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Tagged with: CAH

Sep 2009 - Catalpa Resources

Catalpa Resources Limited (CAH) –Bringing Edna May into Production at ~100,000ozpa from June 2010

  • Catalpa Resources (CAH) has started construction of their refurbished ~3mtpa ex-Big Bell plant that is expected to start production from June 2010 and ramp up to ~100,000ozpa production at cash costs of ~A$640/oz. The expected production is based on an initial throughput rate of 2.8mtpa that increases after ~2 years to 3.2mtpa, processing ore at a grade of ~1.2g/t with a ~92% recovery.
  • The host rock is the Edna May Gneiss which contains broad low grade gold mineralisation reminiscent of Kidston, Mt Leyshon or Mt Rawdon, except that it is enhanced by higher grades within the gneiss itself and by arcuate, high grade, generally laminated quartz veins, often containing visible gold and ranging at average values of up to ~1oz/t (30g/t) or so.
  • The production forecast does appear to be conservative as historical grade reconciliations were up to ~20% or so higher (due to the extensive often higher grade mineralisation) and historical recoveries appear to have been mostly in the 93% to 95% region in the harder sulphide rock. Catalpa are using a gravity circuit which increased recoveries in the 1980s, but was not used in the 1910’s or 1940’s.
  • Most of the previous production periods stopped producing at about the 1090m RL or 245m Level below surface due to a combination of water inflow and an extensive pegmatite unit, despite drilling showing that the mineralisation does continue with grade below this zone. Catalpa’s open-cut shell goes down to the ~1150m RL, with underground stoping a possibility at depth (not yet modelled).
  • CAH is in the process of undergoing a merger with its major shareholder Lion Selection Ltd (LST, 47% of CAH) that is expected to be completed in Nov/Dec 2009 and results in Catalpa owning 30% of the Cracow gold mine in QLD, and no major shareholder. The other Lion assets go into a separate Lion vehicle, with CAH receiving gold (less costs and capex) from Cracow from August 2009.

Mar 2011 - Catalpa Resources

Catalpa Resources Limited (CAH) – Targeting Gold Production of 150,000ozpa to 200,000ozpa or so at Cash Costs of ~A$550/oz to ~A$580/oz by June 2014

  • Catalpa’s gold production is currently derived from its wholly owned Edna May open-cut mine at ~100,000ozpa and cash costs of ~A$750/oz in WA, and 30% of the Cracow underground mine realising ~30,000ozpa at cash costs ~A$550/oz. Cracow completed a 20% mill expansion in January 2010 and may be treating higher grade ore which could increase CAH's 30% share, closer to ~35,000ozpa.
  • The higher grade ore at Cracow could come from the expected extraction of the sill/crown pillars at Royal Standard and Crown (as they approach the end of their lives), together with the newly defined Empire, and extra long Phoenix, orebodies.
  • At Edna May, the commissioning and plant ramp up has taken longer than expected due to a number of internal and external factors that have gradually been resolved such that the June Quarter 2011 could be closer to ~100,000ozpa at cash costs of <A$700/oz. However, it is the progress that had been made on the understanding of the Edna May mineralisation and underground potential that could significantly transform Edna May and hence Catalpa.
  • Catalpa has established that the pegmatite zone appears to steeply dip north and passes across the orebody from the northern hangingwall to the southern footwall such that the proposed underground mine should be essentially pegmatite-free. The lodes also appear to be uniformly striking NE/SW and E/W, forming a hinge and apparent curved shape.
  • The proposed underground has the potential to significantly transform Edna May, even at an initial rate of ~150,000tpa @ 9g/t for ~40,000ozpa to 45,000ozpa could materially increase production to ~150,000ozpa and reduce cash costs to the ~A$550/oz region (assuming that the Tungsten by-product is also viable).