Plant construction – up-to-date progress report

The refurbishment of Maco’s existing 500 t/d processing plant (Phase 1) was completed towards the end of 2006 and the plant was progressively commissioned from Q1, 2007.   The pilot plant processes development ore that would otherwise need to be stockpiled and is likely to continue operating on this ore and some trial stoping ore until the end of 2008.

The pilot plant allows the batch treatment of ore with variable grade and variable concentrations of base metals, which helps us to identify the appropriate metallurgical treatment route.  Off-site testing has established a very promising future for installing flotation up front to reduce overall reagent cost, increase gold recovery and produce saleable copper and zinc concentrates.

Experience during processing in 2007 and early 2008 confirmed that the 500 t/d plant would be capable of processing up to 700 t/d with good recoveries.  This initial expansion to allow this rate of 700t/d to be sustained required only minor capital expenditure.

Further expansion would upgrade the plant production to between 1,000 and 1,500 t/d.  This will principally involve an expansion to the crushing and grinding area. When the studies on the flotation are completed, the decision can be made to either expand the current trial flotation area or to increase the CIL capacity.

During the last quarter of 2007, the design of the new tailings management facility was completed and work on the facility commenced.  The first phase of construction was completed in Q2 2008 and the new  facility can provide capacity for several years’ production. The design of the facility enables subsequent upgrades to be performed in house with the use of mine waste and low-permeability material from on site.

In 2007, a second MPSA was granted, which covers the western area of the project and includes several known porphyry-copper-gold-bearing stocks.  The 2007 exploration focused on providing infill drilling to better define the known and most accessible resources of the high-grade gold veins, with a lesser emphasis on drilling for extensions.  The extension and interpretation of the high-grade gold veins has been mainly through surface mapping and review of historical data.

Surface drilling in 2007 also looked at areas of copper porphyry associated with higher-grade gold veins, but this work was put on hold as the potential scale of the copper porphyry began to attract the attention of possible exploration partners. A desk study is currently being performed on the copper porphyry and involves reviewing records from previous open pit mining and drillholes.