New pit optimisations put Golden Cross' Copper Hill copper/gold project on track to production

INITIAL PROJECTIONS

• Discounted Cash Flow of $360M (10% discount rate) after $420 million capex. deducted

• 19.5 year mine life

• Production of over 335,000 tonnes copper, 1.1 Moz gold

• 3.3 million tonnes sulphur for 9 million tonnes sulphuric acid

• Capital cost estimate $420 million with potential for reduction

• Environmental benefits with all elements extracted, value added: copper metal, gold bullion, sulphur to acid and iron to feedstock.

KEY POINTS

• Mine-crush-grind-flotation at Copper Hill producing total sulphide concentrate for loading to existing on-site rail-head

• Rail concentrate to purpose-built roaster-acid plant-SX-EW-CIL in South Australia

• China National Automation Control System Corp (CACS <http://www.cacs.com.cn/index/home.htm> ) personnel have reviewed Copper Hill data on-site and visited potential roaster, SX-EW and CIL sites in South Australia

• CACS estimates a $5.8 million cost for a Bankable Feasibility Study (BFS) at a standard acceptable to Chinese banks

• CACS has the capacity to take all the copper produced from Copper Hill

Executive Summary
The Copper Hill Project remains Golden Cross' most advanced project. With in-ground resources containing over 421,000 tonnes of copper, 1.2 million ounces of gold and 3.3 million tonnes of sulphur it is a valuable resource for Golden Cross Resources, the Central West community and the state of New South Wales.

Maximising the return from the existing resource is possible if all sulphides can be floated, roasted and converted into acid soluble copper and free gold within an iron oxide-rich roaster calcine.  Cathode copper can be produced by Solvent Extraction from the calcine followed by Electro-Winning (SX-EW) with the gold leached by cyanide, recovered by Carbon-in-Leach (CIL) and smelted to gold bullion. Roaster exhaust sulphur dioxide will be captured to produce sulphuric acid for copper leaching with the excess available for sale. The residual iron oxide calcine should find a ready market in the steel making industry.

On this basis a complete review of the Copper Hill optimised pits has been undertaken (using cost data supplied by Golden Cross) by Australian Mine Design & Development Pty Ltd (AMDAD) indicating a way forward for the project which delivers an estimated DCF for an operating mine of $360 million, a mine life of almost 20 years producing 335,000 tonnes of copper metal, over 1.1 million ounces of gold bullion and 3 million tonnes of sulphur. Basic parameters used for the selected model were: 85% recoveries for copper, gold and sulphur, US$2.70/lb copper, $US800/oz gold, US$30/tonne sulphur, $US:$A 0.85 and a 10% discount rate. The price/cost assumptions used by AMDAD and Whittle 4X allow a lower cut-off grade (0.15% copper and 0.3g/t gold) to define additional mineable blocks within the existing 0.2% copper cut-off resource.

It should be noted that the optimised pit cash flows, like the other projections, are indicative only; the optimised pits include Inferred Resources and are idealised rather than practical pit designs.

Development costs at the Copper Hill site of about $310 million are now estimated based on an open pit mine with conventional crush-grind-float technology and ore throughput of 8 million tonnes per annum. An additional $110 million is estimated to build a sulphide roaster, sulphuric acid recovery plant with copper metal recovery using SX-EW technology and gold bullion following cyanidation and CIL. This approach would recover annually, on average, about 17,000 tonnes of copper, about 55,000 ounces of gold and over 450,000 tonnes of sulphuric acid for almost twenty years.

Following a review of Copper Hill production requirements, in Australia and subsequently in China by China National Automation Control System Corp (CACS) personnel, it has been indicated by CACS that considerable savings in capital costs may be realised by CACS fabricating or sourcing all necessary plant and equipment from China and assembling it, in modular form, on site. Access via the existing Copper Hill railway spur from Molong will be of great assistance. CACS is prepared to complete a bankable feasibility study, acceptable to Chinese banks, at a cost to GCR of $5.8 million. CACS has also indicated interest in a copper off-take arrangement.
   
    
Managing Director Kim Stanton-Cook says "GCR is embarking on a very challenging but ultimately rewarding endeavour. I believe that, with ongoing support from HQ Mining and the evolving beneficial relationship with CACS, the finance, technical assistance and equipment required will be delivered to meet each stage of the Copper Hill development process. The encouragement GCR has received from NSW and South Australian government personnel, the Cabonne Council and the SFRDB in Port Pirie is also greatly appreciated."  

About Golden Cross Resources Ltd

GCR is a multi-commodity global explorer, which has formed a strategic alliance with HQ Mining Resources providing access to capital and mining and processing equipment from China. GCR, backed by HQ Mining, is seeking new mineral exploration and development opportunities focusing on copper and gold in Australia, the Americas and southern Africa.GCR is continuing to progress its 100%-owned copper-gold Copper Hill Project and is accelerating its exploration programmes with drilling planned at Burra, Rast and Cargo in NSW and Mulga Tank in WA. Large prospective areas are under application for EL's in South Australia and Panama.
 
About HQ Mining

HQ Mining Resources shares common shareholders with CUMIC and is the investment arm of the CUMIC Group of Companies in Australia.CUMIC is a privately owned, Beijing-based investment company specialising in mineral and mining investment.CUMIC has a portfolio of exploration and mining assets in various parts of the world, focusing on iron, copper and gold.It developed and controls the Mongolia Eleet River Iron and Steel Company, a major iron ore mining company, and is currently seeking an IPO on the Hong Kong Stock Exchange


About CACS and SINOMACH

CHINA NATIONAL AUTOMATION CONTROL SYSTEM CORP www.cacs.com.cn/index/home.htm
 
CACS is a member of the China National Machinery & Equipment Corp (SINOMACH www.sinomach.com.cn/ ) Group and is a leading, highly innovative company focused on electromechanical technology, industry and trade. Founded in 1981, CACS is headquartered in Beijing and is at the forefront of developing technology and building projects in the fields of electric power, petro-chemistry, metallurgy, construction materials, ports, intelligent buildings and public urban projects within China and overseas.CACS has the ability to complete a Bankable Feasibility Study and then to construct and source all the mill and plant requirements for the Copper Hill Project including the roaster metal and acid producing complex.