Mr. Rod Husband reports
GOLD PRODUCTION UPDATE
Majestic Gold Corp. has issued quarterly gold production results of its Chinese subsidiary, Yantai Zhongjia Mining Company Ltd., at the Song Jiagou property for the past five fiscal quarters beginning Oct. 1, 2010, and ending Dec. 31, 2011.
The related table highlights information relating to the operations at the Song Jiagou project.
Total, Quarter
Quarter ended fiscal ended
Dec. 31, March 31, June 30, Sept. 30, year Dec. 31,
2010 2011 2011 2011 2011 2011
Milled (t) 116,584 118,488 284,131 454,183 973,386 397,739
Head grade (g/t) 0.364 0.262 0.309 0.277 0.295 0.330
Effective grade (g/t) 0.368 0.338 0.279 0.387 0.347 0.427
Concentrate produced (t) 1,255 1,084 2,693 6,653 11,685 6,009
Gold in concentrate (kg) 37.14 34.13 65.13 153.58 289.99 150.35
Gold for sale (kg) 34.54 31.75 60.57 142.83 269.69 139.83
Gold for sale (oz) 1,111 1,021 1,947 4,592 8,671 4,496
Gold sold (kg) 37.65 28.35 58.88 105.22 230.10 120.10
Gold sold (oz) 1,211 912 1,893 3,383 7,398 3,861
Notes:
Increase in tonnes milled between the quarter ended March 31, 2011, and the quarters ended
June 30, 2011 and Sept. 30, 2011, was a result of the commissioning of the new
6,000-tonne-per-day mill in May, 2011. This mill was operated at various levels to properly
test and fine-tune its operation through to the end of June.
Effective grade is the net real grade or the mill throughput, and is calculated by taking
the sum of gold in concentrate plus gold lost to tails and dividing by tonnes milled.
This grade has been significantly higher than the assayed values of the head grade.
It is believed to be a result of a significant free-gold component in the rock, which
results in the nugget effect on samples. The company is looking to implement more
detailed head grade sampling and assay procedures in an effort to reduce this error.
There is a good chance this error also occurs in the drill holes, as it is very hard to
get representative holes.
The slight decline in tonnes milled for the period ended Dec. 31, 2011, is a result of the
mill being shut down for maintenance for seven days in October, 2011.
Total mill throughput averaged 4,925 tonnes per day for the six months ended Dec. 31, 2011,
or approximately 66.5 per cent of total capacity.
Gold production results were in line with the block model estimates and schedule provided by Wardrop in the preliminary assessment technical report (PEA report) released Jan. 20, 2011. The company is currently producing from areas considered to be waste in the PEA report but, given the price of gold and the contract mining agreement, it has been determined that this material can be mined and generate positive cash flows. Once this material has been removed and either milled or stockpiled, the company will commence mining the higher-grade material situated below it. During the calendar year ended Dec. 31, 2011, the company processed all of the material that was mined from the pit. This was due to the lack of land where waste or low-grade material could be stockpiled. Recently, the company secured an area to dump waste and low-grade material, and plans are being initiated to increase the total tonnes removed from the pit. Majestic will continue to process the low-grade material to generate cash flows but expects to see a slow and steady increase in throughput and grade.
The geological and technical information contained in this news release has been reviewed and approved by Mike Hibbitts, PGeo, who is a qualified person under the definitions established by National Instrument 43-101.
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