Asia Miner Article:
While we wait for updates from the company, we can see the progress they are making from this article, and also knowing the new 6000 Tonne Per Day Mill is 2 months into the commissioning stage. Looking forward to what the second half of 2011 has coming...
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A Majestic transformation
MAJESTIC Gold is transforming from explorer
and very small-scale producer into a largescale
production company through ongoing
development of the Songjiagou Gold Project
in Shandong province.
The company is processing 1400 tonnes
each day through the existing Songjiagou
plant but is in the final stages of constructing
a new mill with daily capacity of 6000 tonnes.
It expects to begin throughput at the new mill
during May, which will bring daily processing
at Songjiagou to 7400 tonnes. (***MY NOTE: PR April 27th Indicated the Mill Commissioning started***)
Majestic’s president and CEO Rod Husband
says the company is ramping up mining activity
to feed the new mill with material being
stockpiled at the mill ready for processing.
He says based on a recent preliminary assessment
report prepared by Wardrop, a Tetra
Tech company, Majestic will be able to produce
around 105,000 ounces annually for the
next 22 years, however, the company is considering
additional capacity expansion in the
next few years as 22 years is a lengthy mine
life and it should be more like 10-15 years.
“We are also focused on completing a detailed
five year mine plan and then implementing
it so we have proper grade control. At
present we just dig the dirt and run it through
the mill but once we have a proper plan and
grade control we expect to be able to lift production
substantially, up to 250,000 ounces.”
The Wardrop report also recommends two
phases of exploration designed to upgrade
and expand the resource with the first
phase focusing on increasing the level of
confidence in the shallower portion of the
resource and the second focusing on
deeper mineralization as well as additional
resources at depth and along strike.
Rod Husband says, “It’s an exciting time as
we are just months away from transforming
to a full-on production company and it’s really
largely because we are in China. You can’t do
that in North America – you have to wait for
engineering reports, obtain the capex and
then build the mill.
“Our partner, the company’s biggest
shareholder, has funded construction as we
progressed because he knows what’s there.
He’s been mining it for seven years on a
small scale and it’s just a matter of recognizing
the economies of scale and making
the operation bigger.”
He says Majestic is evaluating a couple of
other projects in China. “One of them is a
small open pit, cyanide leach operation in
southern China. We are doing due diligence
and think it has the potential to hold between
500,000 and 1 million ounces.
“We will have the cashflow to expand organically
from here and, as everyone knows, there
are tremendous opportunities in China. The
geological risk is low because you do deals on
existing mines that haven’t been explored
properly, so all you have to do is drill out the
resource then redesign the way to mine it.”
Rod Husband says Majestic is also considering
listing Chinese assets on the Hong
Kong exchange. “It seems Asian investors
through Hong Kong have a much more open
attitude towards foreign companies. It’s expensive
to list so you need projects worth at
least $100 million to make it worthwhile and
we are hopeful of getting to that stage.”
