WA-based gold exploration and development company Excelsior Gold has certainly lived up to its name – ‘excelsior’ being Latin for ‘ever upward’ – as it moves rapidly to re-establish operations at its exciting Kalgoorlie North gold project in the WA goldfields, about 45km north of Kalgoorlie.
The project covers granted mining and prospecting leases across 25km of the Bardoc Tectonic Zone greenstone belt. Historic production from the Bardoc mining centre, in the central part of Excelsior Gold’s tenements, occurred at the underground Zoroastrian mine between the late 1890s and early 1900s, and at the Excelsior and Zoroastrian open pits between 1987 and 1991.
Excelsior Gold managing director David Hamlyn said that when the company acquired the project in 2009, it wasn’t just the healthy 276,000oz resource that made it attractive. Kalgoorlie North was between some very large deposits, including the 2 million ounce Paddington gold mine to the south, the Aphrodite mine to the immediate north and the Mt Pleasant gold project to the west.
“So all around the tenements you have these very large gold deposits and it was said to us that ‘this is an area that has the potential for large gold deposits’,” Mr Hamlyn said.
“At the time we didn’t know the history of it that well, but as we have looked into it we realised that it hadn’t been that effectively explored, so there was the opportunity to get in there and find some substantial deposits.
“It is only about 98 square kilometres, but it is right in the guts of where you want the tenements to be.”
Since acquiring the project, Excelsior Gold has reviewed an extensive 30,000-hole historic drilling database, using it to target the company’s drill campaigns to expand and upgrade the gold resource. With more than 80 gold occurrences across the project area, the company found the database vitally important.
“What it meant was that initially – when we took the project on – our progress was slow because we spent about 18 months assessing that database and prioritising our targets,” Mr Hamlyn said.
Since then, he said exploration had demarcated extensive mineralisation including 16 defined resource areas, 22 advanced prospects, 51 zones with significant drill intercepts, and numerous untested targets requiring exploration drilling. Resources are concentrated in the central Zoroastrian and Excelsior deposits, on the site of the historic Bardoc mining centre. The two deposits host 742,000oz, or 78 per cent of total gold resources. The current indicated (37 per cent) and inferred (63 per cent) mineral resources for the project are 17.9 million tonnes grading 1.66 grams per tonne of gold, containing 952,000oz.
Excelsior Gold has accelerated drilling plans for the higher-grade resource areas within the Kalgoorlie North project area to better facilitate mining and processing evaluations as part of its pre-feasibility study for the project, due for completion in mid-2013.Originally, the PFS was focussed on Excelsior and a number of satellite deposits within a 4km radius of Excelsior. However, Zoroastrian has been developed to such a point that it has become the most significant find for the company.
“Although it is only 286,000 ounces at the moment, we believe it has enormous potential to grow and the really important thing about it is [that] while the grade at Excelsior is about 1.3 grams per tonne and works well as a larger open pit, at the Zoroastrian the grade is about 2.79.
So it is more than double the grade of Excelsior,” Mr Hamlyn said.
Zoroastrian, which Excelsior Gold reported in September as having an updated resource of 3.19mt grading 2.79g/t of gold for 286,300oz, was historically mined using a combination of underground and open pit methods. In 2011, the company initiated exploration programs to evaluate the distribution of high-grade veins in the dolerite. As a result, a three-dimensional geological model of the mineralisation in the southern portion of the open pit area was developed; a model which has been proven by subsequent exploration drilling. Mr Hamlyn said that very little drilling by previous tenement holders had been undertaken outside of the existing open pit.
“We have now identified a mineralised zone in excess of 2km long there and the existing open pit sits in the very northeastern corner of that area, and the pit they have mined doesn’t take out the best part of the mineralisation,” he said.
“They really missed it because they didn’t do enough drilling around the pit area.
“So it’s actually quite incredible to us that we have been able to discover these zones to the west and extending south from the pit.”
Exploration to date has identified more than 15 veins with high-grade intercepts, covering 900m of strike and 220m deep.
Only 1150m of the deposit’s known 2km strike had been drilled prior to the start of the most recent exploration program in October 2012.This drilling campaign will
include exploration of the Bank of England lode to the east of the Zoroastrian pit, which has been well defined by historical mining activity but is underexplored.
The Bank of England is defined by a procession of historical workings that have never been tested using modern drilling techniques. Mr Hamlyn said the lode could have a substantial impact on Zoroastrian, which has a 1moz potential.
“The Bank of England line of workings in itself has the potential to increase the resources quite significantly,” he said.
“We believe that even on the zones we are working on right now there is potential to increase the resource to half a million ounces just by extending zones along strike and at depth.”
The October drill program, involving 17,600m of reverse cycle drilling and 1000m of diamond drilling at a total estimated cost of $1.98 million, is expected to continue until late January 2013. Mr Hamlyn said the company would like to see the Zoroastrian in excess of 500,000oz on completion.
On October 24, Excelsior Gold reported that assay results from the first eight reverse cycle holes at Zoroastrian had returned strong gold mineralisation.
The drilling, part of the first phase of a three-stage program, returned results including 26m grading 2.89g/t gold from 231m, including 12m grading 5.2g/t gold from 243m.The new drilling program was designed to extend the known stockwork-style gold mineralisation along strike and to depths of 350m across about 900m of the interpreted 2km strike length.
The low-grade, high-tonnage Excelsior deposit, 300m east of Zoroastrian and part of a major structure that extends more than 6km, has a resource of 11.1mt grading 1.28g/t for 456,000oz of gold. While it offers potential for a large-tonnage open-pit operation, the company’s shift in focus toward expansion of the nearby Zoroastrian deposit means the Excelsior deposit will probably become a bulk underground mine used to augment Zoroastrian mill feed.
Expansion of the current Excelsior open pit is also constrained to the north by the Goldfields Highway and a parallel rail line. To allow development of the mine to the north of the existing pit, the road and rail would have to be diverted about 2.9km at an estimated cost of $20 million. However, this would not be required by an underground development and Mr Hamlyn said that higher-grade zones within the Excelsior deposit were potentially amenable to bulk underground mining through sub-level open stoping.
“The biggest problem with the relocation of the road and rail infrastructure at Excelsior is not the cost, or the fact that it can’t be done: it’s the time that it takes. It would be a two-year project – that’s what the railway people are saying to us,” he said.
“So we’ve said ‘thank goodness we have found the Zoroastrian deposit, because it has taken the pressure off Excelsior’.
“It also means that it has attracted us to look at underground options because we could get into it as an underground operation a lot quicker.
“We are looking at bulk underground mining [with] very large stopes. Because the mineralisation is so wide we are looking at stopes in excess of 30 metres wide. It is a big underground operation. We are just assessing all that at the moment.”
Moving toward production
Historic gold production at the Bardoc Mining Centre means that Excelsior Gold already has access the main infrastructure necessary for a return to production.
“Because of the location, we already have a bitumen road going past; in fact, it’s too close in some areas,” Mr Hamlyn said.
“We also have powerlines running upto the site, we have a bore field, we have waste dump areas, and we have tailing areas already established.”
Growth of the Zoroastrian resource has moved the spotlight away from toll treatment and the sale of existing ore resources to development of a 1mtpa on-site processing
facility. Meanwhile, geotechnical studies have been initiated by the company at both Zoroastrian and Excelsior to facilitate underground mine evaluation. Mr Hamlyn
said development of Kalgoorlie North, with the reinstallation of a mill, would require a substantial funding of more than $70 million.
“We are looking to re-establish a mill on the old Bardoc mill site,” Mr Hamlyn said. “At a million tonnes [per annum plant], with the grade that we believe the Zoroastrian deposit can produce, it would give us a gold production profile of between 80[,000] to 100,000 ounces per year.
“Because there is a cluster of deposits there, you can put a mill on the old site and are literally 300 metres from the Excelsior deposit.
“The crest of the Zoroastrian pit is about 100 metres from the mill site, and you have the series of satellite deposits which are all within four kilometres of that mill,” Mr
Hamlyn said.
“That means very short trucking distance for ore. For example, at Zoroastrian you would run the dump trucks straight out of the pit onto the ROM pad.”In the short term, Mr Hamlyn said toll treatment and ore sales agreements remained an option for Excelsor.
Positioned centrally in the Eastern Goldfields, the company has a number of mill and processing options. The Excelsior mine is 20km from Norton Goldfields’ 3.3mtpa Paddington Mill and 45km from KCGM’s 13.5mtpa Fimiston Mill.
Mr Hamlyn said that while nothing had been set in concrete yet, the company was looking to use some of its smaller pits – such as Jackorite and Big Blow South – as cash flow prospects to fund larger developments and further exploration.
“The pits we are thinking about are the small high-grade pits, like the ones at Jackorite and Big Blow South,” he said.
“There’s actually about five of them that we are looking at. We don’t necessarily see them as having potential to expand to massive resources in their own right like Zoroastrian, but they are certainly able to be mined very quickly.”
Mr Hamlyn said this time next year, Excelsior Gold hoped to be in the processing plant construction phase. “We believe that the Zoroastrian deposit will come up with the goods and the resource to support that decision on the plant,” he said.
“We hope to have some satellite pit mining in progress to generate some cash flow to help supplement both the development of the mill and the Zoroastrian deposit.”