at $1300/oz possible 1. Recovery of Gold from Mill Scats In June...

at $1300/oz possible

1. Recovery of Gold from Mill Scats
In June 2012, the Company completed a drilling program and economic study on the potential recovery of gold from a large stock pile of between 12 and 15 million tonnes of ball mill scats from the historical operations. The study considered a number of different process routes to recover between 100,000 and 175,000 ounces of gold through the retreatment of the highly mineralised material. The material was stockpiled at a time when gold prices averaged around US$300 per ounce, and the 2012 study was based on a gold price of US$780 per ounce.
The results of the program indicated that the project was viable but required significant capital expenditure for a relatively modest return, and the project was put on hold. Given the recent increase in the gold price to US$1300 per ounce, the Directors have decided to revisit the economics of the project.

2. Hydro Power Generation
The Company has commenced a desktop concept study to examine the commercial viability of utilising the flooded mine pit and water reservoir at Mt Leyshon to develop a pumped storage hydro project.
The site has a number of key attributes that make it amenable to pumped storage hydro power generation, including:
· an upper water reservoir of approximately 1,250ML capacity;
· a lower reservoir (the flooded mine pit) of approximately 138,000ML capacity;
· average head between the upper and lower reservoirs of approximately 315 metres;
· access to an existing 66kV transmission line and substation inside the project site and an existing 132kV transmission line within 24 kilometres of the site at Charters Towers;
· access to roads and other infrastructure such as water from the Burdekin Dam system; and
· A number of projections indicating a future shortage of peaking power availability in northern Queensland.
3. Further Exploration
The historical focus of the Leyshon mining operations was the Mt Leyshon Breccia, the main ore host, comprising a large pipe-like breccia, approximately 400 x 300 metres in plan, with a minimum vertical extent of 650 metres. A number of areas of brecciation and porphyry intrusion extend outside the main pit area. Historical surface sampling has identified areas of anomalous grades of gold, silver, lead and zinc. The Company will study the historical data to assess whether a new re-interpretation should be undertaken using modern day exploration methodologies including sampling and geophysics.
Next Steps

We look forward to updating Shareholders on the path forward for the project. The Company is also continuing to actively review other project opportunities and is in discussions with a number of parties with respect to possible transactions.