Update on Merger with Polymetals - Notice of Meeting

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
3.1.5.2 Metallurgical Testing
Testing of ore samples from Mt Boppy was carried out by independent technical specialists 4 and in
September 2012 5 . The second round of testing was undertaken to confirm results obtained in May 2012, as
some confusion remained regarding the representativeness of the material chosen to characterise plant
feed.
A composite sample was subjected to standard Bond ball mill testing. A Bond ball mill work index (BWI)
value of 18.1 kWh/t was obtained. This value is aligned with previous operating experience that the Mt
Boppy fresh ore is hard and abrasive, and has been used in plant design calculations.
Grinding flotation concentrate to a P 80 size of 20 µm rather than 53 µm allowed sufficiently improved
recoveries (80.0% compared to 78.2%) to justify the inclusion of two-stage grinding in the flowsheet to
achieve this fineness.
The carbon-in-leach (CIL) leaching plant configuration was chosen as a result of apparent tie-up of
solubilised gold (preg-robbing) that was seen during the May 2012 testing. The effect was counteracted by
having carbon present in all leach stages.
The test work conducted, flowsheet decisions made, and design data extracted from the tests are, in AMC’s
opinion, reasonable for the scale and short life of the project.
3.1.5.3 Plant Layout
The new plant layout will utilise as much of the existing equipment as possible, in its original location. This
will minimise civil expenses for new foundations. The original grinding mill which will now become the regrind
mill and the lime silo which will all be reused in place.
Some minor work has been completed in preparation for the project. Leach tanks were inspected and found
to be adequate for a 2-year campaign. Tank supports were chipped out of the concrete floor and repaired.
Monolithic concrete blocks will be poured around the supports to protect the steel from further corrosive
damage.
The existing crushing plant is located west of the plant in the area earmarked for ROM ore storage. The
existing equipment will be removed for possible sale. The new, two-stage crushing plant will be leased
equipment operated by Polymetals personnel. The existing dump station and grizzly screen will be reused.
Some minor capital expense has been allowed for the work. Sufficient area exists for anticipated storage of
ROM material ahead of the plant.
All piping and electrical wiring has been removed and new, elevated support racks are in the process of
being constructed for the new plant.
The layout is compact and logical and has been well conceived.
3.1.5.4 Capital Costs
Extensive use has been made of used and reconditioned equipment, with as much engineering and
construction input as possible being provided from within the company. Polymetals' intention is to employ
this strategy in the redevelopment of Mt Boppy.
Polymetals personnel developed the process flowsheet, mass balance algorithms, and Capex estimate of
$13.7M for the project to ±17%. Table 3.3 shows details of the estimate by area. Actual quotations for new or
new-secondhand equipment were obtained wherever possible. Bids were solicited for services, and
4
5
Alan Eslake, “Report M2515 - Metallurgical Characterisation Tests on Mt Boppy Ore Samples”, confidential unpublished report,
May 2012.
Steve Rayner, “Report M2588 - Metallurgical Characterisation of a Mt Boppy Ore Sample”, confidential unpublished report,
September 2012.
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