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25/09 - Majors Creek scoping study

Majors Creek scoping study

25 September 2009 | by Michael Mills

Cortona Resources has completed a positive scoping study for what it calls a potential $30 million underground mine development on the Dargues Reef Main Lode.

Located 60km east of Canberra in New South Wales, Dargues Reef is part of CortonaÔÇÖs 100%-owned Majors Creek Gold Project.

The study estimated production for the operation is 188,000 ounces, over an initial mine life of 4.5 years with operating costs at $470 per ounce.

ÔÇ£Cortona has taken a significant step towards joining the ranks of Australian gold producers,ÔÇØ Cortona managing director Peter van der Borgh said.

ÔÇ£The results of the scoping study indicate that Dargues Reef has the potential to be a highly profitable gold mine with plenty of upside.ÔÇØ

According to the company, the study confirmed the development is technically and economically viable, using a cut-off grade of 3.5g per tonne and assuming 10% mining dilution and an average 95% gold recovery.

Annualised production would be in the order of 40,000 to 50,000 ounces with an estimated pre-production capital cost of approximately $30 million.

This initial mine development would deliver an estimated $68.4 million pre-tax profit over the initial lifespan, generating a 68% return based on the $1,150 per ounce gold price, the company said.

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