Pantoro Ltd (ASX:PNR, OTC:PNTOF) will bring forward the underground development at Scotia Mine within the Norseman Project in Western Australia based on a review which outlined significant improvements to gold production and the cost profile.
The review of Pantoro’s mining strategy determined that modifications at Scotia would be beneficial to production and cost reduction leading to the decision to deploy the underground development four months earlier than previously planned.
Underground operations at Scotia are now expected to begin early in the June 2024 quarter.
Tendering for work
Pantoro is tendering for the underground work and has fielded strong interest from multiple tier-1 underground contractors.
Contractor selection is expected to be completed in February 2024 and contract award is planned for March 2024.
The company’s revised mine plan is targeting annual production from the Norseman Gold Project of 100,000 to 110,000 ounces.
Cost savings
Norseman’s AISC is projected to be
With the Scotia South and Central open pits advancing below the historical pit voids, ore widths and grades are meeting and often exceeding the resource model expectation.
Recent grade control and mining results further confirm Scotia’s suitability for underground mining and Pantoro has decided to accelerate the start of development.
Supported by results
Grade control drilling has returned strong results, including:
- 6 metres at 9.32 g/t from 30 metres;
- 9 metres at 14.6 g/t from 6 metres;
- 6 metres at 17.08 g/t from 17 metres;
- 6 metres at 6.25 g/t from 8 metres;
- 10 metres at 5.63 g/t from 24 metres;
- 3 metres at 17.13 g/t from 0 metres; and
- 3 metres at 13.67 g/t from 23 metres.
Scotia South open pit will continue to its original planned depth, while the Scotia Central open pit will advance to the 140mRL, about 30 metres above the previously planned pit floor.
Reduction in the Scotia Central pit depth results in a material reduction in the remaining open pit stripping ratio which now stands at about 6.4:1.
Bringing forward underground development reduces site costs by removing further open pit high stripping ratio cutbacks, nearly halving monthly open pit movements.
In addition, the early start of underground mining allows the underground workings to access the Scotia North orebody faster than the planned cutback in that area would have.
Open pit changes
As a result of these changes, Pantoro and its contractor, Hampton Transport Services, have agreed to terminate the open pit contract on January 31, 2024.
Pantoro has appointed APS Mining and Civil (load and haul operations) and Rock on Ground (drill and blast) to complete the reduced scope in the Scotia and Green Lantern open pits, with mining expected to be completed during the December 2024 quarter.
APS Civil and Mining is well known to Pantoro having completed all the open pit mining at its Halls Creek operations, as well as all bulk earthworks for the Norseman Gold Project construction.
Completion of the Scotia open pits in the final quarter of 2024 will see ore stockpiles of around 800,000 tonnes of medium and low-grade ore available for processing during the coming years, supplementing the underground ore production when necessary.
Open pit mining will be ongoing and is expected to recommence later in 2025 at the Princess Royal and Gladstone Everlasting mining centres which are fully permitted.
Underground plan
The Scotia Underground Mine has been a key part of the Norseman mine plan since the feasibility stage, adding substantial high-grade ore feed to the processing plant.
Industry-leading mining consultants, Entech have completed mine design and scheduling work for the Scotia underground mine.
The Scotia open pit has been developed with the intention of commencing underground operations and as such only limited non-mining capital is required for the development.
Key project milestones for Scotia underground include:
- Underground development and production contract award – March 2024;
- Portal excavation – April 2024;
- Ore development – July 2024;
- Production stoping – Q3 CY 2024; and
- Steady state – Q1 CY 2025.
The revised mine plan cost estimates and schedule have estimated the following key metrics:
- Pre-production expenditure – $8 million;
- Maximum exposure before positive cashflow – $12.5 million at $2,900 per ounce gold price (Sept 24 Qtr);
- Steady-state production – 450,000 tonnes per annum;
- Mine Plan Grade – 4.5 g/t gold; and
- Expected ASIC
Extension potential
With mineralisation at Scotia is open at depth along the entire strike of the orebody, Pantoro considers that there is a high probability of ongoing extensions to mine life as development and extensional exploration continues at depth.
In addition, further definition of known mineralisation outside of the open pit footprint may provide additional opportunities, and grade control drilling will begin from underground as soon as planned drilling platforms have been established.
While some inferred ore and underground extensions at existing mines are assumed in the long-term plan, the Norseman Gold Project mineral resource and ore reserve includes a number of additional projects which are scheduled after 2030.
The additional projects would be planned to begin sooner should additional underground resource extensions not materialise through additional drilling and development.
Large resource inventory
Norseman Project has a large mineral resource inventory of 45.6 million tonnes at 3.2 g/t for 4.75 million ounces. Conversion from mineral resources to ore reserves has been reliably high during Pantoro’s drilling campaigns, and additional drilling of known resources is expected to continue the rapid growth of the reserve.
Pantoro is committed to recommencing resource definition and exploration drilling during 2024, with the objective of identifying additional high-grade resources which will support ongoing growth in the production profile at Norseman.
In another positive development, Pantoro has strengthened its management team with the appointment of highly experienced mining engineer Tom De Vries as mining manager.