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Sept 2011 - Focus Minerals Ltd

Focus Minerals Ltd (FML) – Building its Current operations (Coolgardie & the Mount) up to 100,000ozpa to 150,000ozpa for >5years

  • Focus Minerals (FML) appears to be building up its current 1.3mtpa production based on the Mount (at ~25ktpm), and a mixture of open-cuts (~35ktpm) and underground sources (~50ktpm) in the Tindals Mining Centre resulting in ~100,000ozpa to ~150,000ozpa (based on our/ERA modelling by 2017). Higher treatment rates than 1.3mtpa can be achieved due to the increasing number of >2g/t ore resources (with >10mt in open-cuts, plus satellites).
  • Depending on what percentage holding it can reach in its takeover of Crescent (1 FML -for- 1.18 CRE shares) FML could currently attribute ~80% of CRE's ~100,000ozpa production, resulting in FML's production possibly exceeding 200,000ozpa. We have not included the Crescent assets or acquisition in this report.
  • FML has entered into a new phase through the open-cut development of the old historic workings. Having begun with Empress and Dreadnought, FML has also started mining from Big Blow, building up to ~10ktpm per open-cut, with encouraging grades that may average ~2g/t to 3g/t. After Big Blow the possible sequence may be Undaunted, Alicia, Happy Jack and perhaps CNX, with production possibly increasing to ~50ktpm.
  • Although production could increase from 25ktpm at the Mount, initially focusing on the relatively uniform German Lodes and then building up to include the best lode out of the packages of Main and Fuchs, the upside potential is also what average grade is realised.
  • And then there's Treasure Island, on which significant progress has been made in the past year, clearly showing the St Ives mining sequence passing over the island. There are many quartz veins containing mineralisation up to visible gold, and 6g/t to 7g/t in the "surface quartz wash". Some thicker widths have been intersected, with assays pending.
  • Written by: Keith Goode
  • Wednesday, 14 September 2011