* Indicated and Inferred Resources increased 23% to 26.77 million tonnes grading 2.2 g/t for 1.87 million ounces
* Pit optimised ounces increased 49% to 15.76 MT grading 2.3 g/t for 1.19 million contained ounces
* 77% of pit optimised ounces lie within a central 3km long pit complex
* Mine scheduling studies and Bankable Feasibility Study coatings to be announced in mid May 2002
The Directors of Red Back Mining NL ("Red Back") are pleased to announce a resource inventory upgrade for the Chirano Gold Project in Ghana. Based on results of the 8353m drilling program, completed during the period October 2001-February 2002, and using a 1 g/t cutoff consultants Resource Service Group ("RSG") have estimated a new Indicated and Inferred Resource of 26,770,000 tonnes grading 2.2 g/t for 1,873,000 ounces.
1. The reported resources are based on a 1 g/t cutoff 2. The tonnage has been rounded to the nearest l0,000 3. All grades have been rounded to the nearest one decimal place 4. All ounces have been rounded to the nearest l000
Using a 1.0 g/t cutoff and assuming realisation of average US$300 per ounce gold price over life of mine the indicated and Inferred Resources were optimised by RSG into open pits containing a total of 15.76MT grading 2.3 g/t for 1,188,000 in situ ounces. Approximately 77% of these ounces lie within the 3km long central pit complex. The remaining 23% of the pit optimised ounces lie within five satellite pit areas.
RSG have advised that additional infill drilling in the new pit areas plus a selected small sample area drilled on a 12.5m x 12.5m grid will be required to convert the Inferred Resources into Indicated Resources and then into Ore Reserves. This program will be incorporated into the Bankable Feasibility Study ("BFS"). On the basis of previous drilling programs and the good continuity of mineralisation at Chirano, the conversion of pit optimisation ounces into Ore Reserves is expected to be high.
The upgraded resources represent a 23% increase to the Indicated and Inferred Resources of 21.46 MT grading 2.2 g/t for 1,519,000 ounces announced on 31 January 2001. Pit optimised contained ounces have increased 49% over the same period. These increases are explained by additional new pit areas as well as linking previously separate pits. In addition lower operating costs were applied based on a 2 MTPA process plant. The previous optimisation study was based on a 1.5 MTPA plant with higher operating costs.
Discovery costs have averaged $6 per resource ounce since Red Back acquired the Chirano project in 1998 which are considered very low by world standards.
Based on metallurgical test work which indicated a 93% recovery RSG has estimated a total of 1,105,000 recovered ounces in the optimised pits. Average strip ratio is 3.5. Approximately 86% of the resources and reserves comprise primary material.
Red Back is currently scheduling various mining scenarios in order to forecast annual production. The results will be announced in mid May 2002.
A $5.1 M capital raising to fund the BFS was announced to the ASX on 16th April 2002. African focussed mining company Resolute Mining Limited participated in the capital raising as part of a strategic relationship between the two companies on the Chirano BFS. Resolute's Obotan gold treatment plant will be utilised in the BFS assuming relocation of the plant some 50km to Chirano at the cessation of Obotan mining operations scheduled 2002.
R Ashton Managing Director
FOOTNOTE:
The reported Mineral Resources and pit optimisation studies have been compiled by Mr Brett Gossage and Mr Harry Warries respectively of Resource Service Group. Both are members of the Australian Institute of Mining and Metallurgy. They have sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 1999 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr Brett Gossage and Mr Harry Warries consent to the inclusion in this report of the resource and pit optimisation data in the form in which it appears.
