ACN 092 471 513
QUARTERLY REPORT FOR THE PERIOD ENDING
30 JUNE 2017
HIGHLIGHTS
PENNY’S FIND GOLD MINE - KALGOORLIE (WA)
Full scale open pit mining commenced on 5 May
4,493 tonnes of ore mined and stockpiled on the ROM pad
More than 0.5 million bcm of waste moved
Location of Penny’s Find Project
REVIEW OF OPERATIONS
Open Pit Mining
On the 5th May,
full scale open pit mining operations commenced at the Penny’s Find goldmine following completion of pre-mining site works.
By end of quarter, the open pit had progressed to 10m deep with 4,493 tonnes of ore at an
average grade of 2.22g/t Au being mined and stockpiled ready for haulage to the toll
treatment plant.
The gold grade reflects the leached, lower grade top of the orebody near
surface.Mining contractor, Blue Cap, has moved in excess of half a million bank cubic metres (bcm)
of waste from the pit with very little drill and blast being required to date. This, along with
the use of short haul temporary pit ramps, has had a positive impact on costs that were forecast in the Bankable Feasibility Study.
At the end of the quarter more than 16% extra load and haul of waste was achieved than
was previously budgeted for. The shorter haul meant less fuel consumption per bcm moved, while drill and blast costs were also down 17% compared to budget. At the end of quarter,
the amount of draw-down on the Blue Cap funding facility stood atapproximately $2.56 million (refer ASX announcement 21 March 2017).
Mining Physicals Units
June 2017 Qtr
bcm
545,233
Ore mined tonnes
4,493
Grade g/t Au 2.22
Mine Production Waste mined
On the 28 June 2017, Empire announced the appointment of Mr George Hewitt as Mine
Manager to oversee the transition from development to full production. Mr Hewitt has
extensive experience in open pit operations throughout Western Australia.
No lost time injuries occurred during the quarter.
Haulage and Treatment
Kalgoorlie-based Hampton Transport Services is scheduled to begin haulage of ore to the
Burbanks Mill near the town of Coolgardie in late July.
Each haulage and treatment campaign is scheduled to process between 15,000 and 20,000 tonnes of gold ore.As announced to the ASX on the 5 July 2017, the Company signed a second agreement for
the toll treatment of ore from Penny’s Find. This second agreement is with Maximus Resources Pty Ltd, which operates the Burbanks Mill, nine kilometres south of Coolgardie.
Empire had previously signed an agreement with Golden Mile Milling to toll treat Penny’s
Find ore through the Lakewood Mill situated on the southern outskirts of KalgoorlieBoulder.
However, due to scheduling problems at the Lakewood Mill and Empire’s desire to
obtain immediate gold production, ore is initially being directed to the Burbanks Mill.
Processing of Penny’s Find ore at Burbanks will commence in August.
Underground Potential
During the September 2017 quarter, the Company expects to commence a six hole
diamond drilling program targeting underground mineralisation. The aim is to increase
confidence in the underground mineralisation and to convert some Inferred resources to
Indicated. Additional resources may result from the deeper drill holes.
This drilling will also yield important additional geotechnical data for underground mining
studies.
Completion of this drilling is a precursor to the commencement of a final feasibility study.
The planned intercept points are shown with yellow stars on the long section below
Penny’s Find long section showing drill hole pierce points
Empire is working to eventually take the mine underground as Penny’s Find’s gold
mineralisation extends to at least 250m depth where it remains open with a current known
deeper Inferred and Indicated resource inventory of 170,000 tonnes @ 5.40g/t Au beneath
the open pit
*Announced to the ASX on 2 September 2015
A preliminary underground mine design has been completed to ensure it is able to mesh
smoothly with the completion of the open pit mining operation. Penny’s Find Preliminary Underground Mine Design - Long Section
About Penny’s find
The high grade gold mineralization at Penny’s Find is hosted by quartz veins at the contact
between sediments and basalt.
Both oxide and fresh mineralization are free milling with 98% and 99% recoveries achieved
in testwork respectively.
There is also a high gravity recoverable gold component, 53% for
oxide and 85% for fresh.
The Penny’s Find Bankable Feasibility Study, announced to the ASX on the 21 June 2016,
found that based on a gold price of A$1,500/oz and a probable ore reserve of 146,000
tonnes @ 4.62g/t Au (Table 3), just the open pit operation alone would generate in the
order of $7.6 million in free cash flow in less than a year. For every $100 increase in the
price of gold above A$1,500, the open pit would generate an additional $2 million free cash
flow.
The Penny’s Find ore reserve is contained within a single open pit being mined to a depth
of 80m with ore trucked off site for conventional gravity recovery and CIL circuit processing.
All the material assumptions underpinning the Bankable Feasibility Study continue to apply
and have not materially changed.
Ore Reserve Summary - based on A$1,500/oz
PENNY'S FIND OPEN PIT ORE RESERVE - FEBRUARY 2016
DESCRIPTION
GRADE
GOLD TO
g/t Au
MILL (ozs)
-
-
-
PROBABLE
146,000
4.62
21,700
TOTAL
146,000
4.62
21,700
PROVED
TONNES
FYI Resources Limited (Empire 13.54% interest)
ASX-listed FYI Resources Ltd (ASX Code “FYI”) is focused on potash exploration in South
East Asia where potential exists for the discovery of first tier potash deposits.
FYI Resources is currently in joint venture negotiations with a Chinese group regarding
resource development and potential production in Laos.
FYI Resources also has applications pending for potash tenements covering two separate
project areas in Thailand.
Whilst the potash strategy is continuing, FYI has pursued a high purity alumina (HPA)
development opportunity in Western Australia through the purchase of 100% of the shares
of Kokardine Kaolin Pty Ltd, as announced to the ASX on the 8 May 2017.
Kokardine has been evaluating a vertically integrated HPA production strategy through the
mining of kaolin from its wholly owned kaolin resource at Cadoux, 180 kilometres northeast
of Perth in WA’s Wheatbelt region. High purity alumina is used in many high tech markets
such as batteries, sapphire glass for mobile phone and television screens, and LED lights.
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