Keras Resources plc announced that it has made positive progress at the Grants Patch Gold Tribute Project, located 30 km north of Kalgoorlie in the prospective Western Australian goldfields. The company believes it will commence initial production of c. 30,000 tonnes per month during second quarter 2016, in line with expectations. Keras' initial mine development plan is to develop shallow laterite deposits to generate near-term cash flow.

These deposits comprise of previously unmined at-surface deposits and previously mined pits with remnant mineralisation located below the pit floor. At the first two laterite gold pits, Accord and Anomaly 22, new estimates have been produced, mine designs finalised and environmental studies completed. This should allow mining to commence in second quarter 2016.

In-house modeling of the surface laterite mineralisation has been completed for Anomaly 22 and Accord utilising, with limited validation of the historic database supplied by Norton Gold Fields. The modeling indicates a potential exploitable 94,350t at 1.39 g/t Au, and 69,496 t at 1.32 g/t Au at Anomaly 22 and Accord, respectively. A small programme of confirmatory RC drilling will be completed prior to mining to finalise the mine plan.

It is expected that these two pits will provide the first four to five months of mining for Keras. Modeling of Bent Tree, a remnant open pit, is on-going and will be announced when completed. Initial production will be targeting 30,000 tpm during second quarter 2016.

The company has commenced assessment and feasibility studies focused on re-accessing the underground mine at Prince of Wales and these are advancing rapidly. This mine closed in 1992, when unseasonal cyclonic rains caused flooding at the mine and made the Headframe and Winder unstable and unusable. There are numerous ultra-high grade intercepts located just below the current stoping level (Level 10).

The plan will be to re-access the stopes to accelerate production whilst developing 11 Level to access the delineated ultra-high grade ore. Due to the thin nature of the orebody (1.2m), narrow vein mining methods using handheld machines will be used as it was previously at the mine. The ore body is firstly developed, which is the process of mining along the ore 1.5mW x 1.8mH, then the ore is stoped.

Development will be conducted by hand-held air powered machines, drilling about 30 blast holes, 25mm in diameter and 1.5m long. Stoping is the process of extracting the vein material from above each development level and below the one above, a vertical distance of approximately 15m. Different stoping methods are used for different orebodies in different mines based on factors such as wall rock competence, vein widths, dips and grades and volumes of mineralised material.

At Prince of Wales, the original shaft must be rehabilitated, new headframe and winder installed before any mining can take place. This will take approximately 9 to 12 months depending on the condition of the timbers in the shaft and the amount of unwanted material in the underground development levels that will be needed to cleared up. Cash flow from gold production will be used towards the funding requirement of the recommencement of mining at the underground mine.

This project is expected to produce approximately 5,000t of ore per month for the life of the Tribute Contract with Norton Gold Fields.