Intermin Resources Limited (ASX:IRC) ("Intermin" or "the Company") provides the following update on the Teal Gold Mine with the final physical reconciliations now complete and financial reconciliations pending final state government royalty and statutory payments and resolution of purported claims received from mining contractor Resource Mining Pty Ltd ("Resource Mining").
The final ore processing campaign at the 1Mtpa Lakewood toll milling facility was completed successfully and ran for 26 days up until 28 March 2018. Delays in carbon stripping and subsequent bullion production occurred during the Quarter with final gold poured (see Figure 1 in link below), shipped and refined in May and clean up completed in June. A total of 47,140 dry tonnes of transitional ore was milled at a final calculated head grade of 2.6g/t Au. Plant metallurgical recovery exceeded expectations from transitional ore at 87.1% producing 3,431 fine ounces of gold.
A full reconciliation of the mine physicals has now been completed and a summary of project performance shown in Table 1 below (see link below).
Gold production from Teal of 21,836 fine ounces exceeded Feasibility Study estimates and was in the upper range of the upgraded production guidance. Importantly, the mine performed well against the Reserve model with the grade in line, 13% more tonnes mined at the modelled grade and metallurgical recoveries 6% above Feasibility Study estimates(see Note 1 below).
Final cost reconciliations are currently being compiled and are expected to be completed in the September Quarter 2018 subject to resolution of purported cost variation claims received in the March and June Quarters from Resource Mining.
The Teal Gold Mine was mined under a risk share - profit share structure with mining contractor Resource Mining (see Note 2 below). Intermin and Resource Mining co-funded development on a 50:50 cost and risk share basis to first gold production with the net operating cash flow as determined under the agreement between the parties to be shared 75% to Intermin and 25% to Resource Mining.
The Company announced to the ASX on 30 April 2018, that it had received a purported cost variation claim from Resource Mining relating to the Teal Stage 1 project up until September 2017 and that it was working to resolve this and any additional claims that may be forthcoming from Resource Mining.
The Company has subsequently received a further purported cost variation claim from Resource Mining for Teal Stages 1 and 2 through to project completion. This further purported cost variation claim adopts a different methodology to the previous claim and, as with the previous claim, the Company disputes both the form and substance of the claim.
Intermin is working to resolve this matter and will provide further updates to the market in due course.
1 As announced to the ASX on 6 July 2016
2 As announced to the ASX on 19 July 2016, 14 March 2017 and 29 September 2017
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