Golden Star’s Wassa Mine to produce 163,000 ounces of gold

Golden Star says the result of its feasibility study for the development of underground mine estimates the Wassa Mine will produce an average of 163,000 ounces of gold per annum over its production life, with average cash operating costs of US$780 per ounce. 
 

First production from Wassa underground is expected in early 2016 and estimated to continue into 2024.

The feasibility study was based on an updated mineral resource model completed in August 2014, which has incorporated all of the recent drilling -- including infill drilling at depth, in addition to step out fences over 600 metres to the south of the Wassa open pit.

Open pit optimisation is conducted using Whittle Optimisation software with historic operating cost data for the mining, processing, and general and administration ("G&A") costs; suitable dilution and recovery factors; stable pit stope estimates; and a gold price of US$1,200 per ounce. 

Open pit design is based on the US$1,200 per ounce Whittle shell with modifications for the current pit mining and access strategy. Mineral reserves are reported in the open pit design using a cut-off grade of 0.77 g/t Au. 

Underground stope optimisation has been carried out using a cut-off grade of 2.5 g/t Au estimated based on zero-based underground mining costs, and historic processing and G&A costs. 

The Deswick Stope Optimiser software was used incorporating cut-off grade and various mineable stope parameters such as stope height, width, footwall and hanging-wall angles, and minimum distance between parallel stopes. 

The underground mine design process utilised Surpac software and included stope design based on the optimisation results, stope access development, mine access development, and supporting infrastructure development. 

A mining schedule was developed using MineSched software and includes realistic development and stoping productivity rates based on manpower and mining equipment proposed; stope sequencing taking into account geotechnical considerations; backfill requirements, ventilation requirements; and emergency egress. 

The feasibility study mineral reserve was estimated by SRK Consulting (UK) Ltd. in accordance with guidelines set out in the Definition Standards for Mineral Resources and Mineral Reserves published by the Canadian Institute of Mining, Metallurgy and Petroleum, and as required by Canada's National Instrument.

The total proven and probable mineral reserves for Wassa Mine as of December 31, 2014 are 24.1 million tonnes at 2.04 grammes per tonne of gold for 1.6 million ounces of gold.

Total measured and indicated mineral resources as of December 31, 2014 are 49.5 million tonnes at 2.21 g/t Au for 3.5 million ounces of gold, inclusive of mineral reserves. Wassa Underground mineral reserves as of December 31, 2014 were 5.4 million tonnes at 4.26 g/t Au for 745,000 ounces of gold.

The Wassa Open Pit mineral reserves, including stockpiles, as of December 31, 2014 were 18.7 million tonnes at 1.39 g/t Au for 834,000 ounces of gold. Inferred Mineral Resources as of December 31, 2014 were 11.6 million tonnes at 3.79 g/t Au for 1.4 million ounces of gold. Pre-production incremental capital expenditure for Wassa Underground estimated at US$39million. 

Sam Coetzer, President and CEO of Golden Star commented:"We are excited to announce this positive Feasibility Study on the combined existing Wassa Open Pit operation and the Wassa Underground extension. 

“The strong rate of return on investment suggested by the study validates the preliminary economic assessment of Wassa Underground published in 2014, and is a confirmation of the decisions made for the expenditures on drilling and these studies of the last few years,” he said.

“The Wassa underground project has been underway since December 2014, when we purchased certain underground mining equipment and received the exploration decline permit. The Wassa Underground deposit remains open down plunge and has great potential to grow, and the company plans to extend development. The Wassa Mine will help transform Golden Star into a lower cost gold producer going forward." 

The Wassa Mine is located in the country’s Western Region. It has a carbon-in-leach processing plant with a rated capacity of 2.7 million tonnes per annum ("Mtpa"). Golden Star has been mining the Wassa open pits since commissioning the plant in 2005. Mining is currently at the Wassa Open Pit, which is within 500 metres of the plant. 

Drilling below the Wassa Open Pit has been ongoing since late 2011. This drilling has been successful in increasing the Wassa mineral resource. 

In 2014, SRK Consulting (UK) Ltd. was awarded the contract to prepare a feasibility study for determining the economic viability of an underground mine beneath the Wassa Open Pit.  An underground mine is envisioned in the feasibility study that will operate in conjunction with the existing open pit mine into 2024. 

The feasibility study assumes owner mining in the Wassa Open Pit and Wassa Underground. A gold price of US$1,200 per ounce was used in the economic modelling as well as the base case for the open pit and underground optimisations. 

The following table provides a breakdown of the Proven Mineral Reserves and Probable Mineral Reserves at the Wassa Mine as at December 31, 2014. 

Open Pit Mining 

Golden Star has been mining the Wassa open pits since 2005. Prior to 2013, mining was in a number of smaller satellite pits which were combined into a single large Wassa Open Pit in late 2013 allowing for operational efficiencies and cost savings. 

Open pit mining is expected to continue in the Wassa Open Pit area at a total material mined rate of approximately 1.2 million tonnes per month until 2021, when the strip ratio is expected to start decreasing. 

“On average, we anticipate that the Wassa Open Pit will produce approximately 2.0 Mtpa of ore feed, with the balance of the total plant capacity of 2.7 Mtpa being supplied by Wassa Underground.” 

Underground Mining 

Access development to the underground stoping areas will be via a twin decline system from the north east wall of the current Wassa Open Pit. 

The twin decline system will enable efficient ventilation during the early stages of the underground life and will remove the requirement for a raisebore ventilation raise and escape way close to the decline’s start. The main decline will be 5.8 metres high and 5.2 metres wide, and developed using standard trackless mechanised mining methods. 

 

The upper stopes will be mined using longitudinal longhole open stoping with waste rock fill. This will enable efficient early production before a cemented rock fill preparation and delivery system is installed. The Wassa Open Pit will eventually mine down to the top of these upper stopes, but only toward the end of mine’s the life. 

In the deeper, wider areas of the deposit a transverse longhole open stoping method will be used. A primary-secondary mining sequence will be implemented with the primary stopes filled with cemented rock fill and the secondary stopes with waste rock fill. The overall stoping sequence will be bottom-up to reduce the incidence of sill pillar development. 

New surface infrastructure to support the underground mining will be constructed including electrical power supply from the grid with backup gen-set support, and surface mechanical and electrical workshops. 

At steady-state production, the Wassa Underground is expected to produce an average of approximately 2000 tonnes per day across the mine’s life.

The Wassa processing plant was constructed in 2005 and is currently operating at its rated capacity of 2.7 Mtpa. The plant is 500 metres from the current Wassa Open Pit mining operations. Processing currently includes a four-stage crushing circuit, grinding, gravity recovery, carbon in leach circuits and a thickener. 

A final recovery circuit using electro-winning is also in place along with associated secure gold room facilities. Average metallurgical recovery in fresh ore is currently 93%, and future recovery from combined Wassa Open Pit and Wassa Underground operations is estimated to be the same. 

The majority of underground equipment for developing the exploration decline was ordered in late 2014 and delivery is expected over the next three months. An owner-operated team has been assembled and is currently being formed at Wassa. 

The starter-pit mining that will host the two portals has been completed, and the preparations that will form the platform and sumps for the declines have been established. 

The Wassa Mine has received the necessary permits to commence with the exploration decline. The Wassa Open Pit mine is now fully established as a single large pit that will operate separately from the two declines, resulting in little impact of one on the other. 

Management believes that with additional drilling from underground there is an opportunity to, firstly, optimise the mine plan; and secondly, potentially add more ounces to the resource base. 

However, there is no certainty that additional drilling will result in all or any such ounces being included in a mine plan.