Costerfield

Click on the links below to view the following:

Exploration News | Reserves and Resources |
Costerfield NI 43-101 Technical Report| Operating Statistics |
Cuffley Lode PEA| Costerfield Sustainability Report | EL5519 Proposed Workplan | Costerfield Narrow Vein Case Study (AusIMM 2016 Mine Management Conference)

Summary:
Mandalay operates the 100%-owned Costerfield gold-antimony mine in Victoria, Australia, having purchased it on December 1, 2009, from Western Coal. The Company restarted capital development and mining immediately, ramping through year-end 2010 to the planned production rate of 5,000 tonnes per month (“t/m”). Significant improvements in mining and processing methods since then has enabled production to grow to the 10,000-12,000 t/m range by early 2013, a level that has been sustainable going forward.
costerfield


In 2010 and again in 2011, the Company delineated new reserves deeper on the Augusta E and W lodes currently being mined to approximately replace depleted reserves. Also in 2011, the Cuffley lode and the deeper N lode were discovered by surface drilling.  By the end of 2011, initial high-grade Inferred Resources on these lodes were established. By mid 2013 the Inferred Resource base was extended and a substantial portion converted to Indicated Resource by infill drilling.  As well, development in the N-lode converted Resources to Reserves, extending the mine life at the 10,000-12,000 t/m production rate.

Costerfield offers current gold and antimony production, the potential for significant near-term production expansion and mine life extension in the Cuffley lode, and exposure to discovery potential for new veins in the mineral district within the 100%-owned Mandalay tenement.

Location, Property, and Permitting:
The Costerfield Project is centred on the small settlement of Costerfield in Central Victoria, Australia, located approximately 10 kilometres (“km”) northeast of Heathcote, 50 km southeast of the city of Bendigo and 100 km northwest of Melbourne, Victoria. The Costerfield tenements currently total 7,540.78 hectares (“Ha”), of which 1,219.30 Ha are held as the main mining license and the balance in two exploration licenses. The mine is fully permitted and operates year round.

Ore Deposit Geology:
Veins of the Costerfield district are hosted by Silurian Costerfield siltstone, exposed in the core of the Costerfield Anticline The anticline strikes north-south, gently bowed toward the west and domal, plunging to the north and south.

Historically, Costerfield mineralization has been mined over a length of about 8 km north to south. The Augusta lodes, the focus of current mining, occur at the southern end.  Auriferous quartz-stibnite veins strike north-northwest and dip steeply to the west or east. They occur either as discrete veins or in mineralized zones that range in thickness from a few millimeters (“mm”) up to a maximum of 4 metres (“m”). Despite their narrow width, the veins tend to be persistent along strike and down dip. Individual ore shoots have been traced over 800 m strike length and have been worked down to 300 m depth at the historic Costerfield mine. Click below to view district geology.

costerfield_district_geology_2012

History:
The Costerfield veins were discovered in the 1860’s by two prospectors named Coster and Field and together with further veins discovered in the mineral district were mined for both gold and antimony, most extensively during two periods: 1860 – 1883 and 1904 – 1925. Intermittent small scale production took place during the period 1934 – 1950.

Since 1975 the Costerfield district has undergone more extensive, modern exploration, mainly geochemical sampling of bedrock under shallow alluvial cover and drilling. This was met with early success with the discovery of the Augusta deposit in 1975. The construction of a processing plant in 1995 by AGD enabled the re-treatment of tailings and the oxide portion of the Brunswick deposit which was mined by open pit method. Resource definition drilling at Augusta resulted in the completion of a successful feasibility study and development of the Augusta underground mine in 2006, utilizing the Brunswick processing facility. The mine was shut for a few months during 2009.

Exploration and Mineral Resources and Reserves:
Mandalay immediately commenced extensional drilling of the Augusta deposit. A brownfields program was initiated in 2010. True to history, this was met with early success – a new discovery called Cuffley, located deeper under the old Allison mine about 600 metres from northwest of Augusta. Exploration began with one rig, growing the program to three diamond drill rigs through year-end 2011. Drilling has continued ever since with three to four rigs.

The drilling and resource/reserve estimation process are described in the independent technical report completed by SRK Consulting in March 2016, which was filed on this website and on the Company’s profile on SEDAR March 30, 2016 (click here to view Costerfield’s reserves and resources).

Click here for latest Costerfield exploration news.

Mining:
Costerfield currently produces ore from a single underground mine exploiting the steeply dipping Augusta E,W, and N lodes at the south end of the main Costerfield zone. Ore is accessed by a spiral 4 x 4 m decline grading 1 in 7 from the surface. Mining in the upper levels consists of extraction of remnant ore and pillars left by underground mining prior to 2009. Mining on the new levels is accomplished by cemented rock fill blast-hole stope methods at a 1.8 m minimum width.  Since mid-2013, the mine has moved from traditional 5 m levels spacing to 10 m levels spacing.

 IMG_0116 Costerfield_CRF

Processing and Sales:

Ore is trucked on the surface from the Augusta mine portal to the Brunswick plant, where it is stockpiled and blended into the crusher. The circuit includes: primary mobile crusher, primary and secondary ball mills; rougher, scavenger, cleaner flotation, and filtering. Concentrate is shipped to the port of Melbourne, from which it is shipped to smelters in China. (click here for quarterly production and sales statistics).

Costerfield Growth Projects:
In September of 2013, Mandalay completed a Preliminary Economic Analysis* (“PEA”) of the proposed mine life extension based on Mineral Resources in the Cuffley lode and N-lode that suggested a profitable 4 year mine life at the 10,000-12,000 t/m mining rate, producing about 50,000 oz of gold equivalent a year at low cash and all-in costs (click here for press release, click here to view Cuffley PEA report, filed Oct. 10, 2013).   In the third quarter of 2013, the Company began capital development toward the Cuffley lode in order to generate closely spaced mine development sampling of the lode necessary to convert Mineral Resources to Mineral Reserves.  Surface and underground drilling continues with the goal of expanding and filling in additional resources accessible with existing infrastructure.

Mandalay maintains an opportunistic approach to brownfields exploration, with a prioritized list of high potential blue-sky targets within the Costerfield tenement ready for drill testing, funded out of mine cash flow as required.

* The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA based on these Mineral Resources will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Qualified Person:
Chris Gregory, General Manager of Australasian Corporate Development and Exploration for Mandalay Resources, a Member of Australian Institute of Geoscientists (AIG) and a Qualified Person as defined in NI 43-101, supervised the scientific and technical information relating to exploration reported here and has reviewed and approved such information contained in this website.