Tombola Gold Limited announced Operational and Commercial Update. HIGHLIGHTS: Second gold pour of 9.66kgs took place on 4 March 2023, realising $724,000 of revenue (265.312 Ozs Au payable at a realised gold price was $2,743.25 /Oz Au) after refining at the Australian Bullion Company. Processing continued at GAM processing plant although further mechanical problems were experienced resulting in a 5-day shutdown with processing resuming on 6 March 2023. Mill recoveries were at 91% over the month, although gold production is lower than modelled, resulting in smaller than predicted cash flow. Processing at the Great Australian Mine (GAM) plant has continued under normal operations, despite a further setback in the plant where a spool from the cyclone feed pump developed a hole that needed to be repaired, causing four days stoppage for repair work to be carried out. The mill recommenced processing on 6 March 2023.
Recovered grades during the month were lower than expected based on the grade estimates from the geological resource block model and in-pit grade control sampling results. As of the end of February 2023, 40,000t of ore had been crushed at GAM, with another 16,000t waiting to be crushed at the GAM ROM pad, with 36,000t remaining at the ROM pad at the Golden Mile. Following the
processing the remaining ore at GAM, with the benefit of a new installation of cyanide treatment, the
Company will be make a decision on the viability of processing the rest of the ore at Golden Mile.
The reasons for the lower grades than predicted from the resource and grade control modelling are
currently being assessed, but there appears to have been additional dilution during mining coupled with a
greater orebody complexity (understanding that the mineralisation consists of narrow sub-vertical vein gold
lodes). Additionally, final mill reconciliations still need to be carried out once decommissioning has been
completed. Update on the Company's South Australian Burra Project: Following meetings held with the SA Dept of Energy and Mining last December, and as part of the recent review /renewal process, it was agreed that the Company (via subsidiary Ausmex SA) was required to make
a compulsory relinquishment of various areas within the Burra portfolio. These areas were mostly from the
less prospective western part of the tenement portfolio where limited work had been carried out.
Importantly the Company retained the key strategic areas of interest along the highly prospective Burra /
Princess Royal corridor, and to the east in the equally prospective Delamerian (Nackara Arc) buried under
younger sedimentary cover. These areas were the subject of the technical report by the Company's third-
party consultant Ken Collerson. Accordingly, whilst the total area under tenure has been reduced from 6,561km to 3,565km, the Company's
exploration strategy and plans for Burra have not been impacted. It is to be noted that the 3,565km2 is still
a significant tenement package in a key-mineral belt, highly prospective for copper and gold ore deposits.
As part of the tenement reduction, the Company's annual expenditure arrangements (AEA) were
significantly reduced, a significant benefit to the area's reduction, as the expenditures (both annual and
historical rolled over from previous years) were unsustainable covering such a large area. Currently the new
revised AEA over the 3,565km that covers the period 1 April 2022 to 31 March 2024 is $1,220,000.
A new map of the revised tenement holding for Burra is attached (Appendix A), together with a table showing
the tenement changes (Appendix B). The area reduction does not impact on the exploration strategy of the
Company at all, as the relinquished ground predominantly covered the less prospective ground to the west
of the main Burra mineral field. As part of this tenement and activity review with the Department of Energy and Mining in SA, the previously
signed Accelerated Discovery Initiative (ADI) Funding Agreement (11 November 2020) between Ausmex SA
and the Department of Energy and Mining that provided a reimbursable grant to the Company of $300,000
for a combination of geophysics and drilling to be carried out on the ground, was terminated due to the
expiry of timeframes within which the activities were to be carried out. No payments of funding were made
to Ausmex, and no costs have been incurred in relation thereto. Updated mine schedules are currently being worked on with Tombola's mining consultants, and a revised
operational plan is expected to be available later this month.