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UMACO Pty Ltd PNG

Papua New Guinea: Project 207-111

Resources and potential

Production began in 1989 with a published (Lewis and Wilson, 1990) resource estimate in 1988 of 55.9Mt at 1.38g/t Au and 21.0g/t Ag using a 0.7g/t Au cut off of (2.5 million ounces of gold, 37.9 million ounces of silver). To the end of May 2004, the mine had produced a little over 3.7 million ounces of gold and 18.4 million ounces of silver.

Current plans for operation economics at UMACO are centred on .5g/t Au cut off which has the potential to vastly increase resources previously left behind and synonymously increase the future resource development potential. At 207-111 Umuna there is a further potential for value added mineral extensions indicated in assay results from regional stream sediment samples that have indicated numerous base-metal anomalies.

Geologically, mineralization at 207-111 contains credible values with 15 diamond-drill holes drill tested in a porphyry copper target that has provided an estimated resource of 70Mt at 0.1–0.16% Cu. An alluvial operation that had previously accounted for 200,000 of gold is now a new extension of activity with respect for renewed evaluation at 207 111.

A least known unusual byproduct at 207-111 is Wollastonite. Wollastonite is a rare industrial element, paint pigment and asbestos fibre substitute. The element is abundant at 207-111 Umuna. Wollastonite is a calcium silicate (CaSiO3) that forms as aggregates of needle-shaped crystals. Crystals with high aspect ratio (long needle shapes) are used for reinforcing in thermoplastics and thermoset polymers. Wollastonite with a low aspect ratio is used as a general filler, and in some ceramic bodies where its low coefficient of thermal expansion reduces shrinkage, cracking, and crazing. There is no production in Australia and all requirements are imported.

Misima Open Pit Mine

The 207-111 Umuna open pit gold/silver mine lies to north east of Tugula, 200km east of mainland Papua New Guinea (PNG). The mine entered production in 1990, and in 2003 produced 118,546oz of gold and 541,176oz of silver.

207-111 Umuna employed around 650 people. The most recent mining event ended in 2001, prior to the current boom in commodities and resources where cut off grades were at peak economic tweeking to reduce the costs of production due to low gold price. UMACO intends to revalue the cutoff with stockpile milling anticipated to continue into the current plan proposed. During its recent modern life prior to short closure, 207-111 Umuna produced over 3.7Moz of gold and 18Moz of silver.

GEOLOGY AND RESERVES

Eastern 207-111 Umuna consists of cretaceous sediments of the Sisa Association, intruded by miocene-aged porphyry sills, dykes and stocks. Epithermal gold and silver mineralisation occurs in fractures and fault zones in the schists, porphyries and greenstones.

The Lode Zone (ULZ) is fractured and infilled with epithermal quartz grading into hydrothermal breccia at depth. The mineralisation occurs in the quartz and breccia zones and disseminated throughout highly fractured host rocks including microgranite intrusions and low-grade metamorphic schists and greenschists.

207-111 Umuna mineralization is characterised by banded quartz with open vughy manganese wad typical of carbonate–base metal–gold deposits.

The small Ewatinona orebody is located 5km south west of the stage 4 pit. Mineralisation continuity and grade continued below and north west of the stage 4 pit. Potential reserves are increased by mineralisation downdip of the ULZ and in its hanging wall.

Reserve: To date current proven and probable ore reserves contained 50,000oz of gold and 467,500oz of silver.

The previous miners activity was isolated by the Islander inhabitants to exclude them from developing the interests of the rest of the island mineral resources.

The 207-111 Umuna load geologically transverses the island intermittently over the geography however the previous operators were isolated to the eastern end of the island in an area representing ~5% of the island area mass. A detailed airborne magnetic and radiometric survey was carried out over the eastern portion of the island which contains an epithermal gold deposit. This load continues westward where the island people would not allow any further development.

UMACO by contrast has been granted permission to exclusivity and extend our interest as far west as we seek as well as anywhere else over the island for new discovery of resource extensions.

OPEN-PIT MINING

Production centred on a drill-and-blast, shovel-and-truck operation. 30m-wide haul roads graded by Caterpillar 16G road graders designed at a 10% grade (or 13% in areas where access is difficult). Mining equipment comprised Tamrock Driltech D40K11 rotary drills, Hitachi 12m³ hydraulic shovels, and Caterpillar 992C and 988B front-end loaders. Haulage was by 136t-capacity Caterpillar 785 trucks. Other equipment included a Cat 773B water truck used on site.

ORE PROCESSING

Gold recovery was performed by a standard crushing, grinding and carbon-in-pulp (CIP) flowsheet. Feed to the 14,500t/d mill was blended from harder high-grade ore and softer low-grade ore obtained from the mine and stockpiles.

A jaw crusher handled run-of-mine ore before the mill circuit while two cone crushers in the oversize circuit of a Fuller Traylor SAG mill processed the harder ores. Output from the SAG mill was sized in hydrocyclones, and the overflow was pumped to the CIP leaching circuit of two lines of six agitation tanks via trash screens. The CIP tailings passed through four safety screens to minimise carbon losses prior to washing in three Enviroclear high-capacity counter-current decantation (CCD) thickeners. Total retention time in their circuit averaged 34 hours.

Loaded carbon was pressure-stripped using hot cyanide solution in desorption vessels. Gold and silver was recovered from a pregnant strip solution by zinc precipitation. The gold/silver precipitate was then acid treated, dried, mixed with fluxes and smelted in an oil-fired furnace, and poured into doré bullion bars for shipment.

By contrast with less aggressive extraction UMACO will be using state of the art new processing equipment such as the Gekko inline leach reactor and simple Gekko Python technology to passify production and processing with less footprint. Downstream access to the ore body is expected to be encountered in the western end of the island.

In Line Leach Reactor planned for 207 111 Umuna

UMACO considers a target at 207 111 Umuna extension to be of similar size and value to the original UMUNA load to the west where originally 56 M tons was estimated. The company expresses the view to a much greater access and descrete development with far less surface disturbance and extraction problems as opposed to the previous miners.

UMACO extraction facilities include deep penetration solution extraction with less environmental exposure and damage. In addition our metallurgy includes particle accelleration and less retention time in an advanced technology that reduces the time required to extract the mineral host with the metal.