Pic: Tetra images / Chris Clor / Getty Images
Manuka set to restart gold production at Mt Boppy in June quarter
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Manuka is gearing up to restart gold production at its Mt Boppy mine in NSW’s Cobar Basin after a preliminary evaluation showed the economic viability of treating a screened product at the Wonawinta plant.
Manuka Resources’ (ASX:MKR) production plan underpins a ~3 year gold production scenario targeting up to 25,000oz a year starting in early April.
Shares rallied as much as 28%, hitting an intra-day peak of 6.9c following the news.
Manuka Resources (ASX:MKR) share price chart
The ~1Mtpa+ Wonawinta mill can produce both gold and silver and is production ready.
Manuka says bulk sampling for grade evaluation of the Mt Boppy waste rock dumps has been initiated, supporting positive metallurgical tests that have confirmed the amenability to cyanidation of the screened product.
The current strong gold price and superior economics of the Mt Boppy gold mine has prompted Manuka to favour gold production over silver production for the time being.
Mt Boppy has previously been a very nice money-maker for Manuka, beating expectations on several levels prior to the completion of Manuka’s first phase of mining in the final quarter of 2021.
During the previous mining campaign, the operation outperformed forecasts by over 70% with respect to ore milled, recovered ounces and sales revenue.
Manuka ended up producing nearly 41,000oz of gold, up from the initial expectation of 22,000-24,000 ounces, which delivered around $100m in revenue instead of the forecast $55-60m.
Setting up for the long haul
The company has also mapped out further measures to extend the life of mine and increase annual production.
Recent positive results from a strategic exploration review demonstrate the potential to materially grow Manuka’s higher confidence indicated gold and silver resources.
Manuka is planning to undertake a series of exploration programs to underpin the development of a number of small open pit deposits.
Mt Boppy currently hosts a resource of 282,000 tonnes at 4.95g/t for 45,000 contained ounces of gold but has significant expansion potential at depth to increase both resources and grade and drive efficiencies.
The strategic exploration review highlighted prospective additional high-value resources of 249,000-527,000oz at 2.5-3.8g/t of gold, with Mt Boppy depth extensions, along with the McKinnons & Pipeline Ridge prospects to be the focus.
Manuka’s goal at Mt Boppy is to increase the current resource by an additional 84,000 -136,000oz of gold with the 2023 exploration program.
Re-entry into the Mt Boppy open pit is slated for later this year subject to the finalisation of economic mine planning to produce up to 45,000oz, included in the current resource, beneath the base of the pit.
Manuka is also aiming to recover 3000-4000oz in broken ore at the base of the pit.
Mt Boppy Deeps drilling is set to start in the second half of 2023 to assess the potential for an underground mine.
This article was developed in collaboration with Manuka Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
