ASX RELEASE: Unity mining's Henty Gold mine

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ASX RELEASE: Unity mining's Henty Gold mine

Post by Philski » Thu Jul 10, 2014 12:17 pm

Unity provides update on Henty Gold Mine
Henty operational review completed
Mine to move to care and maintenance by late 2015
50,000oz gold to be recovered
Drilling of in-mine strategic target underway
Continued exploration of highly prospective regional tenements
HentyTenements.jpg
As a result of the Henty Gold Mine’s (Henty) operational performance during the
first quarter of 2014, Unity Mining Limited (ASX:UML) (Unity or the Company) has
undertaken a detailed review of Henty’s mineral inventory and life of mine
production schedule. The purpose of the review was to ensure that there is a
high degree of confidence in the Henty Ore Reserves and mining schedule and
that the mine is capable of generating positive cash flows at current gold prices.

From the outcome of that review, the Company has determined that the best
economic outcome for Unity shareholders is to focus on maximising cash
generation through the recovery of the remaining higher confidence and higher
margin reserves. Accordingly, at currently scheduled mining rates, Henty is
expected to have substantially mined these reserves and will transition onto a
care and maintenance basis in late 2015.

The Henty mine remains a strategic and highly prospective mineral asset with a
significant existing mineral resource endowment. Unity also retains an extensive
ground holding along-strike of the mine which historically has had limited drill
testing. While the Company’s current plan includes the eventual suspension of
gold production from the Henty Mine, Unity’s goal is to restart or continue
operations should additional, sustainable reserves be delineated.

Since acquiring the operation in 2009, and particularly over the past 12 months,
Unity has invested heavily in exploration to extend Henty’s mine life. In the past,
exploration drilling has generally been successful in replacing the mineral
inventory depleted by mining. However, while Mineral Resources remain broadly
unchanged at 282,000 oz, recent drilling has not been successful in converting
resources to reserves in line with expectations based on historical results.

The latest mining schedule also takes into account recent mine performance in
the remaining reserve areas, in particular the highly variable nature and
distribution of ore grades, most particularly in the Read Zone. The revised mine
plan anticipates the remaining reserves will be largely exhausted by the end of
the 2015 financial year. A comprehensive Resources & Reserves announcement
will follow this release.

As a result of the revised mining schedule, the Company is also performing a
review of Henty’s carrying value and expects to record a non-cash impairment
charge in the fiscal year ended 30 June 2014. While the Company has not yet
determined the amount of the charge, as at 31 December 2013 the value of the
Henty assets that are currently under impairment review had an aggregate net
book value of approximately $22 million. The Company expects to report a
significant loss for the financial year 2013/14.

Henty commenced operation in 1996, with an initial mine plan of around four
years. When Unity acquired Henty it had been in operation for 13 years, had
produced around 1.2M oz of gold and was on a path to closure within six months.

Under Unity’s ownership, Henty has produced a further 250,000 oz gold and is expected to yield up to an
additional 50,000 oz prior to the planned suspension of production in the second half of 2015.

Unity’s Managing Director & CEO Andrew McIlwain said “Since the acquisition of Henty in 2009, Unity has
enjoyed strong support from our workforce, local and regional communities as well as Minerals Resources
Tasmania and during this period Henty has been a significant contributor to the Tasmanian economy. In the
last 12 months alone, Unity has expended around $60 million on employee wages, contractors and suppliers,
the vast majority of which was spent in the local economy.

“Unfortunately, our significant commitment to exploration drilling within the Henty mine during the last twelve
months has not been successful in adding significant additional gold ounces to the mine life, and as such, the
mine will transition to care and maintenance in the second half of 2015. Coupled with the substantial
improvements in the cost profile at Henty that have been achieved over the last six months, we are confident
that the current mine plan will generate positive cash-flow over the remaining mine life.

“We will continue to aggressively pursue mine financial performance and evaluate other opportunities in-mine,
particularly the exciting Darwin South Offset target that is currently being drill tested. Results from this
strategic hole are anticipated to be available in August.

“Our current plans and budget also include continuing to explore our highly prospective regional tenement
package adjacent to and along strike from Henty. Any significant discoveries within the region may lead to a
re-evaluation of the Henty mine’s future” said Mr McIlwain.


Under Unity’s ownership, Henty has produced a further 250,000 oz gold and is expected to yield up to an
additional 50,000 oz prior to the planned suspension of production in the second half of 2015.

Unity’s Managing Director & CEO Andrew McIlwain said “Since the acquisition of Henty in 2009, Unity has
enjoyed strong support from our workforce, local and regional communities as well as Minerals Resources
Tasmania and during this period Henty has been a significant contributor to the Tasmanian economy. In the
last 12 months alone, Unity has expended around $60 million on employee wages, contractors and suppliers,
the vast majority of which was spent in the local economy.

“Unfortunately, our significant commitment to exploration drilling within the Henty mine during the last twelve
months has not been successful in adding significant additional gold ounces to the mine life, and as such, the
mine will transition to care and maintenance in the second half of 2015. Coupled with the substantial
improvements in the cost profile at Henty that have been achieved over the last six months, we are confident
that the current mine plan will generate positive cash-flow over the remaining mine life.

“We will continue to aggressively pursue mine financial performance and evaluate other opportunities in-mine,
particularly the exciting Darwin South Offset target that is currently being drill tested. Results from this
strategic hole are anticipated to be available in August.

“Our current plans and budget also include continuing to explore our highly prospective regional tenement
package adjacent to and along strike from Henty. Any significant discoveries within the region may lead to a
re-evaluation of the Henty mine’s future” said Mr McIlwain.


Competent Persons’ Statement
Any information in this public report that relates to
Ore Reserves, Mineral Resources or Exploration
Results is based on, and accurately reflects,
information compiled by Rob Mclean in relation to
Ore Reserves at Henty and Dargues, Raul Hollinger
in relation to Mineral Resources at Henty, John
Collier in relation to Mineral Resources at Dargues
and Angela Lorrigan in relation to Exploration
Results. McLean, Hollinger and Lorrigan are
Members of the Australasian Institute of Mining
and Metallurgy, and Lorrigan, Collier and Hollinger
are Members of the Australian Institute of
Geoscientists. McLean, Collier, Hollinger and
Lorrigan are or were at the time of preparing the
reports full time employees of the Company and
have more than five years’ experience in the style
of mineralisation and type of deposit under
consideration and to the activity which they
undertaking to qualify as Competent Persons as
defined in the 2012 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. McLean, Hollinger,
Collier and Lorrigan have given prior written
consent, where required, to the inclusion in this
report of the matters based on their respective
information, where applicable, in the form and
context in which it appears.

ASX RELEASE UNITY MINING LIMITED
For further information please contact:

Andrew McIlwain
Managing Director
Unity Mining Limited
Telephone: (+613) 8622 2300
For Media Enquires:

Ian Howarth
Collins Street Media
Telephone: (+61) 407 822 319

While Henty may be going into caretaker mode. The company have started drilling with Greatlands farm in project at Firetower West prospect, between Mount Roland and the Gog Range with positive results. The strike length extension is a good 4 km long combined with the mole creek side on firetower prospect and other targets in the immediate area are easily accessed and show decent historical returns. Henty mine still grades 4 grams per ton Au and im sure they will pick up the run of gold again and be back in productive territory soon. its a top down hit if that helps. The board took a pay reduction and reduced numbers on it after the recent resignation of David Ransom a non share holding board member.

The mine is world class and leads by example golbally in ecological sustainability and would be a shame for Tasmania to lose it
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