RMX Flags Gold Extension at Lobo
Red Mountain Mining (ASX:RMX) believes it has an extension on its hands at its flagship Lobo gold project in the Philippines.
RMX made the prediction after unveiling recent rock chip sampling results to its investors on 8 September, saying promising chips had the potential to extend the strike zone by about 40m.
Grades from rock chip sampling beyond the South West Breccia Main Lode project area included 7m @ 20.5% gold, 7m @ 11.5g/t Au, 1m @ 50.9 g/t Au, and even one hit of 151.6 g/t Au.
RMX said that the rock samples had effectively defined a 40m strike length extension which has not yet been drilled within the top 50m of surface.
“These exceptionally high-grade trenching results have defined a very attractive drilling target, to potentially extend the SWB resource,” managing director Jon Dugdale said.
The potential extension will be tested by the drillbit as soon as it’s done with a similar test pitting program at its secondary Taamarind target.
RMX project in focus
The Lobo project is part of the broader Batangas gold project in the Philippines, situated on the tip of the main island of the Philippines – Luzon – about 120km south of the capital Manila.
Total mineral resources at the project include an indicated resource of 2.97 million tonnes @ 2.4 g/t Au for 227,000 ounces and inferred resources of 3.22Mt @ 2.1g/t for 218,000oz.
The Lobo area features 82,000 oz. indicated and inferred (604,000 tonnes @ 4.2 g/t) – this includes the South West Breccia (SWB) Mine, average open pit mining grade 6.8 g/t, and will be RMX’s first start up mine.
Over to the right of the map, within the Archangel area, sits the Kay Tanda planned mine area – gold is planned to be produced from there from Year 3 of the Project – it currently holds 363,000 oz.
RMX’s plan is to mine 100,000oz of high grade gold over the initial five years at Batangas and use the cash flow to fund expansion and exploration.
Free cash flow from production of the first 100,000 ounces at the Project level is expected to be $45M – recently getting a boost by 50% due to increases in the Australian dollar gold price and a drop in the fuel price in the Philippines.
Capex is forecast to be $15M – set out in a completed Scoping Study and Feasibility Study update – which set operating costs at $US703 ($A1010) an ounce.