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Paddington Gold Mine (100%)                  

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Location:

Product:

Mining method:


Treatment rate:


Processing:

Began operation:

Production:

~ 40 kilometres north of Kalgoorlie, Western Australia

Gold

Current:   open cut mining
Planned: open cut and underground mining

Nominal:  3.0 Mtpa 
Actual:       3.3 Mtpa since Norton ownership

Conventional carbon-in-pulp (CIP) circuit

1985

Current:    150,000 oz pa 
Objective:  250,000 oz pa

Paddington produces gold doré bars (~75% gold) for delivery to the refinery and sale into the bullion market.

Production will lift to more than 200,000 oz pa as the Homestead underground development project comes on stream and ramps up from December 2009.

Overview

Norton acquired the Paddington Gold Mine on 25 August 2007.

The acquisition of Bellamel Mining Limited in October 2008 has enhanced the project pipeline to feed the Paddington the mill in the near and longer-term.

Reserves and Resources

The initial Paddington geological acquired by Norton database included data from ~60,000 drill holes and appraisal work undertaken over more than 25 years. The project area of 1,200 square kilometres included 69 previously drilled deposits and more than 100 known ore bodies within a 40-kilometre radius of the Paddington mill.

Norton's review of the geological database and subsequent drilling and assessment identified Mineral Resources of 5.02 M oz including Ore Reserves of 1.05 M oz as at 30 June 2008. Paddington's remaining mine-life is now well in excess of ten years. The Life of Mine Plan as at July 2008 is available by clicking on the following link. >Life of Mine Plan

The acquisition of Bellamel Mining Limited added significant gold resources. In particular, it strengthened Paddington's life of mine plan by providing early access to sources of higher-grade oxide ore. Work is underway to reassess and prove up Bellamel deposits and align their resource definition with Norton's reporting standards. Bellamel reported 2.8 M oz of JORC Code-compliant Mineral Resource as at 15 August 2008.

Recent exploration has involved drilling of the Mount Pleasant and Kalgoorlie West areas, updating the Golden Cities and Kalgoorlie West deposits, and continuing to target near mine, shallow, and oxide ore extensions to known mineralisation.

Paddington's Reserve and Resource position is being progressively updated as these assessments are completed.

Processing

The Paddington mill is a low cost mill due to its large size and high efficiency.

The plant comprises a cone crusher to crush the ore, a ball and SAG mill grinding circuit, gravity recovery and cyanide leaching. Gold is extracted from slurry in the leaching circuit and absorbed onto activated carbon. The carbon is pumped to an elution column where gold is washed into solution. The gold-bearing solution is then passed through a series of electro-winning cells that deposit the gold onto stainless steel cathodes. The cathodes are rinsed to yield a gold sludge that is dried then smelted into gold doré bars containing ~75% gold. The bars are sent to a refinery where impurities are stripped out to produce 99.99% gold bullion.

Production

Historical gold production is summarised below:


Ore treated (kt)
Grade (g/t)
Recovery (%)
Cash cost (A$ per oz)
Gold produced (koz)

1998
3,155
2.2
93
317
209
1999
2,438
2.2
94
400
162
2000
1,619
2.7
94
352
132
2001
2,689
1.8
95
376
148
2002
3,192
2.3
95
383
225
2003
3,128
3.2
94
498
308
2004
3,029
2.6
94
478
244
2005
2,834
2.6
94
576
243
2006
3,001
2.9
94
501
259
2007
3,011
2.2
94
N/A
214
2008
3,135
1.5
92*
754
126
 

* lower recover reflects the successful carbonaceous trial in October

Paddington No. 1 and No. 2 open cut pits were mined from 1985 to 2002. In 1994, mining intensity was expanded and the processing plant was upgraded to 3.0 Mtpa.

Exploration and acquisitions have underpinned the pipeline of mill feed since the original Paddington open cut was mined out in 2002. The Paddington open void cut now serves as an in-pit tailings storage facility with a capacity of over 20 years.

A merger with Delta Gold in 2001 delivered several potential sources of mill feed, for example, the Red Hill deposit which was completed in June 2007. The Mount Pleasant and Ora Banda properties were acquired from the administrator of Centaur Mining Limited and the Golden Cities property was acquired from AMX, both prior to Norton's ownership. These projects are now being developed.

Homestead development

The Company announced it had commenced development of the Homestead underground mine on 8 April 2009. click here

Homestead is expected to be producing by December 2009. It is expected to lift overall production at Paddington towards >200,000 oz pa in FY2011 and contribute approximately 30,000 oz in FY2010 and 65,000 oz in FY2011.

The estimated capital cost of $13.1M will be funded by operating cash flow and the total cash cost of production (including development capital) is estimated to be less than $600 per oz.  A contractor has been appointed for seven months of decline development.  The initial mine plan is for 101,000 oz from 428,000 tonnes of ore at 7.4 g/t. There is upside via resource development and an 8 to 10 yr underground project pipeline anticipated based on the Mount Pleasant Gold Camp.

Homestead is part of the Mount Pleasant Gold Camp, 18 kilometres from the Paddington mill. The camp encompasses several deposits to be developed in series that are expected to deliver up to 100,000 oz pa of gold for 8-10 years.

Mineralisation is hosted in quartz veins similar to those in the now depleted Quarters Mine which is 1 km to the north and in the same geological setting and which produced 339,000 oz of gold at a grade of 6.2 g/t from underground operations.

For Homestead, a JORC Code-compliant Resource of 480,000 tonnes at 12.4 g/t for 190,000 oz has been defined including an Ore Reserve of 364,000 tonnes at 8.9 g/t. The Ore Reserve is a subset of an initial mining inventory of 428,000 tonnes at 7.4 g/t. The deposit is open at depth and along strike and has a number of parallel structures that require further exploration to upgrade into a Resource.

Secondhand infrastructure has been acquired to support Homestead development. We are accessing the ore body via a straight decline off the existing Quarters open cut pit:

  • a straight decline will be cheaper than a spiral decline
  • use of Quarters' infrastructure and facilities already in place such as piping and electrics reduces project complexity and cost
  • intersecting the ore body at a lower richer level enables full scale production to be achieved earlier and for less initial investment
    the decline opens up adjacent areas for underground development.

The Tuart deposit is 400 metres away. Marlock, Golden Kilometre, Green Gums and Homestead extension deposits are nearby.



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