Brisbane, Mar 4, 2008 AEST (ABN Newswire) - North Queensland Metals Limited (ASX: NQM) is pleased to announce the production of 5,314 oz of gold at the Pajingo mine, north Queensland, in February. NQM took management control of Pajingo on 30 December 2007 following the acquisition of the mine by NQM and 40% joint venture partner Heemskirk Consolidated Limited.
Gold pours are expected to continue on a fortnightly basis. Production in February met the initial target rate of 62,000 oz per year however the mine still has some way to go in utilizing full capacity. On this basis, NQM Chief Executive Officer John McKinstry expects the rate to increase to 70,000 oz per year from July 2008 on the back of higher grades.
Mr McKinstry, who has been on site managing the start-up, said: "It is very pleasing to have reached this level of gold production so shortly after commencement, especially with the rising gold price which we expect to continue at a high level.
"The result was achieved despite almost a week's production being lost when road access to the mine was cut by flooding due to extremely heavy rain. Action will be taken to ensure access is less affected by extreme wet weather in the future.
"The mining to date has illustrated the effectiveness of the change in mining that NQM has applied to Pajingo. Under the previous ownership, a bulk mining approach had been taken to extracting the narrow quartz veins. Hand held mining is now showing the potential not only for reducing dilution, but also for adding new production areas that previously could not be included in mine plans.
"We are now at the stage of taking these new ideas and redesigning the mine around them. At a time when engineers and geologists are in great demand, the redesign of Pajingo presents an exciting opportunity for young mining professionals who want to work on a distinctive and satisfying project.
"The first JORC compliant Reserve and Resource statement for Pajingo will be released later this month incorporating some of the new mining plans. The statement will no doubt surprise those who might have been under the impression that Pajingo was almost exhausted. The previous owner being a US company did not report Resource but had done much work on what was classified as Non Reserve Mineralisation.
"We are confident that head grades will increase once the new plans take effect. At this stage we are still working through stopes designed and developed under the previous ownership, but by mid 2008 the benefits from our more appropriate mining plan will be flowing. "That should take production from the rate of 62,000oz gold per year initially planned and currently being achieved, to more than 70,000oz per year commencing in July 2008," Mr McKinstry said.
Contact
John D McKinstry CEO
Tel: 1300 308 832
Fax: 07 3666 0510
Email info@nqm.com.au
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