Carnaby Resources says the decision on whether to mine Tick Hill, 110km south-east of Mount Isa, is a step closer after compelling recent drill results.
Recent reverse circulation drill results confirmed that the Tick Hill main lode extended 20m into the northern wall of the existing open pit at the former gold mine, the company said.
Results included 1m grading at 12.45 g/t gold, 1m at 7.95 g/t gold, and 3m at 2.30 g/t gold.
“Confirmation of the extension of the main high-grade lode into the north wall of the open pit has further de-risked the open pit cutback, with a decision to mine or divest one step closer,” managing director Rob Watkins said.
Carnaby said the north pit wall extension formed part of the mineral inventory for the Tick Hill open pit cutback project under consideration.
The Tick Hill open pit cutback is forecast to produce 63,300 tonnes of ore grading at 6.1 g/t for 12,500oz of gold, generating pre-tax cashflows of about $15 million at AISC of $1190/oz.
Carnaby is actively pursuing development options for the cutback and is completing additional permitting requirements.
The company said a decision to mine or agreement to divest part or all of the project was continuing to be evaluated and discussed with third parties.
Tailings stockpiles at the site are already being exploited through a deal Carnaby reached with Lorena gold operators BIM Metals last year.
In an update to the ASX, Carnaby reported that funds from the sale
of the Tick Hill tailings project were continuing to build, with $3.25 million cash received to date and a further $750,000 to be received on March 4 due to full-scale production from the tailings officially commencing on January 19. Carnaby will also start receiving proceeds from a 5 per cent royalty on all the tailings processed from Tick Hill, which is forecast to be approximately $2 million.