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 ASX; CAH
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Company Statement
Catalpa Resources Limited (ASX: CAH) has two exciting gold assets; a 30% interest in the 100 000+ ounces per annum Cracow Gold Operations - a producing gold mine in Queensland (70% Newcrest Mining Limited); and the 100 000+ ounces per annum Edna May Gold Operations in Western Australia (100%) - an advanced gold project on schedule to commence production in June 2010.
The A$92 million Edna May Gold Project is fully funded, and, as part of the finance facility, Catalpa has sold forward 352,316 ounces of gold at A$1,557.50 per ounce. At an average gold price of A$1,400 per ounce Catalpa will realize an average cash operating margin of A$72 million per annum from the Edna May Gold Operations alone.
With a combined Mineral Resource of more than 1.9 million ounces and a combined Ore Reserve of more than a million ounces of gold, the Cracow and Edna May Operations will provide a sustainable cash flow to fund Catalpa’s growth strategy.
Catalpa is confident that both the Cracow and Edna May Gold Operations offer further Reserve and Resource growth potential, with ongoing exploration programmes at both operations. In parallel, the Company continues to proactively identify and assessother production growth opportunities.
The Company has a committed and technically accomplished management team and a highly-experienced and supportive Board, committed to realising shareholder value from the Company’s growing asset portfolio.
Catalpa has adopted best practice standards across all its activities, including health and safety, environmental management, corporate governance and social responsibility.
Current Operations
EDNA MAY GOLD PROJECT
Overview
Catalpa’s wholly-owned Edna May Gold Operations is conveniently positioned just two kilometers from the infrastructure of Westonia, on the eastern edge of WA’s Wheatbelt region. The mine is half way between Perth and Kalgoorlie and ideally situated to be serviced by either of these major mining centres.
With its robust economics, geologically and metallurgically well defined ore-body, high Ore Reserve confidence and excellent recovery rate of more than 92%, Catalpa’s Edna May Gold Operations offers an attractive, long-term platform to grow a mid tier gold producer.
Catalpa’s mine and processing schedule demonstrate average gold production at Edna May in excess of 100,000 ounces of gold recovered per annum for a life of mine of more than nine years, with production planned to commence in June 2010.
Geology
The Project is located near the northern end of the Westonia Greenstone Belt, in the Southern Cross Province of Western Australia’s Archaean Yilgarn Craton. The Westonia Greenstone Belt comprises a series of outliers of predominantly amphibolite-grade metamorphic rocks extending approximately 100km WNW from near Edwards Find, south of Southern Cross. The remainder of the terrane comprises granitic rocks and their metamorphosed equivalents.
In the Westonia area, the remnant greenstone belt is about 5km wide and 10km long. In the immediate mine area the greenstone sequence strikes WNW and dips NNE at approximately 60 degrees. From north to south the sequence comprises magnesian mafic-ultramafic amphibolites, locally called the “Hangingwall Ultramafic”, underlain by a mafic volcanic sequence (“Footwall Amphibolite”). South of the mine area the Footwall Amphibolite is intercalated with units of quartz-feldspar-biotite schist interpreted to represent metamorphosed felsic igneous rocks.
Mineralisation Controls
Within the mine area, the footwall contact of the EMG comprises a major brittle-ductile shear. This zone is the primary structural control on gold mineralisation. It features WNW plunging stretching lineations that parallel the plunge of folded quartz veins and the plunge of highest-grade mineralisation.
Gold mineralisation is associated with quartz veins and selvages of diopside-amphibole-biotite-silica with accompanying pyrrhotite, pyrite and lesser chalcopyrite, galena, molybdenite and sphalerite. The majority of gold reportedly occurs within the veins, with lesser amounts in alteration selvages. Two types of veins are noted. The more important type, in terms of historic gold production, comprises a series of stacked, arcuate (antiformal) veins that form splays from the footwall shear zone. There are seven principal veins that, stacked west to east, are known as the Western, Edna May Hangingwall, Edna May, South, Central, Middle and Consolidated reefs. Each of the reefs has a similar antiformal shape, comprising a thin (<1 metre) limb along the footwall contact, thickening (up to 6m) in the west-facing hinge zone and thinning again to a metre or less as it conforms to wallrock foliation towards the hangingwall contact. In detail, the reef geometries are more complex with individual limbs splitting, converging and traversing other veins. The thickened hinge zones were the focus of historic mining and historic mine plans indicate the WNW plunge persisting to at least 250m below surface.
Mining
The mine has a low life of mine strip ratio of 1.9:1.0 after completion of the seven month pre-strip (2.1:1.0 before pre-strip). The pit wall angles are derived from extensive geotechnical review where seven separate slope design domains apply to the pit design.
The pit will be mined in four stages which have been designed based on three optimised gold price economic boundaries at A$600/ounce, A$800/ounce and A$1,250/ounce. The low strip ratio nature of the Edna May deposit allows the mine to employ a single mining fleet for most of the mine life.
Future Developments
Catalpa’s Board remains confident in the exploration upside potential of its tenement holdings, and has a clear strategy to increase the Edna May Ore Reserve to more than a million ounces in 2010, and further extend the life of mine beyond ten years. During the period, the Company’s exploration delivered further success toward these targets.
CRACOW GOLD PROJECT
Overview
The Cracow mine is located in central Queensland, Australia, approximately 4 kilometres from the township of Cracow and approximately 500 kilometres northwest of the city of Brisbane.
The Mine commenced operations in November 2004 and has consistently produced around 100,000 ounces per annum for the last five years. Ore throughput capacity exceeds 400,000 tonnes per annum with ore currently being sourced from the Royal, Sovereign, Klondyke and Crown mineralised zones. The gold mineralization occurs in steeply dipping low sulphidation epithermal fissure quartz veins developed at the intersection of major structures.
The Cracow Gold Mine is operated by Newcrest (70%) on behalf of the Cracow Mining Joint Venture. Catalpa’s 30% share of gold produced at the Cracow Gold Mine for the twelve months to 31 December 2009 was 31,233 ounces at cash cost of $500/ounce. The 30% share of Cracow is unhedged and unleveraged and continues to be fully exposed to the currently high A$ gold price providing a strong cashflow stream.
Ore Reserves of the project at 30 June 2009 were 0.23 million ounces at 7.2g/t gold, compared with a Mineral Resource of 0.84 million ounces at 8.2g/t gold. These figures reflect 0.49 million ounces of Inferred Resource that cannot yet be converted to Reserve. Exploration success has led to the delineation of the 225,000 ounce Kilkenny Inferred Resource and identification of the Phoenix mineralised structure. Recent drilling on the Kilkenny structure has intersected further gold mineralisation to the south of the Resource and this may extend the known mineralisation envelope, adding further potential for mine life extension.
The Cracow Gold Mine is a developed underground operation with a high quality management team. Cracow produces 95,000 – 105,000 ounces of gold annually and has outstanding potential to add substantially to the mine life through exploration success.
Geology
The gold mineralization occurs in steeply dipping low sulphidation epithermal fissure quartz veins. High-grade gold mineralization defined in the project resources occurs within five deposits (Royal Shoot, Crown Shoot, Sovereign Shoot, Klondike North and Kilkenny Shoot), each developed at the intersection of major structures. The Royal extends over a strike length of approximately 350 metres, the Crown is approximately 300 metres in strike length and the Sovereign has a strike length of 150 metres. The ore bodies average approximately 5 metres in width.
Mining
The underground orebodies are accessed from a decline and the open stoping mining method is used with concurrent waste backfilling. A small Newcrest mining team manages the contract mining operation.
Processing
Ore is processed by cyanide leach extraction in a conventional carbon-in-pulp processing circuit comprising leaching, adsorption, stripping and electrowinning to produce gold/silver doré bars.
Future Developments
Exploration around the project tenements indicates that additional mineralized vein structures exist in close proximity to the mine. The Phoenix, Empire, Stirling, Kilkenny, Klondyke and Rose's Pride structures provide opportunities for additional resources to extend the mine life. All of these structures have yielded drilling intercept grades in excess of 10g/t of gold.
Geographical Spread
Western Australia
Board of Directors and Key Management
| Mr Peter Maloney | Non Exec Chairman |
| Mr Bruce McFadzean | Managing Director |
| Mr John Rowe | Non Exec Director |
| Mr Murray Pollock | Non Exec Director |
| Mr Barry Sullivan | Non Exec Director |
| Mr Graham Freestone | Non Exec Director |
| Mr Erik Palmbachs | Chief Financial Officer |
| Mr Stuart Pether | General Manager - Operations |
| Mr John Fraser | Resident Manager |
| Mr Nick Winnall | Geologist Exploration Manager |
| Mr Adrian Pelliccia | Manager Geology |
| Mr Jonathan Winton | Mine Technical Superintendant |
| Mr Ken Puls | Maintenance Superintendant |
Company AddressLevel 1, 9 Havelock Street
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CapitalMarket Cap (2) A$205million
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Broker/Analyst Reports
18/03/09 - Resource Capital Research
Major Shareholders
| Lion Selection Group Ltd | 51.05% |
| Goldirich Holdings | 3.09% |
| Zero Nominees | 1.71% |
| Drummond Shay Margaret | 1.16% |
| Parkrange Nominees | 1.14% |
| UBS Wealth Management | 0.95% |
| Charlemange Investments | 0.88% |
| ANZ Nominees Ltd | 0.69% |
| Calliton | 0.56% |
| Colbern Fiduciary Nominee | 0.56% |
Related News
05/11/09 - Behind A Lush-Looking Hedge, Catalpa Is Morphing Into A Golden Swan22/07/09 - Catalpa’s Merger With Lion Selection Nears Completion, And Production Of 130,000 Ounces Of Gold Per Year Now Beckons
25/06/09 - Catalpa’s Merger With Lion Selection Puts It In Pole Position To Move Up The Australian Gold Production League Table
Most Recent Statement
17/03/10 - Placement Cleansing Notice 17 March 200917/03/10 - Notice to Option Holders for Renounceable Entitlement Offer
11/03/10 - Trading Halt
10/03/10 - Further encouraging drill results as CAH enters ASX300 Index
09/03/10 - CAH Options Exercise Price Adjustment
05/03/10 - Suspension from Official Quotation: CAHO