All images: Doray Minerals.
BY CAMERON DRUMMOND
GOLD producer Doray Minerals is looking to its two producing assets – Andy Well and Deflector – for organic growth opportunities.
WA gold producer Doray Minerals’ Andy Well gold project commenced production in August 2013; with the Deflector gold-copper project commencing production in May 2016.
Both projects are currently undergoing aggressive exploration and development to increase the company’s mineral resources and reserves.
Deflector
The Deflector project is located 160km east of Geraldton in the southern Murchison region of WA, and was acquired following its successful takeover of Mutiny Gold in February 2015.
After fast-tracking development of the $63m project, the mine commenced commercial production in November 2016 with an initial mine life of six years, producing about 60,000 ounces (oz) of gold per annum.
The Deflector mine’s three separate lodes hold reserves of 1.78 million tonnes (mt) of ore at 5.6 grams per tonne (g/t) for the production of 322,000oz of gold and 16,000t of copper concentrate.
“Since we completed the takeover of Mutiny Gold, we have funded, permitted and built a new 480,000 tonne per annum processing plant, a new 150-person accommodation village and all other associated mine infrastructure, and commenced open pit mining at Deflector,” former Doray managing director Allan Kelly said at the commencement of production.
As the mine moved from an open pit operation to an underground mine in early 2017, Doray recommissioned its Acacia processing plant to a two product design, producing gold in dor? and a gold copper concentrate.
It also continued an aggressive drilling campaign to upgrade the mine’s resources beyond its current five year life.
Initial results from an ongoing resource infill and extension program released in May were positive, with Doray managing director Leigh Junk stating that the company now had an increased understanding of the orebody that confirmed strong mineralisation continuing at depth.
“The Deflector orebody is open at depth and these drilling results highlight the many opportunities we have to define further extensions, and strengthens our confidence that the mine life can be extended beyond the current five years,” Mr Junk said.
As drilling continued into June, Doray announced it had identified a potential northern extension to the mine that could significantly expand mine life.
“This drilling to date has been important in confirming high grade extensions to the current ore body, and if this drill hole north of the dolerite dyke has intersected a northern extension of the orebody, then it would be a significant discovery in our short history at Deflector and a potential game changer for the operation,” Mr Junk said.
Andy Well
Located 45km north of Meekatharra, production from Andy Well commenced in mid-2013.
In addition to the main Wilber Lode, Doray discovered other parallel high-grade lodes, including Judy and Suzie, which added to Andy Well mine life.
Activity during the half year to December focused on the processing of underground ore from the Wilber and Judy Lodes.
Development of the underground mine continued to prioritise both Judy and Wilber declines to access deeper levels and add to the project’s mineral resource.
However, the Judy orebody reconciled poorly against reserves due to the width of this high grade lode being less than modelled, resulting in lower grades being available for processing from both development advance and stoping.
Confirmatory diamond drilling was expedited during the period and results incorporated into a revised geological model.
A revised mine plan was developed at the beginning of the March quarter to provide sufficient mine life to properly assess the potential of future production from Wilber Deeps and the satellite Gnaweeda open pit prospect.
Doray said a clearer picture of longer term extensions to mine life would be available in the second half of 2017 after further diamond drilling was conducted.
Looking down onto the Wilber Lode access point at the Andy Well project.
Gnaweeda
Gnaweeda is a satellite project 15km from Andy Well, flagged as the next development in Doray’s growth strategy.
In June, Doray announced an updated mineral resource estimate at the Turnberry open pit deposit, increasing its gold inventory by 21 per cent to 5.5mt grading at 1.8g/t for 322,000oz of gold.
The company said results from Turnberry South were highly encouraging, confirming both the revised geological interpretation of mineralisation at Turnberry, as well as the continuity of grade within the interpreted mineralised zones.
“The addition of these valuable open pit ounces at Gnaweeda is having a significant impact on how we are assessing the entire strategy for the Andy Well Gold project,” Mr Junk said.
“Our optimisation strategy benefits from the flexibility of being able to prioritise this higher margin open pit material so close to our plant at Andy Well.”
RC drilling had commenced, with initial results demonstrating consistent high gold grades and continuity within the Turnberry South area of the resource, the company stated.
Exploration efforts at Gnaweeda were ongoing and would continue throughout the year, with a view to providing mill feed from Turnberry to the Andy Well processing facility.
Doray said it was in the final stages of its mining lease application and initial hydrogeological surveys had been completed, as well as initial assessments for open pit mining.
Financials
During FY17 the company continued to reduce its overall net debt, with a recent payment of $8.5m reducing total debt to $55m.
Doray said a further debt reduction was anticipated at the end of the financial year, and was busy prioritising $7.5m in exploration expenditure for FY18.
“Doray will be prioritising its total budgeted exploration expenditure for the year ending 30 June 2018 by rationalising its regional exploration portfolio.
“Priority will be given to orebody extensions and near-mine discoveries on the Andy Well and Deflector tenement packages, with grassroots regional exploration minimised.
“The company views these two tenement packages as the best opportunity to grow its resource and reserve inventory and increase its production profile due to the close proximity of its two operating processing facilities.”
