Kirkalocka Gold Mine in Western Australia Undergoes Refurbishment

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Researched by Industrial Info Resources (Perth, Australia)--The Kirkalocka gold mine in Western Australia is readying for refurbishment after being under care and maintenance since August 2008. Mount Magnet South NL (ASX:MUM) bought the mine and processing plant from its previous owner, Equigold Limited (Perth, Western Australia), for an estimated $5 million in May 2009.

The mine site is located in the Murchison gold region, about 65 kilometres south of the regional town of Mount Magnet and 520 kilometres northeast of state capital Perth in Western Australia. A total of 294,000 ounces of gold was produced between 2002 and 2008 from the Kirkalocka mine. Associated infrastructure was included in the purchase, such as a 1.2 million-ton-per-year carbon-in-leach processing plant, a 130-man accommodation camp, and a 1,800-meter airstrip.

The plant equipment from the previous owner remained in good and working condition, comprising a primary crusher; a single 1.4-megawatt SAG mill; a gravity circuit; and a six-stage leach cell. A new scrubbing circuit and three-stage crushing circuit will be added to the plant in the second year of operations. The addition will allow the processing plant to achieve a total processing output of 1.6 million tons per year.

Equigold's primary focus was on operating a low-cost, single pit mine. Several areas under the company's original target list and a potential for underground prospects were not explored. The Kirkalocka mine has had a productive history, despite of lower gold prices in 2008, when other gold mines were finding it difficult to sustain the increasing costs.

The 2011 mineral resource estimates show the presence of a total 360,000 ounces of gold, with an overall average head grade of 1.1 grams per tonne. Mount Magnet's current drilling efforts are designed to improve the overall head grades in order to substantially reduce the production costs.

Mount Magnet has accounted for an initial capital expenditure of $29 million for the restart and refurbishment, and an additional $6.8 million for the addition of secondary and tertiary processing circuits. The company expects the operating costs to be $1,070 per ounce.

The newly appointed project manager, Dale Harrison, expects the processing plant to be up and running by third-quarter 2013.

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