Genesis Minerals Ltd (ASX:GMD) has commenced open pit mining operations at the Ulysses West open pit, part of the Ulysses Gold Project near Leonora in Western Australia.
The commencement of mining marks a significant milestone for Genesis, signalling the all-important transition to production and cash-flow.
Mining contractor SMS Innovative Mining Pty Ltd is providing funding to support the project, with an initial subscription of Genesis shares worth $2.5 million.
The first ore is expected to be delivered to the 3.5 million tonnes per annum Paddington Mill by mid-October under the toll milling agreement with Paddington Gold Pty Ltd.
The project is forecast to generate total estimated free cash-flow of $6 million from the initial Ulysses West operation, at a gold price of A$1750 per ounce.
This is based on the feasibility study completed in August, which was based on a probable ore reserve of 74,000 tonnes at 4.1 g/t gold for 9,700 ounces contained gold.
Drilling highlights growth potential
Sterilisation drilling currently underway on the western side of the open pit has returned shallow, high-grade intersections including 10 metres at 3.2 g/t gold from 30 metres.
Drilling will commence shortly to drill out this zone to evaluate the potential to extend the open pit to this area, following the completion of the initial 3-month mining program.
Additionally, deep drilling beneath the previously mined Ulysses pit has extended the plunge of the mineralisation by a further 60 metres down plunge to the north-west.
This drilling intersected 2 metres at 9.3 g/t gold from 152 metres and 5 metres at 2.1 g/t gold from 157 metres.
The cash-flow generated at Ulysses will support the company’s strategy to ramp-up exploration activities both at Ulysses and the Viking exploration project, located near Norseman in the Albany-Fraser Province.
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