THE Paulsens Gold project near Paraburdoo in WA will now have a mine life of more than five years, thanks to a major resource and reserve upgrade announced by operator Northern Star Resources.
The JORC reserves at Paulsens increased by 81 per cent, to 204,000 ounces at 5.3 grams per tonne, with a grade increase of 23 per cent.
Northern Star’s total JORC resource increased by 38 per cent to 555,000oz at 5.7g/t, and the grade increased by 14 per cent.
This revised resource will give Paulsens a minimum five-year mine life, based on a strong historical conversion of resources into mineral inventory.
The result included the company’s 13,000oz at 3.2gpt maiden open pit ore reserve from the nearby Belvedere project, but did not include a series of outstanding 2013 drill results, which have been as high as 1135g/t at the Voyager 1 lode.
According to Northern Star, “these results, along with those from ongoing drilling, will be included in a further upgrade expected later this year”.
Paulsens is expected to produce between 100,000oz and 115,000oz in the 2013 calendar year, with total costs of up to $950/oz and anticipated surplus cash at $85 million.
Northern Star recently announced a 66 per cent increase in resources to 1.7 million ounces at its Ashburton project, around 200km southeast of Paulsens. Coupled with the Ashburton resource, Northern Star’s total resource inventory stands at 2.2moz.
A maiden sulfide reserve for Ashburton is scheduled for the second half of 2013, which will underpin the company’s plan for a stand-alone 100,000oz per annum operation there.
Northern Star managing director Bill Beament said the updated resource meant there was a promising future for the Paulsens Gold project.
“Paulsens is generating substantial surplus cash with total costs of $850 to $950/oz and it now has a mine life of five years with every prospect of further increases in the future,” he said.
“Our plans to establish a second 100,000ozpa project at Ashburton areevolving rapidly and we have significant exploration potential on the 200km stretch which divides the two projects.”
“This demonstrates we have dividend yield, strong cash flow, ample mine life, low costs, production growth and significant exploration upside.”