Mandalay Resources

  • Operations

Costerfield Mine

Property At A Glance

Location
Victoria, Australia
Land Package
1,293 hectares
Mining Method
Long-hole stoping with cemented rock fill
Product
Gold and Antimony
2020 Production
44,958 gold ounce & 3,903 antimony tonnes
Life of Mine
3 – 4 years
Processing Capacity
150,000 tonnes per annum

The Costerfield operation is located in Victoria, Australia, within the Costerfield mining district, approximately 10 km northeast of the town of Heathcote, Victoria. Purchased in 2009, Mandalay Resources immediately restarted capital development and mining. By 2013, through extensive improvements and investments in mining and processing methods, the processing plant's capacity was expanded to approximately 13,000 tonnes per month from 5,000.

The Augusta mine has been operational since 2006 and was the sole ore source for the Brunswick processing plant until December 2013, when ore production started from the Cuffley deposit located approximately 500 m to the north of the Augusta mine workings. The Brunswick deposit is being mined in conjunction with the Youle deposit, which produced its first ore in August 2019. Mandalay Resources expects Youle to be the sole ore source by the third quarter of 2020.

The mining method employed is long-hole stoping with cemented rock fill. Ore is accessed by a primary spiral ramp. Level spacing is at 10 m centers and horizontal development is advanced in a minimum of 1.8 m wide drives in both directions of the deposit. Levels are then mined out on retreat with long hole stopes drilled to a minimum width of approximately 1.5 m. The stopes are subsequently backfilled with cemented rock fill to supply stability, reduce dilution, and allow for mining above and below developed levels.

Ore is trucked on the surface from the Augusta mine portal to the Brunswick processing plant, where it is stockpiled and blended into the processing circuit. Costerfield is currently planning a second mine portal at Brunswick. The circuit includes primary mobile crusher, primary and secondary ball mills, rougher, scavenger, cleaner flotation, gravity circuit, and filtering. Gravity gold concentrate is sold to a refinery in Melbourne, Victoria, and gold-antimony flotation concentrate is trucked to the port of Melbourne and shipped to a smelter in China.

2021 Outlook

PRODUCTION
Gold (oz)
44,000 – 49,000
Antimony (t)
2,700 – 3,000
Gold Equivalent (oz)(1)
53,000 – 60,000
Cash Costs ($USD/oz)(2)
$675 – $825
All-in sustaining Costs ($USD/oz)(2,3)
$950 – $1,100
Capital Expenditures ($USDM)(4)
$16M – $20M
  • Notes
    • Assumes metal prices of: $1,860/oz, Sb $6,000/t. 
    • Cash and all-in sustaining costs are a non-IFRS measure
    • Capital expenditures includes exploration

2020 Performance

PRODUCTION
Gold (oz)
44,958
Antimony (t)
3,903
Gold Equivalent (oz)
58,148
Cash Costs ($USD/oz)
-
All-in sustaining cost ($USD/oz)
-
Capital Expenditures ($USDM)
-

Geology and Mineralization

The Costerfield gold-antimony vein district, of which the Augusta Lodes are part, is located on the northern end of the Darraweit Guim Province. Stratigraphy in this area comprises a thick sequence of Lower Silurian to Lower Devonian shelf and flysch sedimentary rocks, dominated by turbiditic siltstone, with minor sandstone and argillite. These rocks form the Murrindindi Supergroup. At the base of the Supergroup is the Costerfield Formation, which is conformably overlain by the Wappentake (sandstone/siltstone) and Dargile (mudstone) Formations, the McIvor Sandstone and the Mount Ida Formation (sandstone/mudstone).

The north-trending Heathcote-Mt William fault system marks the western boundary of the Melbourne Trough in the Costerfield area.

The gold-antimony veins in the Costerfield district are hosted within the Silurian Costerfield Siltstone unit. Within the district, four north-northwest – trending zones of mineralization have been identified. They are, from the west:

  • Antimony Creek Zone, approximately 6.5 km southwest of Costerfield, on the outer western flank of the Costerfield Dome;
  • Western Zone, approximately 1.5 km west of Costerfield, on the western flank of the Costerfield Dome;
  • Costerfield Zone, near the crest of the dome, centred on the Costerfield township and hosting the major producing mines and deposits; and
  • Robinsons – Browns (R-B) Zone, 2 km east of Costerfield (see Figure below).

  • Read more on Geology and Mineralization

    Veins at Costerfield typically comprise quartz (laminated to brecciated) and sulphides. The dominant sulphide mineral is stibnite (Sb2S3). In addition to stibnite, arsenopyrite and pyrite occur in minor amounts.

    The veins occur within discrete shear systems. The following paragenesis has been interpreted:

    • sericitization of host rock sediments with minor pyrite deposition;
    • faulting with associated open-space deposition of quartz, locally with coarse gold, and partial replacement of pyrite by auriferous arsenopyrite – only minor replacement of sericite-altered host rock by quartz occurs, with some remobilization of sericite into convoluted cross-cutting veinlets;
    • open-space deposition of carbonate in quartz vugs;
    • influx of Sb-rich solutions, resulting in massive stibnite infill and replacement of brecciated quartz-carbonate veins. The massive stibnite contains finely-disseminated Au; and
    • re-crystallization / annealing of stibnite.

    Ore shoots in the veins are typically 0.25 – 1.0 m thick and extend for 200 m or more along strike. They are typically displaced by flat faults so that they appear flat-bottomed. However, as with the Cuffley Lode, the Company is having success finding the offset parts of ore shoots below the flat faults; the deepest intercept in the district, approximately 500 m below surface in the Cuffley Lode, is also one of the highest-grade intercepts.

    The Brunswick vein lies approximately 600 m northwest of the northernmost point of the Cuffley Lode.  The lode is sub-vertical and occurs over a strike length of approximately 450 m, with a down-dip extent of approximately 200 m and an average true thickness of approximately 1.28 m. Exploration drilling has identified mineralization to the south and at depth below the known Brunswick Lode. Mineralization is broken into two zones of mineralization below the Brunswick Lode, called the P-K domain and Brunswick Deeps. The P-K domain is capped by the shallow west-dipping Penguin Fault, and extends to the Kiwi Fault. The Brunswick Deeps zone is defined by the west-dipping Kiwi Fault and Adder Fault. Similar in nature to Cuffley and N-Lodes, the mineralization in the two domains is generally confined to sub-vertical quartz–stibnite veins.

    The Youle deposit extends below the historical Costerfield, Minerva and Bombay group of mines located approximately 1.2 km northeast of Brunswick. Mineralization was identified in 2011, in drill hole MB012, which struck the down-dip continuation of the vertical Kendall Lode, offset westward over the west-dipping No. 3 thrust fault. In 2016, drill hole BC006W1 revealed the existence of a high-grade north–northwest striking, west-dipping lode structure, Youle. The Youle Lode dips at a shallower angle to the mineralized lodes in Augusta and Cuffley and has been identified as the down-dip continuation of the vertical Kendall Lode offset westward over the west-dipping No.5 thrust fault.

    Youle has thus far demonstrated consistent structural and grade continuity over much of its extent. The Youle Lode has a strike length of 600 m (width of 150 m) and ranges in true thickness between 0.16 m and 1.37 m.  Similar to the Augusta and Brunswick Lodes, mineralization is confined to quartz‑stibnite veins.

Exploration

Exploration also involved carrying out infill and extension drilling of the Brunswick and Youle resources while also increasing in-mine resources through opportunistic drilling projects. The Youle resource drilling has also informed the decision to mine the Youle Lode. Capital development commenced on the Youle Lode in 2018, from the Brunswick Lode workings. In August 2019, Mandalay Resources commenced on-vein development of the Youle vein, which lies approximately 800 metres north of the Brunswick lode. With the ore body accessed, Mandalay Resources initiated its first stope in the final weeks of 2019 and expects a ramp-up of development and stoping over the next 12 to 18 months.

In 2019 the goals achieved included:

  • Commencement of mining to the Youle vein in August 2019.
  • Initiation of Youle extension program, aimed at extending the Youle resource to the north and at depth.
  •  Expanding and increasing the existing Indicated Resource of the Youle vein.
  •  Regional target generation was completed by conducting extensive surface mapping, drillhole database integration, soil geochemistry and evaluation of geophysical data. This work had aided in the generation of a three dimensional (Leapfrog based) integrated structural and geological model of the Costerfield region.
  • Expanding the orebody knowledge and Resource tonnage in the near mine environment, in particular extension and infill in the Brunswick ore system.

Reserves and Resources

Costerfield Mineral Reserves 2020

  Tonnes (kt) Au Grade (g/t) Sb Grade (%) Cont. Au (koz) Cont. Sb (kt)
Proven Underground 206 15.3 5.7 102 11.8
Proven Stockpile 16 14.8 6.1 8 1.0
Probable 394 11.5 2.3 145 9.0
Proven + Probable 616 12.8 3.5 255 21.7
  • Notes
    • Mineral Reserve estimated as of December 31, 2020 and depleted for production through to December 31, 2020.
    • Tonnes are rounded to the nearest thousand; contained gold (oz) is rounded to the nearest thousand; contained antimony (t) rounded to nearest hundred.
    • Totals may appear different from the sum of their components due to rounding.
    • Lodes have been diluted to a minimum mining width of 1.5 m for stoping and 1.8 m for ore development. 
    • A 4.0 g/t AuEq cut-off grade is applied.
    • Commodity prices applied are gold price of USD1,500/oz, antimony price of USD7,000/t and exchange rate USD:AUD of 0.70.
    • The (AuEq) is calculated using the formula: AuEq = Au g/t + 1.03 * Sb %
    • The Mineral Reserve is a subset, a Measured and Indicated only Schedule, of a Life of Mine Plan that includes mining of Measured, Indicated and Inferred Resources.
    • The Mineral Reserve Estimate was prepared by Dylan Goldhahn, AAusIMM under the direction of Daniel Fitzpatrick, MAusIMM, who are both full time employees of Mandalay Resources. The Mineral Reserve estimate was independently verified by Aaron Spong MAusIMM CP (Min) who is a full time employee of Mining Plus. Mr Spong fulfils the requirements to be a "Qualified Person" for the purposes of NI 43-101, and is the Qualified Person under NI 43-101 for the Mineral Reserve. 

Costerfield Mineral Resources Inclusive of Mineral Reserves 2020

  Tonnes (kt) Au Grade (g/t) Sb Grade (%) Cont. Au (koz) Cont. Sb (kt)
Measured Underground 344 14.1 5.7 156 19.6
Measured Stockpile 16 14.8 6.1 8 1.0
Indicated 798 8.5 2.4 218 18.8
Measured + Indicated 1,158 10.2 3.4 381 39.3
Inferred 473 5.8 1.3 89 6.0
  • Notes
    • Mineral Resources estimated as of December 31, 2020 with depletion through to this date.
    • Mineral Resources stated according to CIM guidelines and include Mineral Reserves.
    • Tonnes are rounded to the nearest thousand; contained gold (oz) is rounded to the nearest thousand; contained antimony (t) is rounded to nearest hundred.
    • Totals may appear different from the sum of their components due to rounding.
    • A 3.0 g/t AuEq cut-off grade over a minimum mining width of 1.2 m is applied where AuEq is calculated at a gold price of $1,700/oz, and an antimony price of $8,000/t.
    • The (AuEq) is calculated using the formula: AuEq = Au g/t + 1.50 * Sb %
    • Geological modelling, sample compositing and Mineral Resource Estimation for updated models was performed by Joshua Greene, MAusIMM, a full-time employee of Mandalay Resources. 
    • The Mineral Resource Estimate was independently reviewed and verified by Dr Andrew Fowler MAusIMM CP (Geo), a full time employee of Mining Plus. Dr Fowler fulfils the requirements to be a "Qualified Person" for the purposes of NI 43-101, and is the Qualified Person under NI 43-101 for the Mineral Resource. 

Technical Reports

2021 NI 43-101
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2020 NI 43-101
View PDF

Qualified Person

Chris Davis, Vice President of Operational Geology and Exploration at Mandalay Resources, is a Charted Professional of the Australian Institute of Mining and Metallurgy (MAusIMM CP(Geo)), and a Qualified Person as defined by NI 43-101.

The Mineral Resource estimate was carried out under the supervision of Danny Kentwell, FAusIMM, an employee of SRK Consulting and independent of Mandalay. He is a Qualified Person for the purpose of National Instrument 43-101. The Mineral Reserve estimate was carried out under the supervision of Anne-Marie Ebbels, MAusIMM CP(Mining), an employee of SRK Consulting and independent of Mandalay. She is a Qualified Person for the purposes of NI 43-101.

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