Aussie miner expands exploration program in Masbate gold project

CGA Mining Ltd. of Australia is expanding its exploration program to enhance the viability and flexibility of their current operations at the Masbate gold project. The Australian miner leads the Masbate gold project through Philippine company Filminera Resources Corp.

The Perth-based firm said in a report that it has spent $9.2 million or a little over $1 million per month from mid-2011 to March 2012. Exploration expenditure is expected to increase to a range of $1.5 million to $2 million per month going forward.

As part of the exploration program, CGA plans to drill within the Pajo mineral production sharing agreement (MPSA) site “over the next 12 months.”

CGA acquired an interest in MPSA No. 219-2005-V, known as “the Pajo property,” in 2010 in joint venture with Bloomsbury Holding Limited and Philippine partners.

The Pajo property covers 786 hectares that is contiguous to the northern part of the Colorado pit on the existing Masbate gold project.

At the time of its acquisition, CGA said it increases the licensed mining area by about 53 percent and may improve efficiency in the Masbate gold project’s operations by allowing shorter hauls for waste dumping. Combined with the original Masbate gold project and the exploration area covered by EP-010-2010-V, CGA had some 18 square kilometers of highly prospective exploration area and could potentially grow the reserve and resource base of the current project.

CGA earlier reported that revenue from metal sales for March increased by $23.841 million or 61 percent from the December quarter to $63.188 million. Gold production was 77 percent higher in the March quarter as compared to the previous quarter.

“The average gold price for the March quarter also increased to $1,418 per ounce compared to $1,280 per ounce for the December quarter, with the increased proportion of sales at spot,” CGA said. Mill throughput for the quarter was 1,586,549 ton from 866,140 tons in the December quarter for total gold production of 49,202 ounces compared to 27,820 ounces in the December quarter.

Earlier this May, CGA said the Masbate gold project is seen to have higher mineral resources than first reported.

In a report distributed via e-mail and also posted on its web site, CGA said updated independent mineral resource and mineral reserve estimates as of October 31, 2011, showed that total measured and indicated mineral resources increased contained gold by 12.7 percent to 5.13 million ounces compared with 4.55 million ounces reported in the last release of an industry standard report.

Factoring in the volume already mined since the last resource estimate, this represents an increase of 1.06 million ounces of contained gold or 23.3 percent, the CGA report said.