Pernatty decline

The South Kalgoorlie Operation (SKO) in the Eastern Goldfields Region of Western Australia, of which the Pernatty Decline is a part of, is wholly owned by global mining company, Alacer Gold Corporation, that has its headquarters in Colorado USA.

Whilst the Pernatty Decline was contributing to the overall productivity of the South Kalgoorlie Operation, gold prices were rather buoyant as investors were placing their money in gold rather than other riskier share holdings, that were negatively effected by the Global Financial Crisis (GFC), that took the world by surprise in 2009. The longer the uncertainties of the economic conditions surrounding the world continued the more stable were gold prices.

Over recent months uncertainty has crept back into whether high gold prices can be retained as the USA, and Japan economies are once again beginning to grow. The Pernatty Decline was an early casualty of this changing outlook although gold mining has continued at the Pernatty open pit that is still being mined by means of excavators and truck haulage.

The South Kalgoorlie Operation, of which the Pernatty Gold deposit was a major contributor, was purchased by Alacer Gold when it merged with Avoca Resources in 2011. Avoca Resources having earlier acquiring the operation from Dioro Exploration who had, in turn, purchased it from Harmony Gold in 2007. The South Kalgoorlie Operation contains numerous gold deposits centred around the Jubilee Gold Processing Plant, a conventional crushing, grinding, CIP and leach circuit that is capable of treating 1.2 million tonnes of gold ore annually.

The Pernatty Decline is located 15 kilometres south of the Eastern Goldfields mining centre of Kalgoorlie in Western Australia and although it is not currently being worked, the open pit at the South Kalgoorlie Operation still produced 40,406 ounces of gold in 2012. Probable and Proven Reserves, at the end of last year (2012), stood at 13.9 million tonnes of gold bearing ore grading at 1.5 grams a tonne which will return 0.64 million ounces. Measured and Indicated Resources at the mine, at the same time, stood at 50 million tonnes with a grade of 2.1 grams a tonne. This would be expected to show a return of 3.3 million ounces of gold.

Alacer Gold Corporation, is not immune to the recent fall in gold prices throughout the world. To combat this they are taking on a series of cost cutting directives across al their operations while at the same time looking to increase production levels. These moves, along with the mining of a higher grade ore is expected to ride out the low gold price period. This means the South Kalgoorlie Operations Expansion Project (SKOEP) will not be going ahead as planned in 2013 despite the large area of gold mineralisation in the company's South Kalgoorlie tenements.

By industry standards, the South Kalgoorlie Operation has a large resource base that has 117 tenements containing 25 separate deposits covering an area of 1,232 square kilometres. The company has also identified 300 additional exploration targets that are currently being evaluated. Alacer remains convinced that continuing exploration will provide results necessary to justify the planned expansion that is currently suspended being resumed again in the future.
†