Business of the Company following the Demerger of Leyshon Energy
Following the implementation of the Demerger, the Company’s assets comprise solely of the Mt Leyshon Gold Project along with its remaining cash reserves . The Directors are undertaking investigations of potential acquisition opportunities.
The Company is seeking high quality mineral investment opportunities in China and elsewhere to complement the Mt Leyshon Gold Project.
Mt Leyshon Gold Project
The Mt Leyshon Gold Project is located 28 kilometers south of Charters Towers in Queensland. The Mt Leyshon Gold Project operated from 1987 to 2002 as an open pit mine producing over 2.5 million ounces of gold from a 1.5 gram per tonne ore body and 2.3 million once of silver during its mine life.
The Mt Leyshon mine site has been significantly rehabilitated. A "Closure and Rehabilitation Plan" was submitted during the second quarter of 2012 to the Department of Environment and Resources Management (QLD). Newmont is performing the rehabilitation on behalf of the Company. Pursuant to an agreement between the Company and Newmont, Newmont is responsible for all environmental obligations in respect of the Mt Leyshon leases in perpetuity regardless of changes to those obligations arising from changes to regulatory requirements and has indemnified the Company to that affect.
In June 2012, the Company commenced a drill and test work programme on a large stock pile of ball mill scat at the Mt Leyshon Gold Project. The programme was designed t follow up a number of previous studies that had shown that depending on the treatment route selected, between 100,000 and 175,000 ounces of gold could be recovered through the retreatment of the highly mineralised material. The material was stockpiled at a time when gold prices averaged around $300 per ounce and the most recent of the previous studies was based on a gold price of US$780 per ounce. The stockpile comprised approximately 12-15 million tonnes of highly mineralised ball mill scats.
However, the ball mill scats drilling and preliminary test work programme indicated that the Mt Leyshon Gold Project is viable but requires significant capital expenditure for a relevantly modest return ( even with gold prices in excess of US$1,500 per ounce). The Directors decided on the completion of the programme that the returns from the project did not warrant the significant capital expenditure required and agreed to review the project's development in the event that the price of gold increased.
The Mt Leyshon Gold Project will continue to remain in care and maintenance until further notice. The Company may elect to dispose of all or part of its interest in the Mt Leyshon Gold Project.
A number of early stage mineral projects in South America and Asia are currently being evaluated for potential acquisition by the Company. In addition, the Company will seek corporate opportunities to merge or otherwise combine with other mineral companies.