Genesis Minerals (ASX:GMD) has unlocked the potential for additional toll-treatment mining campaigns after increasing the resource inventory at the Ulysses Gold Project in Western Australia.
The updated resource now totals 2.8 million tonnes at an average grade of 2.3 g/t gold for 206,400 ounces of gold, which represents a 36% increase in contained ounces.
Genesis has incorporated the results of drilling completed over the past year in the updated resource, which remains open and untested at depth.
The company also carried out two limited open-pit mining campaigns at Ulysses – one in late 2016 and another recent campaign to extract high-grade material at the base of the pit.
Genesis has dispatched the ore from the recent campaign to the Paddington mill for processing under an existing toll-milling agreement.
The first payment for the ore from the current mining campaign is expected in May with the final payment due in June 2017.
These campaigns have demonstrated that Genesis can generate strong cash returns from this style of operation, utilising the proceeds to strengthen Genesis’ balance sheet.
Further open pit mining campaigns will now be evaluated and considered, as well as potential future underground mining opportunities.
Any potential future underground mining operation is likely to be undertaken via a mining partnership with an experienced contractor to minimise risk and capital requirements for Genesis.
If a suitable development pathway is identified, the company is planning to undertake a feasibility study in the second half of 2017.