DIO announced this morning the commencement of it's Frogs Leg feasability study, with open pit mining to commence at the end of 2002.
..........and the share price has fallen 1c so far....!
Company Announcement
Frog`s Leg Feasibility Study Commences
DIORO EXPLORATION NL 2002-06-05 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ The board of Dioro Exploration NL ("Dioro") wishes to advise that the Mungari East Joint Venture has commenced a Feasibility Study into open pit gold mining at Frog's Leg.
This study comprises a comprehensive drilling program to 'sterilise' the proposed waste-dump site, geotechnical and hydrogeological evaluations, metallurgical test work (assuming off-site ore processing), an update of the resource model with recoverable resources, final optimisation and pit design, and the completion of a 'Notice of Intent'.
The study has a substantial drilling component, with 11,000 metres of reverse circulation and aircore drilling allocated to the testing (sterilisation) of the proposed waste-dump site in a previously unexplored area west of the proposed Frog's Leg open pits, 1,000 metres of diamond drilling in 8 holes to provide geotechnical information to aid in pit design, plus a number of exploratory water bores.
The Feasibility Study is scheduled to be completed by late September 2002 at an estimated cost of $1 million (Dioro's share $490,000). Subject to completion of the Feasibility Study and process plant selection, open pit mining activities at Frog's Leg are still scheduled to commence by the end of calendar 2002.
The pre-feasibility report indicated that, subject to the off-site process plant selected, total pre-open pit mining capital costs at Frog's Leg are estimated to be less than $2 million. Dioro's share of capital costs of $2 million would be $980,000.
Based on the planned work program Dioro expects to fund its share of estimated Feasibility Study and pre-mining capital costs from its existing cash resources.
At a gold price of A$550 per ounce (current price A$575) and estimated operating and capital costs of A$270 per ounce, the pre-feasibility study estimated that the Frog's Leg open pit mining project should return net cash flows of approximately A$18 million (before tax) over an 18-month period. The underground scoping study indicated that the project would then continue as an underground mining operation for around 8 years based on current resources.
The exploration program for the second half of calendar 2002 is currently being finalised and details will be made available shortly.
D McArthur DIRECTOR
DIO Price at posting:
0.0¢ Sentiment: None Disclosure: Held