Re: HEG-still flying under the radar
checkout the red bits not bad for a little company out in the boondocks that never gets noticed...tb
In fact Hargraves could be quite substantial. We’ve already
identified mineralisation extending over 1,000 metres and it’s running at depth
of about 400 metres, which is the extent of our drilling so far. The structure is
in the order of 30-40 metres wide and within that envelope there are a number
of high grade zones. They’ve been identified, but require further drilling. In
addition to the main Hargraves target at Big Nugget Hill, we’ve also identified
parallel zones that we’ve yet to drill.
We think we have a big future, but at the
moment we’re just opening up the first zones at Hawkins Hill and Reward.
corporatefile.com.au
To what extent do the recent results make you lean towards a larger, lower
grade operation or a smaller, but higher grade commercial operation? What is
the potential size of the operation?
MD Philip Bruce
The current market influenced us to move to a smaller high grade commercial
operation at the Reward area because that is more self funding than the larger
scale option. We have been working towards this over the last few months and
we’re now at the point that we have a small, high grade operation. We are
converting the original batch plant to a more continuous processing operation
and increasing the scope of the underground from the initial two levels on the
Paxton’s vein sets to opening up to 10 levels.
The grades that we’re producing out of Reward are averaging around an ounce
per tonne, but have been up to three or four ounces per tonne. I expect
production of 50 tonnes per day will be maintained in the near future, but when
we increase throughput it will provide us with improved productivity and
operating costs and a scale of operation that will be quite profitable.
The next step is identifying the size of the resource that would allow a more
productive operation, but that will require a few months of data gathering.
It’s looking like we can maintain a relatively small but profitable operation,
however, with the recent work on the project, it looks like it would certainly be
productive on a much larger scale and the resource seems to be bigger than
what we had originally anticipated. The contract with Downer EDI will help
us better understand optimisation options and that includes being productive at
a much larger scale if the resource is bigger than what we had originally
anticipated.
corporatefile.com.au
Has the recent financial turmoil impacted your business and can you comment
about your funding for exploration, and the next milestone for HEG?
MD Philip Bruce
The financial turmoil has really put a spanner in the works for capital funding
in our sector.
However, we continue to focus our efforts on making sure the
Reward area is self supporting and generating early cash flows and a profit.
The focus of the Company has been very specifically on making money from
the capital we have put into the Reward project and with little additional capital
required,
the Reward project is profitable in its own right.
We’ve been most fortunate compared to most mining companies and certainly
the explorers by
having a project that is providing cash flow to keep the project
on track. In fact, it could even generate sufficient funds to consider other
opportunities such as acquisitions as well as the additional exploration I
mentioned at Hargraves and also further development at Reward.
corporatefile.com.au
Is your longer term development strategy for the Hill End Project on track?
MD Philip Bruce
The Hill End Project is certainly on track. We’ve achieved all that we said we
would. We said we would initially undertake a bulk sampling exercise, but
during preparations for that we saw that the zones were more continuous,
higher grade and more extensive than we initially envisaged. So we moved
directly into a continuous, small scale operation at Reward and we’re probably
a little advanced of where we said we would be.
The overall development strategy for the Hill End Project is to expand
production and resources from the Hawkins Hill – Reward area. However, I
expect that the Hargraves area will become a large scale operation in terms of
the size of resource envelope that we’ve already identified, indicating that it’s
going to be long life, bulk tonnage project, with a relatively low grade in the
order of 4-5 grams per tonne instead of 20 – 30 grams per tonne currently from
Paxton’s.
corporatefile.com.au
Thank you Philip.