Superior Gold Inc. is pleased to announce that it has commenced development of its 100% owned Hermes Project, which is located approximately 65 kilometres southwest of the Company's Plutonic Gold Mine, 800 kilometres north east of Perth, in Western Australia (Figure 1).
The first stage of development is the construction of the haul road which will connect the Hermes orebodies to the mill at the Plutonic Mine, where the ore will be processed. The contractor is currently mobilizing personnel and equipment to site, with work on the road scheduled to commence this week. The Hermes deposit will be mined as a conventional open pit operation. The contribution of the ore from Hermes is anticipated to allow Superior Gold to reach its targeted annual production of 100,000 ounces of gold.
The Company expects that construction of the haul road will take up to three months to complete. It will be accompanied by camp mobilization and followed by initial pre-stripping activities prior to the commencement of mining. Forecast capital expenditures for the remainder of 2017 at Hermes are approximately $9.9 million. Pre-stripping will continue during the first quarter of 2018.
Chris Bradbrook, President and CEO of Superior Gold stated: "We are very pleased to have reached another key milestone in the evolution of the Company. The Hermes Project will become an important contributor to our production profile and we look forward to commercial production from Hermes in 2018. Additionally, we plan to commence drilling and exploration around Hermes to expand the overall mineral reserve and mineral resource and extend the mine life."
Plutonic Gold Mine
For the two consecutive quarters since acquiring the Plutonic Gold Mine in October 2016, Superior Gold has produced 43,763 ounces of gold and generated $12.8 million in free cash flow. For further information please see Press Release dated May 25, 2017 entitled "Superior Gold Inc. Announces First Quarter 2017 Financial and Operating Results" available on the Company's website at www.superior-gold.com.
Outlook and Strategy
In the near term, the Company is focused on re-establishing the Plutonic Gold Operations as a stable gold producer capable of producing 100,000 ounces of gold annually. To achieve this goal, Superior Gold intends to focus on its growth strategy which includes:
- Focusing on quality high-grade ounces
- Optimizing recoveries
- Increasing incremental production from underground and open pit sources
- Resource and reserve additions through property wide exploration
- Leveraging the excess mill capacity
With the proceeds raised on the completion of the initial public offering, and the cash being generated by the Plutonic Gold Mine, the Company has the liquidity available to execute on its near-term growth and exploration strategy.
Scientific and technical information in this press release has been reviewed and approved by Simon Lawson who is a member of the AusIMM and a "qualified person" within the meaning of NI 43-101. Mr. Lawson is an employee of the Company and serves as the Chief Geologist.