Yesterday Kentor Gold released an announcement to the ASX in the form of a Company Insight report. Normally I find these quite informative as they follow a more conversational tone and provided snippets of information not usually included in a standard company announcement. Unfortunately, yesterday’s one was fairly plain and did not offer too much additional information.
The update mainly focused on the Jervois project and mentioned that the first metallurgical test work conducted by Kentor Gold produced a 26% copper concentrate grade at a recovery of 94%. “This is a very good result and indicates that the ore is very amenable to concentration by flotation”. It was also achieved using a relatively coarse grind size of P80 90 micron. The benefit of this is that the coarser the grind size the lower the capital and operating costs. Obviously it is early days for the Jervois project so we really need more information and analysis before you can confirm any of the above.
The announcement also provided some details on the drilling that has taken place. The previous resource estimate was limited to a depth of 200 m below surface, with recent drilling going as far down as 470m. The ore body does appear to get narrower at depth, but is also higher grade. As a result of this drilling the insight report states “We expect to complete an updated Resource estimate for Jervois later this month”, so that is something we can all look forward to. Simon Milroy also stated that “the Jervois project has the potential to be the largest project for Kentor Gold. However further drilling is required”.
Secondly, onto Burnakura, the feasibility has been delayed for a number of reasons including the fact that it will now also examine the potential of resuming underground mining operations. It is now anticipated that this study will be release in January 2012, however it is important to note that this will not delay production which is scheduled to commence in June 2012.
The report then goes on to talk about the Kyrgyz Republic operations where Simon Milroy states that “The number 1 priority for Kentor Gold in 2012 is to get Andash into construction”. Originally we were expecting approval on this project prior to Christmas. But the tone of the announcement was not as bullish as in the past so I feel this may be pushed into January 2012.
Finally, one of the more interesting parts of the announcement occurred at the end where Simon Milroy reaffirmed that the company’s strategy is to acquire, develop and operate advanced projects which have existing resources. He then goes on to say that “There will be more volatile times ahead, and we look forward to the opportunities that they will undoubtedly present to Kentor Gold”. This leads me to wonder if, once we are in production and generating cash, the company will look at further acquisitions.
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