Gold

GME and its subsidiary Golden Cliffs NL own a number of prospective gold projects in the Leonora–Laverton region which have potential to provide near term cash flow. The Company’s strategy is to continue to explore and evaluate these assets with targeted work programs that focus on quick start-up, high-grade, mine and haul projects. Devon Gold mining is expected to be completed in the September 2016 quarter. The company has recently expanded its exposure to gold assets in the North-Eastern Goldfields via proposed joint venture with Zeta Resources on the Murrin Murrin Project.

Devon Gold Project

That strategy has been achieved at the Devon Gold Project, trial mining successfully completed in May/June 2015 yielding 2,195 fine ounces gold.

29 June 2015 JORC Mineral Resource update of 475,000 tonnes at 2.98g/t Au for 45,500 ounces of gold at Devon Deposit announced. With 72% of ounces in Measured and Indicated categories, and robust high grade mineralisation within the resource. Potential for further upgrade exists, with only minimal drill testing below 100m vertical depth from surface.

After completing a Trial pit at the company's 100% owned Devon Gold Mine, expansion of the mine design was approved in the March 2016 quarter, with the first batch or ore processed 11th April.

Steady progress has been made over the June 2016 quarter. To date, approximately 75% of the total volume (450,000 bank cubic metres - inclusive of waste & ore) has now been mined. Four batches of ore totalling 28,100 wet tonnes (42% of total ore) have been processed through the Saracen’s Carosue Dam processing facility.

Sale of gold ore from Batches 1 through 4 have been finalised. The gold price applicable to respective ore sales is determined by the monthly average price as set by the DMP mineral royalties division. The average gold price for the months of April and May were AUD$1620.46 and AUD$1721.36 respectively. Funds from these sales have been received and are included in the financial results reported for the quarter and reflect the positive influence that the Devon mining operation is having on the Company.

By the end of the June quarter significant waste material had been removed from the western wall of the pit down to the main pit floor currently at 23.5 metres below surface (i.e. 374 mRL). For the remainder of the campaign at Devon the strip ratio has reduced significantly allowing access to the remaining higher grade ore and the further development of the pit to its maximum depth of 45 metres.

At the end of June approximately 55,000 BCM’s (roughly 148,570 tonnes) in total remain to be mined from the pit and includes a forecasted 25,000 wet tonnes of high grade ore averaging 6.3 g/t.

Mining of the Devon pit is expected to be completed by mid August with all ore planned to be processed by the end of the September Quarter.

At the end of the quarter four batches of ore have been processed at Saracen’s Carosue Dam processing plant. A total of 26,300 dry tonnes have been treated – the final agreed tonnes and grade of the individual batches are listed below: -

Processing recoveries, determined from metallurgical testwork minus a processor’s deduction, for ore batches have been extremely good ranging from 90.1 to 94.2%.

Murrin Murrin Project

In July 2016 the company announced they had executed a binding term sheet for the purpose of entering into a Joint Venture Agreement with Zeta Resources Ltd (Zeta, ASX:ZER) on the Murrin Murrin Project located within the highly prospective North-Eastern Goldfields of Western Australia.

Highlights include:

About the Murrin Murrin Project

The project comprises 16 largely contiguous tenements covering 50.3 km² within the North-eastern Goldfields of WA, a district of excellent infrastructure and favourable gold, nickel and base metal prospectivity. The tenure lies just north of GME’s Mount Kilkenny and abuts its Hepi Nickel Laterite Projects. Dacian Gold’s Mt Morgans Project, St Barbara’s Sons of Gwalia and Goldfields’ Granny Smith gold plants all lie within a 30 to 55 km radius of the Murrin Murrin Project area.

Sporadic gold and base metal exploration and mining has been undertaken at Murrin Murrin since the late 1800s. Historical underground production from the Murrin Murrin mining centre includes 259Kt @ 13.8 g/t Au (115,628 oz) and 1,949t @ 16.5% Cu concentrate. Relatively recent gold mining was completed by Dominion Mining in 1995 when 126,531 tonnes at an average recovered grade of 3.5 g/t for 14,157 ounces was extracted from two shallow pits at the Malcolm and Challenger deposits. (KMR prospectus, 2011).

A JORC 2012 indicated Mineral Resources Estimate of 547Kt @ 3.12 g/t Au for 54,875 ounces has been delineated immediately beneath and along strike of the Malcolm-Challenger shallow open cut pits (Refer - Zeta ASX announcement, 22nd January 2014). Drilling by KMR to define this resource returned the following high-grade gold intercepts (Refer - KMR ASX announcement 17th December 2012 & Zeta June 2013 ASX Quarterly Activity Report):

Drill Hole ID Down Hole Drill Intercept
12MMRC072 13 metres @ 12.6 g/t Au from 52 metres
12MMRC068 7 metres @ 12.7g/t Au from 63 metres
12MMRC063 21 metres @ 4.2g/t Au from 39 metres
12MMRC064 13 metres @ 4.2g/t Au from 13 metres
13MMRC006 3 metres @ 33.23 g/t Au from 100 metres

While outside of the Malcolm-Challenger resource area has not been subjected to a modern concerted exploration effort, historical exploration has defined numerous gold and base metal prospects/targets. Highlights from historical drilling include the following (Refer – Indpendent Geologist Report KMR Prospectus 2011):

Gold Prospect Selected Drill Intersections
Princess Alix 10m at 4.38 g/t Au
Bound to Win 7m at 1.34 g/t Au
Vindicator 8m at 1.44 g/t Au
Avenger 8m at 1.36 g/t Au
Eastern Gabbro 5m at 2.55 g/t Au
7m at 4.07 g/t Au
Alix Junior 3m at 4.22 g/t Au
Elbe 8m at 2.77 g/t Au
4m at 4.38 g/t Au
Hill End 4m at 8.33 g/t Au
8m at 4.9 g/t Au
12m at 4.08 g/t Au
8m at 10.5 g/t Au
Aurther Rymer 3m at 4.75 g/t Au
2m at 10.09 g/t Au
Base Metal Prospect Selected Drill Intersections
Nangaroo 6m at 14.7% Cu, 9.5% Zn & 18.5 g/t Ag
3.9m at 11.2% Cu, 3.5% Zn & 0.5 g/t Ag
9.7m at 6.0% Cu, 0.01% Zn & 51.0 g/t Ag