REG - Goldstone Resources - Operational Update

Goldstone ResourcesAnnouncement

30/12/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221230:nRSd2613La&default-theme=true

RNS Number : 2613L  Goldstone Resources Ltd  30 December 2022

30 December 2022

 

GOLDSTONE RESOURCES LIMITED

("GoldStone" or the "Company")

 

Operational Update

 

GoldStone Resources Limited (AIM: GRL) is pleased to provide an operational
update in relation to mining and production activities at the Homase Mine and
exploration activities at the former Akrokeri Underground Mine.

 

Overview

 

·    5,153 troy ounces of gold produced and sold to date from the Homase
Mine, realising an average price of US$1,794 per oz for revenues of US$9.3m.

·    Gold loan repayments from gold via the delivery of 675 troy ounces to
Asia Investments Management Services Limited ("AIMS"), have been delivered.

·    2022 production target of 7,000 ounces of gold (RNS: 30 September
2022) not yet achieved, but the shortfall ounces remain within the heap at
various stages of recovery.

·    Further improvements being made to the dry plant to improve gold
recovery from the current recovery rate of approximately 65%.

·    Pit 1 and Pit 2 increase in available mineable resource demonstrated
from geotechnical drilling which would strongly improve economic performance.

·    Further drill results from Q4 diamond drill programme at the former
high grade Akrokeri Mine expected in early Q1 2023.

 

Emma Priestley, Chief Executive Officer of Goldstone, commented:

"GoldStone continues to make progress with mining and production activities at
Homase as it lays the foundations for an expanded mining operation through the
development of proximal priority targets, which are being reviewed and include
the high-grade Akrokeri Underground Mine.

 

"We continue to move in the right direction in terms of our production,
however, notwithstanding this, there remains room for improvement in recovery
rates and we have seen significant volatility in the supply and pricing of
consumables, reagents, structural steel, heavy equipment, and fuel, all of
which are required for constructing and maintaining a modern mining operation.
 This creates challenges in estimating capital and operating costs,
particularly when estimating future costs.  We think it is well understood
that the current unreliable situation has arisen largely from a combination of
Covid-19, the war in Ukraine, and global inflation.  While we are all growing
increasingly frustrated by citing these as factors which prompt manufacturing
and delivery delays, it appears to be a reality that we must accept in the
short term at least.

 

"Whilst the Company expects these challenging factors to continue into Q1
2023, we also fully expect to continue to overcome them as well as improving
our processing and extraction to improve recovery rates.  Our outlook for the
Company remains positive and we are striving to accelerate development in
2023."

 

Further Information

 

The Company announces that the Homase Mine has produced and sold 5,153 troy
ounces of gold to date, realising an average price of US$1,794 per oz for
revenues of US$9.3m.  From this, gold loan repayments from gold via the
delivery of 675 troy ounces to Asia Investments Management Services Limited
("AIMS"), were delivered.

 

The 5,153 ounces of gold produced does not include the estimated 192 ounces of
gold, amounting to some USD350,000, that were stolen in the robbery, announced
29 June 2022, in relation to which investigations are on-going with the target
of pursuing charges on those responsible.

 

The 2022 production target of 7,000 troy ounces of gold, as announced 30
September 2022, has not yet been achieved, but the shortfall ounces remain
within the heap at various stages of recovery.  The Company has had some
persistent agglomeration delays, further to the 24 March 2022 announcement,
which continue to be causing some shortfall in recovery, this together with
inclement weather which has affected the stacking of the material and the
overall recovery of gold.  The recovery rate to date has remained at
approximately 65%. The Company continues to test and assess agglomeration
methods to resolve and improve recovery factor. Testwork is showing very high
recovery potential (in excess of 80%) and the Company is currently making
further improvements to the dry plant, particularly the screening and
application of cement into the agglomeration plant, to improve recovery rates.

 

Notwithstanding the processing challenges, experienced during 2022, external
factors have materially disrupted development and production, with supply
shortages and volatile markets for currency and consumables being affected by
inflation in Ghana which was reported to be running at 50.3% in November 2022
(Source: 2022; tradingeconomics.com/ghana/inflation-cpi).   Staff
recruitment, due to skill shortages, has also presented difficulties, as we
migrate from being a development company into managing steady production and
building on it.  These issues are being shared by the industry as a whole and
are likely to continue in the short term.

 

The mine has not yet achieved consistent positive site-level cash flow, with
an average All-in Cost ("AIC") of US$1,369 per ounce average for 2022, which
is primarily due to a lower-than-expected production rate and ongoing
inflationary pressures mentioned above, in particular in relation to fuel,
spares, consumables and reagents.  The Company is currently reviewing the
operating costs for possible cuts and increased efficiency.

 

The Company is taking proportionate and appropriate steps to improve 2023
production at Homase Mine, by increasing production and expanding the mineable
resource. This is combined with extensive training and recruitment to
establish an in-country team of seasoned committed local professionals who
will be capable of taking the mine through and beyond the development phase by
expanding and improving all areas of production.

 

The additional agglomeration and stacking circuit is being built to improve
productivity and heap stacking, using existing cash resources.   To date,
the Company has had an average stacking rate of some 15,000 tonnes pcm onto
the heap leach pads.   The Company is aiming to have doubled the rate of
production level by June 2023.

 

To date, some 202,000 tonnes @ 1.5g/t of oxide ore has been mined and stacked
on the heap leach pads.  This equates to approximately 9,742 ounces of
contained gold, on the life of mine recovery of 82% this should yield 7,988
ounces of gold.  The Company is currently reviewing the material on the heap
leach pads with testwork, in order to re-assess the economics of re-handling
it. This is in conjunction with mining the remaining oxide ores from the first
pit of the Homase Mine, some 120,000 tonnes at an average grade of 1.6 g/t,
which will require a further push-back of the pit walls to access the ore in
the hanging wall and pit bottom.

At all stages of the development of the Homase mine, ESG & Sustainability
considerations were given high priority. The Company has provided significant
employment opportunities and is generating business for local suppliers and
entrepreneurs. The Board remains mindful GoldStone is operating in a rural
area with villages surrounding the mine and is determined to make every effort
to ensure that the Company is a good neighbours and a good long-term stewards
of the local environment.

 

Mineable Resource

 

From the geotechnical drilling undertaken earlier in 2022 within the first two
pits, taking the pits 1 and 2 down to approximately of 120 metres and 80
metres respectively, initial assessment has shown that a tightening of the
slope angles is possible, allowing a reduction of the stripping ratio from
10:1 (12 November 2020) to 7.4:1 in pit 1 and around 6:1 in pit 2. This
strongly improves economic viability, and the Company can report that there is
an increase in the available mineable resource, as estimated by the Company,
is set out in Table 1.

Table 1 - Management Estimates for the Mineable Resource within Pits 1 and 2

 

 Mineable Resource Estimate
                  Tonnage Waste  Tonnage Oxide  Tonnage Fresh  Grade (g/t)  Oz
 Pit 1 ext. 120m  8,188,471      112,950                       1.6          5,978
 Pit 1 ext. 120m                                988,200        1.5          46,747
 Pit 2 40m        1,356,027      446,783                       1.1          15,803
 Pit 2 ext. 80m   2,345,470                     399,245        1.1          14,121

 

From the grade control drilling, carried out to 40 metres for the pits north
of the original open pit mined by AngloGold Ashanti in 2002/03, the mineable
resource has been assessed, by the Company in Pit 4 and Pit 3, which is an
extension of Pit 4, , and the Company's estimates for these northern Pits
along the Homase Trend and are set out in Table 2 below.

 

Table 2 - Management Estimates for the Mineable Resource within Pits 3 to 6

 

 Mineable Resource Estimate
            Tonnage Waste  Tonnage Oxide  Tonnage Fresh  Grade (g/t)  Oz
 Pit 3 40m  764,298        214,875                       1.1          7,228
 Pit 4      The former AGA Pit - Mined 2002/3
 Pit 5 40m  5,652,653      951,625                       1.1          33,660
 Pit 6 20m  184,358        55,224                         0.7          1,776

 

The above tables set out the latest management estimates for the mineable
resource, which has increased from those announced at 24 March 2022 and 12
November 2020.  The mineable resource is within the confines of the 602,000oz
JORC (2012) resource previously announced.

 

The locations of the Pits are set out at Figure 1 below:

 

Figure 1: Homase Mine - Pit Locations

 

 

Wardell Armstrong International Ltd. have been appointed to undertake an
independent review of the mineable resource and mine planning of the Homase
Mine, which includes an independent review of the Grade Control drilling at
the third pit along the Homase Trend which was completed earlier this year,
which is expected to be completed in Q1 2023.

 

Exploration

 

Diamond drilling commenced at Akrokeri Underground Mine with the initial
drilling results, announced 27 September 2022, confirming the continuity of
the mineralised zone at vertical depths of between 36 metres and 65 metres and
extending a minimum of 180m beyond the known southern limit of the mine. The
results from the remainder of the drill programme are currently being
reviewed, the Company expects this review to be competed within the first few
weeks of 2023.

 

The Company has undertaken further geochemical soil sampling programmes within
the Homase and Akrokeri Licence areas, as infill and to seek parallel zones of
mineralisation, following the programme carried out in 2018.  The anomalies
that were identified and announced in the 24 March 2022 are being explored
with further soil sampling and augering.

 

Competent Person's Review

 

The technical information within this announcement has been reviewed and
approved by Klaus Kappenschneider, an independent geologist with 30 years'
experience in gold mining, exploration and resource estimation.  Klaus is a
member of the Association of Professional Geoscientist of Ontario (APGO), is a
Competent Person (JORC, SAMREC, PEMREC) and a Qualified Person (NI 43- 101)
and accordingly, is a qualified person as required under the AIM Rules.

 

 

**ENDS**

 

For further information, please contact:

 

 GoldStone Resources Limited,
 Bill Trew / Emma Priestley         Tel: +44 (0)1534 487 757

 Strand Hanson Limited
 James Dance / James Bellman        Tel: +44 (0)20 7409 3494

 S. P. Angel Corporate Finance LLP
 Ewan Leggat / Charlie Bouverat     Tel: +44 (0)20 3470 0501

 St Brides Partners Ltd             Tel: +44 (0)20 7236 1177

 Susie Geliher / Max Bennett

 

 

About GoldStone Resources Limited

GoldStone Resources Limited (AIM: GRL) is an AIM quoted mining and development
company with projects in Ghana that range from grassroots exploration to
production.

 

The Company is focused on developing the Akrokeri-Homase project in
south-western Ghana, which hosts a JORC Code compliant 602,000oz gold resource
at an average grade of 1.77 g/t.  The existing resource is confined to a 4km
zone of the Homase Trend, including Homase North, Homase Pit and Homase South.

 

The project hosts two former mines, the Akrokerri Ashanti Mine Ltd, which
produced 75,000 oz gold at 24 g/t recovered grade in the early 1900s, and the
Homase Pit which AngloGold Ashanti developed in 2002/03 producing 52,000 oz
gold at 2.5 g/t recovered.  Production is currently focussed on the Homase
Mine however it is the Company's intention to build a portfolio of
high-quality gold projects in Ghana, with a particular focus on the highly
prospective Ashanti Gold Belt.

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018 (as amended).

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDMZMZZFLRGZZZ