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Sep 2016 - Intermin Res Ltd

Intermin Resources Limited (IRC) –Generating cashflow from Teal, while Entering a JV with EGS to develop Goongarrie & Menzies

  • Although Intermin Resources Ltd (IRC) has a number of tenements in WA, its main focus areas are near Kalgoorlie (in the Teal Prospect, and Binduli JV[with Evolution]), and near Menzies (including Goongarrie). IRC has undertaken an innovative approach to developing Teal by profit sharing with a contractor in which the contractor removes the ~35m of waste to expose the orebody and from which IRC expects to potentially make ~A$10m profit.
  • The Teal gold discoveries (of Teal and possibly Peyes further south), close to Kalgoorlie were made by Placer in the 1990s, but not exploited due to the ~35m cover (which is common to the area), and the fact that like Kanowna Belle the orebody becomes refractory in the sulphide. IRC have entered into a toll treating arrangement with Zijin's Paddington plant, while Northern Star have expressing interest in treating the refractory sulphide.
  • Acquired in February 2016, Goongarrie is located ~40km south of Menzies and was last mined by Julia Mines (JLA) in ~1989 (~35koz @ 5g/t). The current plan is to cut-back Goongarrie Lady and truck the ore for toll-treatment at Eastern Goldfields' (EGS') refurbished plant at Davyhurst. The remainder of Goongarrie consisting of a number of pits over the old Goongarrie mining centre that now become part of the IRC/EGS JV.
  • The recent strategic JV with Eastern Goldfields (EGS) involves EGS farming-in to IRC to earn up to a 65% interest in its Goongarrie and Menzies projects, and includes a BFS to possibly have EGS' second operational plant located at Menzies to treat ore from Goongarrie, Menzies and EGS's own planned mine at Mt Ida.
  • However, the main target for IRC is the historic Menzies Goldfield, which was last toll-treated through the Paddington plant by Goldfields in 1999, in which the main historical mines were exploited by open-cut. Alas tailings and backfill have been pushed into some of those pits restricting further extraction. However, with ~ 2 main lodes over the ~10km strike length, there appears to be a number of historical workings between the mined pits, that could provide material feed to a plant, such as from the Pericles area.
  • The old Menzies Goldfield was renowned for its spectacular near surface grades (and not just supergene) that were mined in the early 1900s such as ~2oz/t to 5oz/t. The open-cut historical workings averaged ~2.5g/t (although the grades appear to have been higher at possibly ~3g/t to 4g/t [based on historical reports], as it was a toll-treatment arrangement).
  • Other Key Points:

  • IRC has been able to start a new direction towards gold production and profitability, based on a higher gold price and lower costs, combined with management changes such as Jon Price joining as MD in Jan 2016, and Peter Bilbe as Non-Exec Director in June 2016.
  • Little attention appears to have been made of the EW structures at Menzies, which opens up another area of potential mineralisation.
  • The Menzies goldfield has been in existence for some time, & like many of the historical Australian goldfields has gradually been forgotten - especially its richness. Most of the workings and drilling is shallow, offering significant potential at depth.
  • Infrastructure appears to be very good for IRC's Teal and Menzies Projects, with established dirt haul roads and main roads, abundant water, and proximity to either Kalgoorlie or Menzies.
  • Written by: Keith Goode
  • Monday, 19 September 2016