Yesterday Kentor Gold released their Quarterly Report to 31 December 2011. As is usually the case with these announcements there was not a whole heap of new information provided. The announcement was however quite detailed and provided a good summary of our operations for anyone considering an investment in the company.
My comments on the announcement will be provided under the heading associated with each project:
Jervois Copper-Silver-Gold Project, NT
We recently received the updated resource statement for the project which included a 33% increase in copper and 27% increase in silver based on a cut-off grade of 0.5% copper. There is the potential for further upside in the project with both additional exploration targets (copper) and the ability for gold to be added to the resource with further drilling.
Preliminary results from metallurgical testing were also announced during the quarter. Several batch tests were undertaken and the overall response from initial testing indicated the production of a concentrate with a grade of 26% copper at 94% recovery. The high concentrate grades and good recoveries were achieved at a relatively coarse grind size of P80 90 micron and additional testing will now take place to determine whether economies can be achieved through even coarser grinding and reduced lime consumption.
The summary of this project also noted that Auralia Mining Consulting have been employed to run put optimisations and schedules and once completed this will allow mining costs and underground inventory to be estimated to enable a mining schedule to be produced. A host of other consultants have been appointed for further engineering work and the results of the scoping study will be available in April. It is then anticipated that this will lead to a full feasibility study on the project this year.
As a result we now have another deadline to mark in our calendar and if the scoping study comes out anywhere near where management expect then we should be well on the way to convincing the market that this project has serious potential.
Burnakura Gold Project
For those of you who follow my blog or Kentor Gold closely you will know that the feasibility study on this project has been delayed. The announcement states that the feasibility study results will now be available in April 2012. This however, does appear to be an error and has been discussed/confirmed on Hotcopper. The feasibility on the CIL operations is due very shortly and it is the heap leach feasibility that is due in April 2012. Hopefully the company is able to confirm this to the market later today.
Secondly, the refurbishment of the existing processing plant at the site and mine planning continues to take place. The company has also filled a number of senior management positions and is on track to commence production in mid-2012.
Gabanintha Gold-Copper Project
The HeliTEM survey flown over the project in September identified a number of drilling targets. A 4,000 m RC drilling programme will be conducted in the first quarter 2012 to test the targets generated by the survey.
Andash Gold-Copper Project
We are still waiting for the Kurulti to take place and the Quarterly Report does not really provide any additional information on this. The general consensus among the well-researched posters on Hotcopper is that there have been delays with the appointment of Government Ministers (new Government was formed in December 2011) and that the Mining Department is transitioning to a new framework of operation. Once this is sorted the villagers will be able to hold the Kurulti, invite the relevant Ministers and give us the go ahead for the project.
Bashkol Exploration Licence
As previously reported in the quarter the initial exploration results were promising. This is underlined by the following statement in the Quarterly: “The results of the 2011 work – the extent of the prospect and the high grade of the samples – increased the Company’s expectations of the mining potential of Bekbulaktor.” A drilling program is now being planned to establish a gold-copper resource.
Geothermal Energy – Solomon Islands
Kentors last Quarterly report mentioned our interest in a Geothermal project that many had long since forgotten about. Kentor Energy (100% owned by Kentor Gold) is awaiting approval by the Government of the Solomon Islands of an application for a geothermal prospecting licence.
During the Gold Symposium I spoke to Simon Milroy about this project and he informed me that the exploration work is very simple and requires minimal drilling. They can then quickly proceed to moving forward with the project.
Once the project is proved up Kentor Gold plans to Divest Kentor Energy into a separately self-funded entity. It now appears as though we just need to wait for the relevant Government Department to sign off on our licence before we can get the ball rolling. I would expect that any divestment would take place in approximately 12 months.
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