Havilah Resources continues to fast-track West Kalkaroo starter gold project towards mining decision

Havilah Resources Ltd (ASX:HAV) (FRA:FWL) continues to advance the West Kalkaroo starter open pit gold project in South Australia with key tasks required to bring the project towards a mining decision. A major achievement for the three months to April 30, 2021, was lodgement of the Kalkaroo PEPR by Kalkaroo Copper Pty Ltd, a wholly-owned Havilah subsidiary, with the Department for Energy and Mining (DEM) for assessment and approval of the proposed West Kalkaroo open pit gold mining operation, risk mitigation strategies and mine closure plans. Completion of the PEPR document was the culmination of many months of dedicated effort by Havilah’s staff and consultants and is the final permitting approval required for the go-ahead of the West Kalkaroo open pit gold mine, which is intended to be a starter project for the larger Kalkaroo Copper-Gold-Cobalt Project. Set to produce 80,000-90,000 ounces DEM guidance indicates a minimum three-to-four-month assessment and approval period, subject to there being no major revisions required. The PEPR covers the proposed West Kalkaroo gold open pit that is at the very western (and upper) part of the main Kalkaroo copper-gold deposit. West Kalkaroo mining operation is initially proposed to produce 80,000-90,000 ounces of gold and 5,000 tonnes of native copper (near pure copper metal) over a three to your year period. This open pit design has the flexibility for extension to the east for several more years in oxidised ore and has a high degree of optionality as the Kalkaroo project sulphide copper production could be initiated at any time after completion of the West Kalkaroo open pit, subject to sufficient capital being available. Quarter highlights Other important tasks related to the West Kalkaroo gold project during the three-month period included: Gold processing plant ongoing FEED (front end engineering design) studies including final process flow sheet design, equipment selection and preliminary costing; Site visits with potential mining contractors with a view to agreeing on the terms and scope of possible mining contracting arrangements; Completion of six sterilisation drill holes in the vicinity of the planned locations of key infrastructure, including the processing plant, tailings storage facility and waste dump to ensure that they will not be built too close to potentially economic mineralisation; Generation of a preliminary financial model, which indicates robust economics at current spot gold prices; and Infill resource drilling along strike of the proposed open pit to improve confidence in continuity of mineralisation.   Development of the open pit gold mine at West Kalkaroo is still subject to a final investment decision by the Havilah board, obtaining financing and final South Australian Government approvals. It should be noted that Havilah has already secured the required mining permits for the Kalkaroo project (mining leases and miscellaneous purposes licences). The company also owns the surrounding Kalkaroo Station pastoral lease, a non-mineral asset on which the Kalkaroo project is located, thus reducing land access risks for the project. 1.1 million tonnes of copper Havilah’s Kalkaroo Copper-Gold-Cobalt Project contains JORC mineral resources of 1.1 million tonnes of copper, 3.1 million ounces of gold and 23,200 tonnes of cobalt. It has an open-pit JORC ore reserve of 100.1 million tonnes at a 0.89% copper equivalent of which 90% is in the proved category. As such, Kalkaroo is one of the largest undeveloped open pit copper-gold deposits in Australia on a copper equivalent ore reserve basis. The spot copper price has had a remarkable rise of over 30% since December 2020, which has resulted in an upward adjustment to the long-term consensus copper price to USD3.50/lb. Havilah is also investigating the rare earth potential of Kalkaroo along with West Kalkaroo. Mutooroo project activities During the quarter, a cultural heritage survey was undertaken at the Mutooroo Copper-Cobalt-Gold Project area with the Wilyakali Native Title claimants and their appointed anthropologist. This survey had been delayed from 2020 due to COVID-19 related issues. The survey cleared two outlying copper-cobalt-gold prospects, namely Cockburn and Mutooroo West. Once drilling approvals are granted by the DEM, Havilah plans to move its drilling equipment south of the Barrier Highway and begin drilling in the Mutooroo project area. At the Cockburn prospect, a follow-up field check by Havilah geologists confirmed the likely source of the geochemical anomaly as a sulphide gossan that returned highly anomalous copper (up to 4,000 parts per million (ppm) or 0.4%) and cobalt (up to 1,500 ppm or 0.15%) Niton XRF readings. Iron ore projects Survey work was undertaken by the Wilyakali Native Title claimants and their appointed anthropologist at the Grants Basin, Maldorky and Grants iron ore projects and this has cleared drill hole collar locations for an additional up to 64 RC drill holes. Of these, 26 holes are for infill resource drilling at Grants to gain greater confidence in the current estimated 304 million tonnes inferred JORC mineral resource. The remaining 38 holes were sited for resource definition purposes at Grants Basin in the western outcropping section. This drilling and the resource generated would form the basis for a mining scoping study for an open pit, in order to attract future project investment. At this stage, it is planned drilling will be carried out by Havilah’s own drilling crew using a dry-hired percussion drilling rig, following drilling in the Mutooroo area. Elsewhere, the company also supported magnetotelluric (MT) surveying by the University of Adelaide and the Geological Survey of South Australia on its tenement area, which resulted in the discovery of the Jupiter MT anomaly target, a greenfield exploration play based on a prominent vertical conductive zone.