MOUNT MAGNET SOUTH NL - ASX: MUM

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Description

Mount Magnet South NL was incorporated on 27th April 2001 for the purpose of acquiring and exploring mineral interests in Australia.The Company holds more than 100 strategically located tenements (100% ownership) and is focussing on green and brown fields exploration across these holdings, which cover more than 500km2 stretching in a contiguous line for 180kms south of Mount Magnet in WA's Murchison region. MMS's primary interest is gold exploration; however it has adopted a greenfields exploration strategy that aims to identify base and other minerals. All the tenements have been selected for their gold and base metal potential and the tenement areas are all close to established infrastructure (including Harmony's 2.7 Mtpa Checker treatment plant) around the townships of Mt Magnet (600 km north-east of Perth) and Paynes Find (450 km north-east of Perth).

On 28th April 2008 MMS completed the acquisition of the Kirkalocka Project assets from Equigold NL, including the Curara Well mine. The addition of this remnant JORC Compliant 140,000oz gold resource altered the course of Mount Magnet South's immediate development with the Company undergoing a dramatic shift towards resource modelling and extension of Curara Well and several excellent exploration prospects. The $5 million consideration MMS paid for the Kirkalocka assets was taken by Equigold NL as $1.5 million cash, with the balance in ordinary shares.

MMS believes with its experienced management team that has a strong technical background in gold exploration as well as prudent fiscal management and administration, it can achieve exploration success in the short term and become a significant gold producer, while also evaluating the potential of other minerals.

Kirkalocka Gold Project

Mount Magnet South NL acquired the Kirkalocka Project located 70 kms south of Mt Magnet from Equigold Limited in April 2008.

Prior to Equigold acquiring this Project in 2001 both CRAE and Sons of Gwalia explored the area and identified considerable gold mineralisation at Curara Well. The initial exploration target size was a 4.5 x 0.5km >0.1g/t Au anomaly coincident with secondary splays off a major shear zone (with the shear zone defined by magnetic data).

In 2002 Equigold calculated a measured resource for Curara Well including nearby laterites totalling 7.8Mt @ 1.9g/t Au for 473,000 ounces. The mining reserve totalled 5.1Mt @ 1.8g/t Au for 301,600 ounces. A feasibility study was immediately carried out by Equigold leading to the construction and commissioning of the Kirkalocka operation in 2002.

Mining commenced in October 2002 and ceased 3 years later. Equigold mined a total of 5.6Mt at 1.62g/t Au for 294,000 contained ounces. The pit measures 505m west to east and 470m north south and around 200m deep. In November 2005 Equigold calculated a remnant measured resource totalling 2.1Mt @ 2.05g/t Au for 140,000 ounces.

Milling of the run of mine and fine ore stockpiles ceased late August 2008 with the recovered gold from the Project exceeding 300,000oz.

Kirkalocka Gold Plant

Acquired in May 2009, the first class Kirkalocka Gold Plant comprises a 1.2mtpa CIL processing facility, 130 man camp, 1,800m airstrip and all associated infrastructure. Located at the Curara Well open pit, commissioning studies conducted in March 2010 indicate a short 10 to 12 week process to full processing capability. The Plant has been held on care and maintenance since August 2008, and is maintained with full-time permanent staff on site.

Mine For

gold, iron ore

Location of operation(s)

Western Australia

Address

Suite 2 , Ground Floor , 10 Outram Street
WEST PERTH, WA, AUSTRALIA

Phone

(08) 9213 8900

Email

Website

http://www.mountmagnet.com.au

Last Updated

22/03/2011