframes
Given the relatively undeveloped nature of the ore system, Matsa holds a positive, long-term view to the exploration potential and future mining at Red October.