Property At A GlanceLocationVictoria, AustraliaLand Package1,219 hectaresMining MethodLong-hole stoping with cemented rock fillProductGold and Antimony2022 Production64,659 AuEq oz (47,887 Au oz & 2,292 Sb t)Life of Mine5 yearsProcessing Capacity150,000 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.
2023 OutlookPRODUCTIONGold (oz)44,000 – 49,000Antimony (t)1,800 – 2,400Gold Equivalent (oz)(1)56,000 – 64,000Cash Costs ($USD/oz)(2)$650 – $825All-in sustaining Costs ($USD/oz)(2,3)$925 – $1,075Capital Expenditures ($USDM)(4)$20M – $24M
- Cash cost and all-in sustaining costs are non-IFRS measures.
- See “Non-IFRS Measures” in our MD&A.
- Assumes average metal prices of: Au $1,797/oz, Sb $10,805/t
- Consolidated all-in sustaining costs per Au Eq. oz includes corporate overhead spending.
2022 PerformancePRODUCTIONGold (oz)47,887Antimony (t)2,292Gold Equivalent (oz)64,659Cash Costs ($USD/oz)$624All-in sustaining cost ($USD/oz)$830Capital Expenditures ($USDM)$16.6
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.
At Costerfield during fourth quarter of 2021 the focus of exploration was to build confidence in the newly discovered Shepherd zone with the aims of building Mineral Resources and Mineral Reserves around the multiple veining horizons found earlier in the year. Additionally, drilling on the Margaret target continued though Q4 2021 with the aims of following the prospective Margaret mineralisation at depth. The Brunswick Deeps testing program was also continued through Q4 2021. Looking forward to Q1 2022 a significant number of drilling programs are designed and authorised to commence. Chiefly amongst these is to continue with the expansion of the Shepherd veining to the south and at depth. The Brunswick and Margaret Depth testing programs will also continue though Q1 whilst the Cuffley Deeps, Robinsons Testing and Youle East Testing programs will commence.
The net increase of 57,000 ounces of Au in Proven and Probable Mineral Reserves for 2021, relative to 2020, consists of the addition of 113,000 ounces of Au added by Mineral Resource conversion and addition of resources to the Youle and Shepherd ore bodies and a total of 55,000 ounces of Au depleted from the 2020 Mineral Reserves through mining production in 2021. The 2,200 tonnes of Sb net decrease in Proven and Probable Mineral Reserves consists of 3,600 tonnes of Sb added by Mineral Resources conversion and addition of Mineral Resources to Youle and Shepherd and 5,800 tonnes of Sb depleted from the 2020 Mineral Reserves through mining production in 2021. The Mineral Reserves of the Youle and Shepherd ore bodies were added at an exploration cost of $30.79 per AuEq ounce.
Mineral Reserves and Resources
Costerfield Mineral Reserves 2021
Tonnes (kt) Au Grade (g/t) Sb Grade (%) Cont. Au (koz) Cont. Sb (kt) Proven Underground 267 15.9 4.4 136 11.7 Proven Stockpile 41 10.1 3.3 14 1.4 Probable 460 10.9 1.4 162 6.5 Proven + Probable 769 12.6 2.5 312 19.6
1. Mineral Reserve estimated as of December 31, 2021, and depleted for production through to December 31, 2021.
2. Tonnes are rounded to the nearest thousand; contained Au (oz) is rounded to the nearest thousand; contained Sb (t) rounded to nearest hundred.
3. Totals may appear different from the sum of their components due to rounding.
4. Lodes have been diluted to a minimum mining width of 1.5 m for stoping and 1.8 m for ore development.
5. A 3.8 g/t AuEq cut-off grade is applied.
6. Commodity prices applied are Au price of USD1,500/oz, Sb price of USD7,500/t and exchange rate USD:AUD of 0.71.
7. The (AuEq) is calculated using the formula: AuEq = Au g/t + 1.06 * Sb %.
8. 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.
9. The Mineral Reserve Estimate was prepared by Dylan Goldhahn, AusIMM 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 FAusIMM 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 2021
Tonnes (kt) Au Grade (g/t) Sb Grade (%) Cont. Au (koz) Cont. Sb (kt) Measured Underground 408 15.4 5.0 202 20.4 Measured Stockpile 41 10.1 3.3 14 1.4 Indicated 938 8.6 1.9 259 17.5 Measured + Indicated 1,387 10.6 2.8 474 39.3 Inferred 532 6.7 1.3 114 6.7
1. The Mineral Resource is estimated as of December 31, 2021 with depletion through to this date.
2. The Mineral Resource is stated according to CIM guidelines and include Mineral Reserves.
3. Tonnes are rounded to the nearest thousand; contained Au (oz) is rounded to the nearest thousand; contained Sb (t) is rounded to nearest hundred.
4. Totals may appear different from the sum of their components due to rounding.
5. 3.0 g/t AuEq cut-off grade over a minimum mining width of 1.2 m is applied where AuEq is calculated using the formula: AuEq = Au g/t + 1.58 * Sb %
6. The AuEq factor of 1.58 is calculated at a Au price of $1,700/oz, an Sb price of $8,500/t, and 2021 total year metal recoveries of 93% for Au and 95% for Sb.
7. Veins were diluted to a minimum mining width of 1.2m before applying the cut-off grade and peripheral mineralisation far from current development was excluded to comply with the Reasonable Prospects for Eventual Economic Extraction (RPEEE) criteria.
8. The Stockpile Mineral Resource is estimated based upon surveyed volumes supplemented by production data.
9. Geological modelling, sample compositing and Mineral Resource Estimation for updated models was performed by Joshua Greene, MAusIMM, a full-time employee of Mandalay Resources.
10. 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 Estimate.
Chris Davis, Vice President of Operational Geology and Exploration at Mandalay Resources, is a Chartered Professional of the Australasian Institute of Mining and Metallurgy (MAusIMM CP(Geo)), and a Qualified Person as defined by NI 43-101. He has reviewed and approved the technical and scientific information provided in this release.
The Mineral Resource Estimate was independently reviewed and verified by Dr Andrew Fowler MAusIMM CP (Geo), a full-time employee of Mining Plus. He is a Qualified Person for the purposes of National Instrument 43-101. The Mineral Reserve estimate was independently verified by Aaron Spong MAusIMM CP (Min) who is a full-time employee of Mining Plus. He is a Qualified Person for the purposes of National Instrument 43-101.