TIDMHGM
RNS Number : 6439G
Highland Gold Mining Limited
09 August 2016
The following amendment(s) has (have) been made to the 'Q2 2016
Operating Results' announcement released on 09.08.2016 at 07:00
under RNS No 6296G:
- Gold output figure corrected in Table 4 (Sredny Golgotay)
All other details remain unchanged. The full amended text is
shown below
HIGHLAND GOLD MINING LIMITED
Q2 2016 Operating Results
09 August 2016
Highland Gold Mining Limited ("Highland Gold" or the "Company")
today reports its operating results for the three months ended June
30, 2016 ('Q2').
HIGHLIGHTS
-- Total Q2 2016 production of 71,782 oz of gold and gold equivalent at Mnogovershinnoye (MNV), Novoshirokinskoye (Novo) and Belaya Gora, an increase of 12% from 64,091 oz in Q2 2015.
-- Average realized gold price of 1,264 USD/oz over the reporting period.
-- MNV and Novo exceeded internal production targets for the
quarter, while at Belaya Gora efforts to optimise operations were
ongoing.
-- Exploration work continued on the Northern ore body at MNV,
with reserves expected to receive approval from regulators by
year-end.
-- Work commenced on the planned expansion of processing capacity at the Novo mill.
-- A Fatal Flaw Review of the pre-feasibility study for Kekura,
completed by RungePincockMinarco, supported open pit and
underground mine design.
FOR FURTHER INFORMATION PLEASE CONTACT:
Highland Gold John Mann, Head of Communications
+ 7 495 424 95 21
Duncan Baxter, Non-Executive Director
+ 44 (0) 1534 814 202
Numis Securities Limited John Prior, James Black
(Nominated Adviser and Broker) Paul Gillam
+44 (0) 207 260 1000
Peat & Co Charlie Peat
(Joint Broker) +44 (0) 207 104 2334
OPERATIONAL REVIEW
Mnogovershinnoye (MNV), Khabarovsk Region, Russia
-- A re-evaluation of MNV's historical waste dumps resulted in
300,000 tonnes of ore being put on the balance sheet at a grade of
just over 1.0 g/t.
-- Overall grades at the mill improved by 16% year-on-year for
the second quarter and 9.6% for the first half due to substantially
higher grades from underground mining.
-- Recovery rates rose to over 91% in Q2.
MNV Units Q2 2015 Q2 2016 H1 2015 H1 2016
------------------------- ------- ---------- -------- ---------- --------
Waste stripping m(3) 1,058,707 305,900 1,780,663 305,900
------------------------- ------- ---------- -------- ---------- --------
Underground development m 2,525 2,924 4,287 5,863
------------------------- ------- ---------- -------- ---------- --------
Open-pit ore mined t 208 440 22 067 289 420 22 067
------------------------- ------- ---------- -------- ---------- --------
Open-pit ore grade g/t 2.05 3.02 2.08 3.02
------------------------- ------- ---------- -------- ---------- --------
Waste dumps ore mined* t - 125 336 - 276 312
------------------------- ------- ---------- -------- ---------- --------
Waste dumps ore grade g/t - 1.01 - 1.06
------------------------- ------- ---------- -------- ---------- --------
Underground ore mined t 170,834 186,016 330,329 351,336
------------------------- ------- ---------- -------- ---------- --------
Underground ore grade g/t 2.12 3.27 2.21 3.20
------------------------- ------- ---------- -------- ---------- --------
Total ore mined t 379,274 333,419 619,749 649,715
------------------------- ------- ---------- -------- ---------- --------
Average grade g/t 2.08 2.40 2.15 2.28
------------------------- ------- ---------- -------- ---------- --------
Ore processed t 364,690 373,875 705,493 672,600
------------------------- ------- ---------- -------- ---------- --------
Average grade g/t 2.00 2.32 2.08 2.28
------------------------- ------- ---------- -------- ---------- --------
Recovery rate % 87.79 91.10 89.0 90.93
------------------------- ------- ---------- -------- ---------- --------
Gold produced oz 19,739 25,970 42,451 44,929
------------------------- ------- ---------- -------- ---------- --------
* In a table footnote in the Company's Q1 operating results,
waste dumps were mislabelled as "stockpiles".
Novoshirokinskoye (Novo), Zabaikalsky Region, Russia
-- Ore mining and processing continued to gain pace in the
second quarter, with ore production rising by 19% versus Q2 2015
and processing up some 13% from the same period last year.
-- Average grades were nearly 11% higher year-on-year in Q2,
while recovery rates also improved during the period.
Novo Units Q2 2015 Q2 2016 H1 2015 H1 2016
------------------------- ------- -------- -------- -------- --------
Underground development m 2,795 2,999 5,312 5,808
------------------------- ------- -------- -------- -------- --------
Ore mined t 171,792 205,287 327,629 401,983
------------------------- ------- -------- -------- -------- --------
Average grade * g/t 5.16 5.68 5.4 5.5
------------------------- ------- -------- -------- -------- --------
Ore processed t 173,154 195,593 331,551 371,945
------------------------- ------- -------- -------- -------- --------
Average grade * g/t 5.17 5.72 5.4 5.6
------------------------- ------- -------- -------- -------- --------
Recovery rate * % 85.57 86.56 85.3 86.5
------------------------- ------- -------- -------- -------- --------
Gold produced * oz 24,606 31,147 48,634 57,960
------------------------- ------- -------- -------- -------- --------
* In gold equivalents at actual prices.
(Metal grade of mined ore = Au 3.09 g/t, Ag 86.08 g/t, Pb 2.63
%, Zn 0.71 %)
Preparatory construction work has commenced on the planned
expansion of Novo's processing capacity to 1.3 million tonnes per
annum. Geotechnical construction studies are being finalised at the
site and design documentation is being developed. The mine and mill
are expected to reach the new, increased capacity in late 2018.
Belaya Gora, Khabarovsk Region, Russia
-- Ore processing totalled 450,278 tonnes in Q2, an increase of 17% over Q2 2015.
-- Higher processing volumes were offset by a fall in grades,
which were 35% lower in Q2 compared to the same period last
year.
-- The percentage recovery rate fell slightly due to the lower
grades, but improvements in mill performance meant the amount of
gold sent to tailings was actually reduced to 0.33 g/t from 0.42
g/t in Q2, and to 0.35 g/t from 0.45 g/t for the first half.
Belaya Gora Units Q2 2015 Q2 2016 H1 2015 H1 2016
----------------- ------- -------- ---------- ---------- ----------
Waste stripping m(3) 949,770 1,663,362 1,557,257 3,294,701
----------------- ------- -------- ---------- ---------- ----------
Ore mined t 575,632 590,923 885,314 955,385
----------------- ------- -------- ---------- ---------- ----------
Average grade g/t 1.65 1.24 1.63 1.22
----------------- ------- -------- ---------- ---------- ----------
Ore processed t 385,381 450,278 674,985 833,509
----------------- ------- -------- ---------- ---------- ----------
Average grade g/t 2.01 1.31 1.87 1.29
----------------- ------- -------- ---------- ---------- ----------
Recovery rate % 78.95 75.2 75.89 72.7
----------------- ------- -------- ---------- ---------- ----------
Gold produced oz 19,476 14,665 30,157 25,349
----------------- ------- -------- ---------- ---------- ----------
Studies continued on avenues for improving recovery rates at the
mill, while outside consultants have been brought in to assist in
optimising mining operations and reassessing gold reserves.
Sredny Golgotay (Kaftan Site), Zabaikalsky Region, Russia
A pilot project to mine ore from the Kaftan site of the Sredny
Golgotay licence, initiated in Q1 of this year, continued in the
second quarter with 4,501 tonnes of ore transported to the Novo
mill for processing. The ore had an average grade of 3.6 g/t,
somewhat below initial expectations.
To help to better understand the quantity and quality of
reserves at Kaftan, contractor Sosnovgeo carried out part of a
7,900 metre grade control drilling program at the site throughout
Q2. As of June 30, 6,654 linear metres were drilled. Assay results
were obtained for 6,610 samples. The drilling was completed in July
and results are expected in the third quarter.
Sredny Golgotay (Kaftan) Units Q2 2015 Q2 2016 H1 2015 H1 2016
-------------------------- ------- --------- -------- -------- --------
Underground development m - 255 - 766
-------------------------- ------- --------- -------- -------- --------
Ore mined t - 10,960 - 13,103
-------------------------- ------- --------- -------- -------- --------
Average Grade g/t - 2.53 - 2.50
-------------------------- ------- --------- -------- -------- --------
Ore processed t - 4,501 - 4,501
-------------------------- ------- --------- -------- -------- --------
Average Grade g/t - 3.6 - 3.6
-------------------------- ------- --------- -------- -------- --------
Gold produced oz - 433 - 433
-------------------------- ------- --------- -------- -------- --------
DEVELOPMENT PROJECTS
Kekura, Chukotka Autonomous District, Russia
A Fatal Flaw Review of the Kekura pre-feasibility study,
completed by RungePincockMinarco during the quarter, resulted in a
positive opinion on mine designs for both the open pit and
underground scenarios. Ore reserves were determined to be of high
quality and the project was recognized as having a low sensitivity
towards gold prices.
The work produced by RungePincockMinarco identified a pathway
forward for further optimisation of technical solutions and
improvement of the project's economic viability.
Preparations for 2017 construction and installation are
underway, including the procurement of construction materials and
the selection of contractors to build key infrastructure
facilities.
In the second half of the year, the Company will focus on
obtaining approval of project documentation from the main
environmental and state expert review panels; receiving approval of
design documentation; obtaining permits for construction; and
further preparing for the commencement of construction and
installation work.
Klen, Chukotka Autonomous District, Russia
International consultants Hatch were selected via tender to
draft a new pre-feasibility study for a processing plant and
infrastructure facilities at Klen. Initial indications are that
opportunities do exist to improve and optimise previous options
considered for the project.
The Company expects to receive a full financial and economic
model for Klen and to make a decision on further project
development in the second half of this year.
Lyubov, Zabaikalsky Region, Russia.
During the second quarter, the Company signed an agreement with
an outside contractor to process ore from existing tailings at the
Lyubov site. Impoundments, water intake and drainage ditches have
been arranged, a processing plant has been installed, and
commissioning is underway, with all of the necessary equipment and
materials delivered to the site. A pilot programme to test the
project's production potential is expected to commence in the third
quarter of this year.
Baley Ore Cluster, Zabaikalsky Region, Russia.
(Taseevskoye, Sredny Golgotay and ZIF-1 tailings licences)
At Taseevskoye, work continued on a programme to evaluate
oversized rock stockpiles with a view to confirming reserves for a
potential heap leaching initiative. The Company drilled 19 holes
for a total of 208.7 metres drilled in Q2. Results indicated that
the rock massif is likely waste from previous mining and the
resource has been estimated at 700,000 tonnes at an average grade
of 0.8 g/t.
On May 10, the Company began the process of dewatering the
existing Taseevskoye open pit in order to provide drill platforms
necessary for further evaluation, initially removing approximately
135,000 m3 of water. The programme will continue up until
mid-November of this year.
At Sredny Golgotay, testwork was carried out on the first phase
of R&D work on the development of a pilot XRF plant, which
would enable the pre-concentration of gold-bearing ores from the
site. Initial results indicate that XRF might be a feasible and
effective solution, and a decision was made to continue to the
second and third phases of the R&D programme.
EXPLORATION
Mnogovershinnoye, Khabarovsk Region, Russia.
The Company is close to completing the second stage of its
exploration drilling programme at the Northern ore body (MNV Lower
Horizon licence), which called for 11,000 m of diamond drilling
this year. An ore zone of approximately 600 m in length with an
average thickness of 1.2 m and average grade of 5.7 g/t has been
identified on the Eastern flank of this ore body. An initial
resource estimate from this drilling program is expected in the
fourth quarter.
Drilling and evaluation of the new reserves are ongoing. An
additional 2,000 m on a 50x50 m grid were added to the programme to
evaluate the Western flank of the ore body.
Also in the second quarter, exploration drilling at underlying
levels of the Southern and Flank ore bodies were initiated.
At the Chaynoye ore body (MNV Western Flank licence), trenching
has commenced to verify anomalies identified during earlier
exploration efforts.
Blagodatnoye, Khabarovsk Region, Russia.
In order to augment the mineral resource base for Belaya Gora,
the Company has targeted further exploration of gold reserves at
the nearby Blagodatnoye gold deposit. The licence has preliminarily
measured (2) category reserves for open pit mining of about 10
million tonnes of ore and approximately 525,000 oz of gold. Initial
mettalurgical testwork has supported gold recovery of up to 93% via
cyanidation.
An exploration drilling programme of 15,000 m continued during
Q2 for the purpose of registering reserves with regulators and
potentially adding measured and indicated reserves. So far, 9,300
linear metres have been drilled, with completion of the program
expected in the fourth quarter. Additionally, processing samples of
3.1 tonnes of ore were extracted to develop a flowsheet for
processing at the Belaya Gora mill.
Kekura, Chukotka Autonomous District.
A 25,000-metre exploration drilling programme, initiated in Q1,
continued during the second quarter with the goal of confirming and
potentially increasing reserves intended for underground mining,
which were not included in the JORC reserve audit results announced
earlier this year.
As of June 30, a total of 16,900 metres had been drilled.
Preliminary gold assay results continue to confirm the presence of
commercial mineralization with high gold grades in
previously-explored ore zones. The program is scheduled for
completion in the fourth quarter.
Sredny Golgotay, Zabaikalsky Region, Russia.
An exploration drilling programme of 15,000 m commenced in Q2 in
order to validate state-registered reserves across the Sredny
Golgotay licence; to check for potential additional resources from
low-grade halos surrounding high-grade veins; and to identify
reserves suitable for open pit mining. The results are expected by
year-end.
HEALTH, SAFETY, AND ENVIRONMENT
The Company remains dedicated to ensuring occupational safety
and managing production risks, as well as offering relevant
training for its employees and encouraging them to take personal
responsibility at the workplace.
The Lost Time Incident ("LTI") factor (defined as the number of
lost time incidents for every 200,000 man hours) in the first half
of this year was 0.31 (0.25 in H1 2015). Five incidents were
recorded across the Company, including three at MNV and two at
Novo. All of them were minor injuries.
By mid-year, a safety induction (1 day) course was given to 688
employees in 2016. Meanwhile, 98 managers and specialists passed
self-tuition courses and testing using OlimpOKS software (without
work disruption) and were certified on industrial safety (7-30 day
programmes).
Auxiliary mine rescue teams are kept ready at mine sites to
address emergency localisation and response.
The Company continues to observe environmental and regulatory
requirements and no environmental incidents were reported. In 2016,
environmental safety training was given to 688 employees as of June
30.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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