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Kingsrose Mining Limited KRM Trading on ASX

Projects

Talang Santo Mine

The discovery of Talang Santo in June 2011 was an exciting milestone achieved by the Company and work quickly commenced to advance its development. Talang Santo is located within a major cluster of epithermal veining and is located 17km by an established all weather haul road from the Way Linggo processing plant.

Work quickly commenced to move Talang Santo from exploration into development and following receipt of the requisite regulatory approvals, underground mining at Talang Santo commenced in July 2014. The first gold shipment from the Talang Santo Mine followed shortly after in mid-August 2014.

Underground mining continued with pleasing results – with grades exceeding expectations based on the Mineral Resource model with the mined grade exceeding 12g/t Au for two consecutive quarters. Production for the 2015 financial year totaled 67,487 tonnes of gold at 9.8g/t Au for 24,227 ounces of gold.

Additional infill and resource drilling undertaken during the latter part of 2014 culminated in a significant resource upgrade during 2015 and further confirmed the increasing size and scale of the Talang Santo Resource base. In addition, exploration and development work confirmed the existence of a second high grade ore body at Talang Santo, the Splay vein on the 3 Level of the mine.

Poor ground conditions and the intersection of a high pressure aquifer on the 4 Level of the mine in June 2015 resulted in a reduction in Resource recovery, productivity and mineable areas which is turn adversely impacted production levels. A review was undertaken and various measures were trialed over the following 12 months to improve productivity, reduce the high cost of mining and lessen the impact of the inflow of ground water into the mine, however the operating environment remained challenging. As a result, the decision was made to progressively suspend underground mining at Talang Santo from mid October 2017.

The potential at Talang Santo is immense, with a portion of the Mineral Resource remaining both at surface and at depth, and with this in mind, a scoping study is underway to consider options to re-engineer the current underground mine. This would involve modern mechanised underground mining methods which would result in far greater rates of production and reduce costs.

In parallel with the underground scoping study, Kingsrose is in the process of completing a feasibility study on an open pit operation at Talang Santo to access the high grade portion of the Resource remaining in the upper levels of the Mine. Accessing the remnant Resource at Talang Santo via an open cut presents a safe and excellent cash generation opportunity and will allow the Company to direct funds towards expanding the current known resource at Talang Santo via additional exploration and drilling.