CHICAGO -- Australia's Kingsrose Mining Ltd. said Friday it had poured the first dore bars containing a mixture of gold and silver at its Way Linggo mine on the Indonesian island of Sumatra.
The four bars weighing a total of 5.9 kilograms were poured earlier in the day and culminated 12 months of mine development and plant construction costing $12 million, executives said in a statement to the Australian Securities Exchange.
Way Linggo is described as one of the world's lowest cost gold mines and will have initial annual output of45,000 ounces of gold at a cash cost of US$147 per ounce, which executives noted is more than $1,000 per ounce under the current world gold price.
John Morris, Kingsrose executive chairman, said key factors in producing ultra-low cost gold were high ore grades and low project capital costs. "It's an old saying in mining that grade is king and Way Linggo is the latest example of how important high-grade ore is to the financial success of a mine," he said.
Way Linggo currently has 25,700 tonnes of ore stockpiled on the surface read for processing which assays 18.3 grams of gold to the tonne plus 214 grams of silver. The ore has been extracted as part of development mining and comes from a reported Australian Joint Ore Reserves Committee compliant measured and indicated resource.
Morris said the mine had incurred only minor construction delays because of wet weather and problems getting equipment being delivered to the site. "Now that we've started gold production we can steadily ramp up the initial target of 45,000 ounces a year, while also planning for future expansion," he said. "Cash flow from the mine will also enable us to expand exploration efforts in and around the mine."
Way Linggo is 85% owned by Kingsrose's Indonesian subsidiary Natarang Mining and covers 10,540 hectares. The interest was purchased early last year.
Kingsrose, based in West Perth, Western Australia, also has a current base metals project on the Italian island of Sardinia where it is working with the regional government to assess the potential for reprocessing large dumps of zinc, lead and silver tailings.
