Tuesday 11th December 2018

Resource Clips

St Andrew IR Manager Suzette Ramcharan on Ontario assays of 9.88 g/t gold over 9m

St Andrew Goldfields Ltd TSX:SAS announced assays from its Taylor Project in northeastern Ontario. Results include 9.88 g/t gold over 9 metres (including 58.2 g/t over 0.5 metres), 4.95 g/t over 12 metres (including 20.67 g/t over 2.3 metres), 8.31 g/t over 7.5 metres (including 43 g/t over 0.7 metres) and 7.24 g/t over 7.5 metres (including 33.9 g/t over 1.5 metres).

Manager of Investor Relations Suzette Ramcharan tells ResourceClips.com, “The company was originally listed in 1983. So it’s had a chance to accumulate a very good land package in the Timmins Mining District—Taylor being one of the assets. We had a management change in 2007. The focus of the new St Andrew was to put the assets back into production, create some cash flow, then spend the money on the land we have just east of Timmins up to the Quebec border. That-120 kilometre stretch really hasn’t been worked over the past 20 years, very minimal exploration spending. Since we started cash flowing in 2009, we’ve started to pump the money back into the ground.

“Taylor already has an existing resource in two different zones: the West Porphyry zone and the Shoot zone. The current drilling that we’re doing is infill drilling on the West Porphyry zone. Our intention is to update the resource estimate and to produce a prefeasibility study before year end. With the amount of information that we have on Taylor, and the confidence we’re getting as we continue the infill drilling program, we believe that Taylor is the next possible operation to enter production. So the plan going forward is to complete this drilling program, which will continue until the end of August, update the resource estimate, produce a prefeasibility study and then start plans for development and future production.

With the amount of information that we have on Taylor, and the confidence we’re getting as we continue the infill drilling program, we believe that Taylor is the next possible operation to enter production.—Suzette Ramcharan

“The results today tell us two things,” continues Ramcharan. “1. That they are in line with previous drilling. They are building greater confidence in the resource that we have to date and greater confidence in the minability of the deposit. Additionally, Taylor has got the sexier-type grades. On the eastern portion of the camp, where our operations lie, they are more moderate grades, with an average grade of 5.5 g/t on the reserve. Taylor has a number of high-grade hits so it’s a nuggetier-type deposit. 2. [These results] have expanded the zone of mineralization. So it leaves room for us to continue to grow the size of the deposit.

“The company currently has three mines in operation. Holloway and Holt—which are underground deposits—and Hislop which is the lower-grade, open-pit deposit. The three mines currently maximize our 3,000-tonne-per-day mill. The theory we have is that we would like to maximise the grade from the underground operations, because they’re higher grade than the pit, then reduce the pit. So Taylor would fit in by displacing the ore from the pit and thereby increasing the average grade that goes through the mill, thereby increasing total ounces. So Taylor’s a good fit for us in that respect. It’s about 65 to 70 kilometres west of our mill. Right now we’re trucking from the pit, which is about 45 kilometres from the mill. But because of the grade, and because of the amount of tonnes were expecting, it’s worth the trucking distance.

“Last year was a pivotal year for us. We were able to do a good number of ounces. We had production, we had good cash flow, and we were ramping up at three assets. And the ramp-up, obviously, was reflected in the share price. However, this year was going to be a transition year for us. I think the market anticipated a little bit more out of 2011, and our first quarter results did not deliver what they were expecting. And I think the company itself believes that we didn’t do as good a job of managing expectations.

“But 2011 is a transition year. At our Holloway mine, we’re transitioning from one mining area to another. So our fixed costs stay the same, but our production is reduced. Same thing at our Holt mine—we’re still ramping up. We only commenced commercial production at the beginning of 2Q, and ramp up has been slower than expected, so there are some additional factors. Production and costs are in a transition mode; costs are very much higher, production very much lower. I think that our share price has come down to reflect that, as well as the change in the juniors, as everybody has seen. Costs overall have increased across the board, as well.

“I think the market is waiting for 2Q results, which are going to come out tomorrow. Then they can see where the company is going to get the improvement in the second half of the year. The second half is really where things are going to get up to full speed. In 2012, we’re aiming for steady production of around 100,000 ounces.”

Ramcharan concludes, “The bullish gold price has helped, especially with the increased costs we have, and generally speaking we’re very bullish on gold. We believe the price will stay up for the foreseeable future. The markets are very schizophrenic at the moment, but it goes with the global space that we’re in. Neither the juniors nor the seniors are really seeing any appreciation in share price tied to the price of gold right now. But we believe that at some point that will change, and even though the markets are selling off on equities, there’s going to be a buy back at some point. So with the share price depressed as it is, there’s going to be a point where we are attractive again.”

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Suzette N. Ramcharan
Investor Relations
416.815.9855 x 234

by Greg Klein and Ted Niles

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