23 March 2015

ASX & MEDIA RELEASE

THUNDERBOX FEASIBILITY STUDY,

FULLY FUNDED DEVELOPMENT APPROVAL &
GOLD HEDGING / FINANCE FACILITY
The Directors of Saracen Mineral Holdings Limited (ASX:SAR) (Saracen or the Company) are
pleased to advise that the Board has approved the development of our 100% owned Thunderbox
Operations (TBO) following the completion of the Feasibility Study (FS). The development of
Thunderbox will see the Company achieve its medium term vision of becoming a mid-tier gold
producer with gold production doubling to approximately 300,000 ounces per annum by FY2017.
Highlights:
Completion of the FS for the Thunderbox Operations - Stage 1;
FS shows robust project economics for Stage 1 over an initial 4.5 year mine life;
Board approval for the development of Stage 1, a large open pit on the Thunderbox deposit
delivering 597,000 ounces with All in Sustaining Costs (AISC) of A$1,032/oz;
Gold Hedging program of 140,000 ounces at an average price of A$1,520/oz entered into
with Macquarie Bank Limited (MBL) to underpin the initial capital investment;
Project Capital requirements of A$65 million is fully funded from existing cash reserves and
free cashflow generation from our Carosue Dam Operations (CDO);
Project Loan Facility of A$33 million with MBL available as a standby;
Project Development to commence in August 2015 with prestrip mining in Zone A;
Mill production to commence in July 2016 following a plant refurbishment period of 4 months;
Project statutory approvals well advanced with full permitting expected by April 2015;
Key personnel in place comprising much of the same team who successfully completed
the Carosue Dam refurbishment and resumption of mining in 2009;
Commencement of mining will coincide with the completion of the Whirling Dervish open
pit, allowing a seamless integration between operations;
Various opportunities to extend the Project life beyond Stage 1, including a bulk
underground mine at Thunderbox and satellite open pit opportunities.
Managing Director, Raleigh Finlayson, said:
The development approval for the Thunderbox Operations is a significant milestone for the
Company that will see Saracen produce gold from multiple operations for the first time in our history.
More importantly, this will realise our vision of joining the likes of
Northern Star, Regis, OceanaGold and Evolution as mid-tier gold
Saracen Mineral Holdings Ltd
producers, with production in excess of 300,000 ounces per annum
ACN 009 215 347
Level 4, 89 St Georges Terrace
following the commencement of Thunderbox production in FY2017.
Perth, WA 6000
Australia
Telephone (61 8) 6229 9100
Facsimile (61 8) 6229 9199

Significantly, the doubling of our production profile to 300,000 ounces per annum will be achieved
through organic growth from our Thunderbox and Carosue Dam Operations and will be delivered
using internal cashflows.
Thunderbox Stage 1 is forecast to deliver A$195 million of free cashflow over an initial 4.5 year
mine life that endorses the companys acquisition of the Thunderbox operations in January 2014 for
a total cash consideration of A$23 million and royalty payments of 1.5% capped at A$17 million
(which has been factored into the net free cashflow generation of A$195 million).
The development and delivery of Stage 1 will see over 550,000 ounces produced over an initial 4.5
mine life, with All in Sustaining Costs (AISC) of A$1,032/oz. Stages 2 and 3 have the potential to
see production extend to in excess of one milllion ounces over an eight year mine life at an average
production rate of 126,000 ounces per annum with average AISC of A$1,057/oz.
We have put the old team back together again to develop Thunderbox with Lee Stephens, Wayne
Heedes and George Viska all heavily involved in the refurbishment and the resumption of mining at
Carosue Dam in 2009 and now again at Thunderbox in 2015.
The scope of development and mining operations at Thunderbox is very similar in many ways to
what we have successfully implemented at Carosue Dam, specifically the refurbishment of the
Thunderbox 2.5 million tonne per annum CIL plant, which is very similar in condition and scope to
the 2.4 million tonne per annum Carosue Dam plant refurbishment which we completed under
budget and on schedule in 2009.
Open pit mining at Thunderbox will be conducted using a similar operating model as we have
successfully employed at Carosue Dam, specifically in recent years at Whirling Dervish which has
been a fantastic asset for Saracen and well continue to reap the financial benefits over the next 18
months. Whirling Dervish has been the cornerstone asset for Saracen over recent years, however
we believe that Thunderbox is even more robust on the basis of scale, resource confidence,
geotechnical competency, profitability and overall predictability. Table 1 below highlights the scale
and significance of the Thunderbox open pit relative to Whirling Dervish, with more than double the
gold production at 34% higher grade to be produced from Thunderbox over the next 4.5 years.
TB v WD

Units

Total Mining

BCM

Specific Gravity

SG

Thunderbox

Whirling Dervish

Variance

Variance %

36,271,000

19,747,000

16,524,000

+84%

2.2

2.6

-0.4

-16%

Total Mining

78,831,000

51,342,200

27,488,800

+54%

Waste Mining

67,923,000

44,648,200

23,274,800

+52%

Ore Mining

10,908,000

6,694,000

4,214,000

+63%

Strip Ratio

w:o

6.2

6.7

-0.4

-7%

10,908,000

6,694,000

4,214,000

+63%

Processing
Ore Milling

Grade

g/t

1.70

1.27

0.43

+34%

Contained Gold

oz

596,522

273,399

323,123

+118%

Recovery

93.3%

92.0%

1.3%

+1%

Recovered Gold

oz

556,533

251,527

305,006

+121%

Table 1: Comparison between Whirling Dervish (CDO) and Thunderbox Stage 1 (TBO)

Thunderbox Feasibility Study Stage 1

The Thunderbox Feasibility Study commenced in January 2014 when Saracen announced the
acquisition of the Thunderbox Operations. Stage 1 consists of open pit mining in Zones A and C
within the Thunderbox deposit. Mining in Zone A will commence 11 months before Zone C and then
both are mined concurrently, with no internal staging, until mining finishes in FY2020 (refer Figure 4
below). Future production from a potential underground mine at Thunderbox (Stage 2) and from
satellite open pits (Stage 3) fall outside of the scope of the FS, however mining inventories have
been provided in this announcement based on Scoping and Pre-Feasibility (PFS) level studies.
Table 2 below shows that the ore reserves for the Thunderbox open pit has grown considerably
since the PFS was released in January 2014 which delivered 7.6 million tonnes of ore at an average
grade of 1.8g/t for 431,000 ounces with a strip ratio of 6.8 (w:o).
Thunderbox

Units

Stage 1

Total Mining

BCM

36,271,000

Specific Gravity

t/BCM

2.2

Open Pit Mining

Total Mining

78,831,000

Waste Mining

67,923,000

Ore Mining

10,908,000

Strip Ratio

w:o

6.2

Processing
Ore Milling

10,908,000

Grade

g/t

1.70

Contained Gold

oz

596,522

Recovery

93.3%

Recovered Gold

oz

556,533

Table 2: Key operating metrics for the Thunderbox Feasibility Study Stage 1

Pre-strip mining will commence in August 2015, with processing set to commence in July 2016, at
an average production rate of 124,000 ounces per annum over an initial 4.5 years (Stage 1).
The cost of refurbishing and re-commissioning the existing treatment plant has been derived from a
plant refurbishment report prepared by Mintrex Consultants, which includes a proposed scope of
works and cost estimates provided by suppliers, mechanical and electrical contractors. Costs for
infrastructure and equipment have been derived from estimates by the Saracen study team from
supplier quotations and from a database of similar projects, including Carosue Dam.
Pre-strip mining in Zone A will commence in August 2015 and consists of mining 8.7 million cubic
metres of material at a cost of A$37.3 million. Included in this pre-strip is the mining of 357,000
tonnes of ore for 17,600 contained ounces that will be stockpiled ahead of processing starting in July
2016. Postponing the development of the higher cost Bannockburn open pit (as was included in the
PFS production schedule) has increased the pre-production mining schedule from 6 months to 11
months, and resulted in a higher pre-production capital spend of A$37.3 million relative to the PFS.
However AISC has fallen from A$1,100/oz to A$1,032/oz as a consequence.

Capital Costs (refer Table 3) include all expenditure to be incurred up to the commencement of
processing in July 2016, and is referred to as Pre-Production Capital. All ongoing Sustaining Capital
for the operations are including in the Operating and Sustaining Costs in Table 4.
Capital Costs

Units

Stage 1

Pre-production Costs

A$m

3.3

Pre-strip Mining Zone A

A$m

37.3

Plant Refurbishment

A$m

16.3

Plant First Fills

A$m

1.8

Infrastructure

A$m

6.3

Total Capital

A$m

65.0

Table 3: Pre-Production Capital Costs for the Thunderbox Feasibility Study Stage 1
Operating & Sustaining Costs

Units

Stage 1

Surface Mining

A$m

251.1

Processing

A$m

224.3

Business Services

A$m

35.5

WA State Royalty (2.5%)

A$m

20.9

Norilsk Royalty (1.5% capped)

A$m

12.5

Sustaining Capital

A$m

30.1

Total Operating & Sustaining

A$m

574.5

Table 4: Operating & Sustaining Costs for the Thunderbox Feasibility Study Stage 1

Pre-strip mining of Zone C will commence in July 2016 (when processing commences) and consists
of 5.8 million cubic metres of material at a total cost of A$26.9 million, which is included in Table 4
(Surface Mining). Note that the pre-strip cost for Zone C is included in the AISC shown in Table 6.
Operating costs were derived from a number of sources. Details of sources and methodology
include:
Open Pit mine designs and detailed mine schedule prepared by Saracen personnel;
Contract equipment hire and maintenance rates for open pit mining equipment supplied by
contractors;
Contract drill and blast schedule of rates supplied by contractors;
Recent cost data from CDO;
Processing, maintenance and general consumables are based on historical operational
report from 2003-06 and compared with current CDO operational data;
Processing reagents and major consumption rates are derived from operational reports from
2003-6. Costs of reagents and consumables are based on current rates;
Power costs are based on Dual Fuel/Spark Ignition generator sets provided by Pacific
Energy. Gas and transport pricing were provided by suppliers;
Personnel accommodation and FIFO costs are derived from a manning schedule with costs
calculated and distributed within each cost area;
Business Services cost structure is based on current CDO costs checked against 2003-06
actual operational reports.

Table 5 provides the unit costs of production during Stage 1. Total mining includes all pre-strip in
Zone A and Zone C. The revenue per tonne is calculated using a gold price of A$1,500/oz and a life
of mine recovery rate of 93.3%.
Unit Costs

Units

Stage 1

Total Mining

BCM

36,271,000

Total Mining

78,831,000

Ore Mining

10,908,000

Mining Cost

A$m

Open Pit Mining

288.4

Mining Cost per BCM

$/BCM

8.0

Mining Cost per tonne

$/t total

3.7

Mining Cost per tonne

A$/t ore

26.4

Processing & Business Services

Ore Milling

Processing Costs

10,908,000

A$m

224.3

A$/t ore

20.6

A$m

35.5

A$/t ore

3.3

Mining Cost per tonne

A$/t ore

26.4

Processing Costs per tonne

A$/t ore

20.6

Business Services per tonne

A$/t ore

3.3

Total Costs per tonne

A$/t ore

50.3

Revenue per tonne (recovered)

A$/t ore

76.5

Processing Costs per tonne

Business Services
Business Services per tonne
Total Unit Costs

Table 5: Unit Costs for the Thunderbox Feasibility Study Stage 1

Financials
Recovered Gold

Units
Oz

Stage 1
556,533

Gold Price

A$/oz

1,500

Revenue

A$m

834.8

Capital Costs

A$m

65.0

Cash Costs

A$m

541.1

Royalties

A$m

33.4

Total Costs

A$m

639.5

Free Cashflow

A$m

195.3

NPV (8%)

A$m

120.0

IRR

59

Cash Costs

A$/oz

972

AISC

A$/oz

1,032

Cash Costs per ounce

Table 6: Financials for the Thunderbox Feasibility Study Stage 1

Stage 1 is forecast to deliver A$195 million of free cashflow over an initial 4.5 year mine life that
endorses the companys decision to acquire of the Thunderbox Operations in January 2014 for a
total cash consideration of A$23 million and a royalty payment of 1.5% capped at A$17 million
(which has been factored into the free cashflow generation of A$195 million).
Key Assumptions used for the Feasibility Study were:
Gold price of A$1,500/oz;
Diesel Fuel of $0.90/L net of rebate;
Mining dilution of 10% and ore loss of 2%;
Processing life of mine recovery of 93.3%;
Royalties including the WA State Government Royalty of 2.5% and Norilsk Royalty of 1.5%
which is capped at $17m;
Work rosters are a combination of 8 days on 6 days off and 2 weeks on 1 week off;
Direct mining costs from proposals received from vendors and existing CDO data.
The Board feels that this was an ideal time to develop a new project in Australia, with a falling
Australian dollar and diesel price, high open pit mining equipment availability, and tightening in the
labour and contracting markets making for an ideal development environment. The timing of the
development also fits in perfectly with the completion of open pit mining at Whirling Dervish which
will allow a smooth transition for our open pit mining workforce to Thunderbox.
The Saracen Board will be making an ongoing economic assessment of the prevailing spot price up
to August 2015 before pre-strip mining commences at Thunderbox, and before significant
expenditure is incurred, to ensure that any potential significant fall in the spot gold price doesnt
result in an unacceptable financial return being achieved. This is consistent with the conservative,
risk adverse approach the Saracen Board has taken in recent years as demonstrated with the
robustness of our existing operations at CDO.

Production Profile Stage 1

The production profile and AISC for the first 4.5 years of processing from the Thunderbox
Operations are shown in Figure 1. Hedged production versus unhedged production is shown in the
bar graph. The hedge book delivery timetable is detailed in Schedule 1.
Figure 1 also shows the average Stage 1 life of mine AISC of A$1,032/oz. Saracen will adopt the
same cash cost reporting methodology as used at CDO since 2013, whereby cash costs are
reported using an actual cashflow methodology (as opposed to the depreciation & amortisation
method which is commonly used in the industry) as it provides a better reconciliation with actual
cashflow movements, thereby providing an increased transparency of costs to the market. No
accounting adjustment for ore stockpile movements or deferred waste is applied.
The impact of the Zone C pre-strip commencing at the same time as processing commences in July
2016 can be clearly seen with actual (cashflow) AISC in FY2017 above the average LOMP AISC as
the 5.8 million cubic metres of Zone C pre-strip for a total cost of A$26.9 million is included in the
AISC during FY2017. Conversely, FY2019 and FY2020 benefit with AISC falling to A$931/oz and
A$706/oz respectively which is consistent with the significant cashflow generation expected in these
years.
The 140,000 ounces of hedging at an average price of A$1,520/oz underpins the initial preproduction capital investment of the early years. In later years, where AISC falls below A$950/oz,
there is a greater exposure to the spot gold price and any potentially upside. However, at a
minimum, our initial capital investment will be protected.

Figure 1: Production profile and AISC for the Thunderbox Feasibility Study Stage 1

Development Timetable
First gold production is planned for July 2016 following 11 months of mining pre-strip in Zone A
starting in August 2015 and utilising open pit personnel from Whirling Dervish (CDO) that is due to
be completed in June/July 2015.
Thunderbox Operations
Feasibility Study - Stage 1
Development Decision

FY2015
Mar Q Jun Q

Sep Q

FY2016
Dec Q Mar Q

Jun Q

Sep Q

FY2017
Dec Q Mar Q

Jun Q

Approvals
Implementation & Mobilisation
Pre-Strip Mining - Zone A
Mining - Zone A
Pre-Strip Mining - Zone C
Mining - Zone C
Plant Refurbishment
Commissioning
Mill Production
Feasiblity Study - Thunderbox UG
Feasiblity Studies - Satellie Pits

Figure 2: Thunderbox Development Timetable

Approval processes are nearing completion and a dedicated project implementation team has been
established for the development of the project. Lee Stephens will lead the Thunderbox
implementation team. Lee led the development team during the resumption of mining at CDO during
2009 and has since held the roles of Mining Manager and GM-Operations at CDO until he was
seconded to Thunderbox in February 2015. Wayne Heedes will be responsible for the processing
plant refurbishment having performed the same role in 2009 at CDO and has since held the role of
Processing Manager at CDO until being seconded to Thunderbox in July 2014.
Gold Hedging & Project Loan Facility
Saracen has accepted a committed, credit-approved offer from Macquarie Bank Limited (MBL) for
a Gold Hedging programme and Project Loan Facility (together Finance Facilities) consisting of
140,000 ounces of forward hedging at an average price of A$1,520/oz and a Project Loan Facility of
A$33 million. The hedging programme has been executed and the delivery timetable is detailed in
Schedule 1.
The Thunderbox development is planned to be funded from existing cash reserves and operational
cashflows from our Carosue Dam Operations, with the MBL debt facility available to the Company
primarily as a standby facility or for any growth (organic or acquisition) opportunities that may
present themselves in the near term. The Thunderbox development is therefore fully funded.
The committed forward hedging programme is modest and underpins the Development Capital. It
accounts for only about 25% of the stated ore reserves for the Thunderbox open pit development.
Future production from a potential Thunderbox underground mine and satellite open pits remain
unhedged.

Thunderbox Underground Stage 2

Saracen has prepared, but not completed, a Pre-Feasibility level study (PFS) on the potential to
develop a large scale underground mine (Stage 2) on the Thunderbox deposit following the
completion of open pit mining (Stage 1). The key Thunderbox underground metrics are:
Thunderbox

Units

UG

Underground Mine
Ore Mined

5,160,000

Grade

g/t

2.00

Contained Gold

oz

329,439

Recovery

93.5%

Recovered Gold

oz

308,055

Table 7: Production profile and AISC for the Thunderbox Feasibility Study Stage 2

A Core and Shell underground mining method was selected for the PFS over various other bulk
underground mining methods considered, including sub level caving and shrinkage stoping. The
Core and Shell method is amendable to the Thunderbox orebody geometries, and would enable
large stopes to be extracted during the initial years to reduce excessive upfront capital requirements
in establishing a sub level caving operation, but with stoping production rates equivalent to caving,
and with significantly lower dilution.
Table 8 shows that the Core and Shell mining method can facilitate underground mining costs of
approximately A$36/t. Total operating costs per ounce would be approximately A$61/t. Note that the
physical parameters in Table 8 are based on mineral inventory only and are not ore reserves.
Unit Costs

Units

UG

Underground
Ore Mining

5,160,000

Operating Mining Cost

A$m

186.8

Mining Cost per tonne

A$/t ore

36.2

Processing & Business Services

Ore Milling
Processing Costs

5,160,000

A$m

111.3

A$/t ore

21.6

A$m

16.6

A$/t ore

3.2

Mining Cost per tonne

A$/t ore

36.2

Processing Costs per tonne

A$/t ore

21.6

Business Services per tonne

A$/t ore

3.2

Total Costs per tonne

A$/t ore

61.0

Revenue per tonne (recovered)

A$/t ore

89.6

Processing Costs per tonne

Business Services
Business Services per tonne
Total

Table 8: Production profile and AISC for the Thunderbox Feasibility Study Stage 2

Table 9 shows that approximately 308,000 ounces of gold could be produced at an average AISC of
A$1,074/oz over a 4 year mine life. A$97 million of free cashflow could be generated from a
potential underground operation assuming a gold price of A$1,500/oz, with production potentially
commencing in FY2021. Combined with the free cashflow generation forecast from Stage 1 of
A$195 million, circa A$292 million could be generated over an 8 year mine life (Stages 1 & 2).
Financials

Units

UG

Underground Mine
Recovered Gold

oz

308,055

Gold Price

A$/oz

1,500

Revenue

A$m

462.1

Capital Costs

A$m

34.3

Cash Costs

A$m

314.7

Royalties

A$m

16.0

Total Costs

A$m

365.0

Free Cashflow

A$m

97.1

Cash Costs

A$/oz

1,022

AISC

A$/oz

1,074

Total Costs (inc Capital)

A$/oz

1,185

Cash Costs per ounce

Table 9: Production profile and AISC for the Thunderbox Feasibility Study Stage 2

Figure 3: Production profile and AISC for the Thunderbox Feasibility Stages 1 & 2

10

A Full Feasibility study on the Thunderbox underground mine is planned to be finalised over the
remainder of 2015. The next steps with the FS include:
Updating the resource estimation based on the additional drilling recently conducted within,
or in close proximity to, the underground mining inventory;
Additional infill and/or extensional drilling as required to improve the confidence in the
underground resource and/or to potentially increase the underground inventory at depth;
Convert the underground mining inventory into an ore reserve;
Finalise geotechnical studies and recommendations based on the most recent diamond core;
Finalise the underground mining method;
Update the underground mine design and schedule;
Update the financial model with FS level of accuracy cost inputs;
Integrate the underground mining schedule with the Thunderbox LOMP.

Figure 4: Long section showing the proposed Thunderbox underground mine relative to the Stage 1 open pit.

11

Figure 5: Long Section of the potential Thunderbox underground mine

Figure 6: Isometric view of the potential Thunderbox underground mine (looking North West)

12

Satellite Open Pits Stage 3

Various opportunities have been identified to extend the Project life beyond Stages 1 and 2,
including open pit extraction from the Bannockburn, Mangilla and Rainbow deposits.
Saracen has commenced, but not completed, a Pre-Feasibility level study on the Bannockburn open
pit and scoping studies on both Mangilla and Rainbow. Feasibility studies and ore reserves are
planned to be published for all three satellite deposits by June 2016.
Table 10 below details the mining and processing mineral inventory for Stage 3 (note these are not
ore reserves). A total of 3.37 million tonnes of ore for 152,000 ounces of production could potentially
be extracted from the mining of 8.9 million cubic metres of material at an average strip ratio of 5.7.
Stage 3

Units

Bannockburn

Mangilla

Rainbow

Total Stage 3

Open Pit Mining

Total Mining
Specific Gravity

BCM
SG

5,695,000

1,982,000

1,263,000

8,940,000

2.7

2.3

2.2

2.5

Total Mining

15,352,000

4,558,600

2,778,600

22,689,200

Waste Mining

12,895,000

4,160,600

2,258,600

19,314,200

Ore Mining

2,457,000

398,000

520,000

3,375,000

Strip Ratio

w:o

5.2

10.5

4.3

5.7

2,457,000

398,000

520,000

3,375,000

Processing
Ore Milling

Grade

g/t

1.32

2.07

1.28

1.40

Contained Gold

oz

103,995

26,498

21,400

151,893

Recovery

93.9%

95.0%

95.0%

94.2%

Recovered Gold

oz

97,651

25,173

20,330

143,154

Table 10: Mining & Processing physicals for Thunderbox Stage 3 Bannockburn, Mangilla and Rainbow

Table 11 below provides indicative financials for Stage 3. A total of 143,000 ounces of production
can be extracted from the satellite pits at an average AISC of A$1,114/oz. The satellite open pit mill
feed would be blended with underground ore from Thunderbox enabling optimum blending through
the plant and maintaining an average production profile of circa 120,000 ounces per annum.
Stage 3
Recovered Gold

Units

Bannockburn

Mangilla

Rainbow

Total Stage 3

oz

97,651

25,173

20,330

143,154

Gold Price

A$/oz

1,500

1,500

1,500

1,500

Revenue

A$m

146.5

37.8

30.5

214.7

Capital Costs

A$m

2.0

1.0

1.0

4.0

Cash Costs

A$m

102.2

27.7

24.2

154.1

Royalties

A$m

3.7

0.9

0.8

5.4

Total Costs

A$m

107.9

29.6

26.0

163.5

Free Cashflow

A$m

38.6

8.1

4.5

51.3

Cash Costs

A$/oz

1,047

1,100

1,190

1,076

AISC

A$/oz

1,084

1,138

1,228

1,114

Total Costs

A$/oz

1,105

1,178

1,277

1,142

Cash Costs per ounce

Table 11: Financials for Thunderbox Stage 3 Bannockburn, Mangilla and Rainbow
13

The bulk of the production in Stage 3 is from the Bannockburn open pit with an AISC of A$1,084/oz.
A recent drilling program at Bannockburn has been successful in delineating the extremities of the
previous underground workings to provide the resource confidence necessary to consider future
development. Further technical studies will be conducted as part of the planned FS over the next 18
months.

Figure 7: Production profile and AISC for the Thunderbox Stages 1, 2 and 3

Figure 7 shows an 8 year production profile producing in excess of 1.0 million ounces of gold at an
average production rate of 126,000 ounces per annum with an average AISC of A$1,057/oz.
For further information please contact:
Raleigh Finlayson
Managing Director
Email: r.finlayson@saracen.com.au
Competent Persons Statement:
The information in the report to which this statement is attached that relates to Exploration Results and Mineral
Resources is based upon information compiled by Mr Daniel Howe, a Competent Person who is a member of The
Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Daniel Howe is a full-time
employee of the company. Daniel Howe has sufficient experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the
2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore reserves.
Daniel Howe consents to the inclusion in the report of matters based on his information in the form and context in which it
appears.
The information in the report to which this statement is attached that relates to open pit Ore Reserves at Thunderbox is
based upon information compiled by Christopher Burton, a Competent Person who is a member of The Australasian
Institute of Mining and Metallurgy. Christopher Burton is a full-time employee of the company. Christopher Burton has
sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves. Christopher Burton consents to the inclusion in
the report of matters based on his information in the form and context in which it appears.

14

Background Information
The Thunderbox Gold Deposit is situated adjacent to the Goldfields Highway approximately 45
kilometres south east of the township of Leinster in the North Eastern Goldfields of Western
Australia. Refer to Figure 8 below.

Figure 8: Location Map

15

The Thunderbox deposit, which is totally obscured by transported overburden, was discovered
in 1999. Lionore Australia Ltd (later Norilsk) operated the Thunderbox deposit between 20022007, mining and processing some 10.9Mt at an average 2.4g/t producing 806,000 ounces of
gold at an average cash cost of US$290/oz. Subsequent exploration has shown the deposit has
potential at depth and along strike.
Lionore Australia completed a feasibility study in 2001 for the development of its 2.0-2.5mtpa
open pit mining operation. The plan was subsequently implemented and a CIL processing plant,
open pit mine and supporting infrastructure was developed at an estimated cost of A$74M
(2001 dollars).
Infrastructure
The Thunderbox site was well equipped during its previous operating life. All of these facilities
remain on site and include:
A 2.5Mtpa conventional Carbon in Leach (CIL) Processing Plant;
A 268 room village located 3km from the Processing Plant. Amenities include a modern
kitchen and messing hall, wet-mess facility, gymnasium, theatre room, swimming pool,
recreation area, tennis/basketball court and telephone/internet booths;
Airstrip consisting of an unsealed runway located 3km from the village;
Various production borefields, with an initial 2 years of processing water supply being
sourced from existing stored sources in the Thunderbox and Double A pits;
Administration offices, workshops, power generation facilities and fuel storage facilities;
Fixed plant maintenance workshop and warehouse;
Heavy vehicle workshop;
Laboratory & sample preparation area.
Fixed plant includes fuel storage tank, power reticulation and water reticulation. Diesel fuel
storage is provided through a 1.1Ml storage tank, located at the mill site. The Power Station
exists at the Process Plant area and it is planned to re-equip the Power station with dual fuel
engines for power generation.
A 20km gas line spur, owned by Saracen, can deliver natural gas to the power station from the
Goldfields Gas pipeline. The spur has the capacity to deliver approximately 10TJ/day, of which
a maximum of 1.74TJ/day was historically used by Thunderbox and Waterloo under Lionores
ownership. Saracen has entered into an agreement with a third party to operate and maintain
the Thunderbox lateral gas pipeline.
A Telstra owned mobile phone tower is located on site at Thunderbox. Saracen proposes to
utilise this tower for connection to data and communications.
A 2,000m by 30m wide gravel airstrip was constructed in 2001. Part of the initial site
infrastructure works will include remedial works to the airstrip to allow certification of the airstrip.
Once the airstrip is certified, Saracen will seek registration of it with CASA to enable suitable
charter aircraft to operate a commuter service.
Water required for the processing plant is estimated at 3,200-3,800kL/day. Initial process water
supply will be from the accumulated supply in the Thunderbox and Double A open pits where up
to 2Mt of water is currently stored. Dewatering of the Thunderbox pit will commence prior to

16

plant operations and some 1Mt of water will be stored in Double A pit. There exists several long
term, high capacity water sources within the Project area, the most notable being Bannockburn.
The existing Tails Storage Facility comprises two circular paddock type cells which operated
from 2002 until 2007. Engineering consultants have been engaged to prepare a design to uplift
the two existing cells to accommodate up to 14Mt of waste material. This represents sufficient
storage capacity for the initial 5 years of processing.

Figure 9: Thunderbox Processing Plant, Workshop and Power Station

Figure 10: Thunderbox Processing Plant - SAG and Ball mills

17

Figure 11: Thunderbox 268 room Village

Open Pit Mining

The Thunderbox operation will be managed by Saracen and utilise contractors for various scopes
considered non-core business to Saracen, and/or when it is not practical for Saracen to complete
the works as an owner operator where there are savings to be realised by leveraging off specialist
contractors size and related economies of scale. The Project will operate as a Fly In, Fly Out (FIFO)
operation from Perth as it is not possible to draw on a local residential workforce.
The mining operation comprises cut backs on Zone A and Zone C of the existing Thunderbox open
pit. Mining will employ a conventional open pit excavator truck fleet with ancillary plant consisting of
tracked bulldozers, wheel loaders, wheel graders and water carts. The ancillary fleet will prepare
drill and blast areas, maintain active digging areas, mine roads and waste dumps. The mining
equipment, together with the ROM loader, will also maintain the plant site area and other access
and service roads.
The feasibility study is predicated on a combination of a 120t, 190t and 350t excavators, matched to
a fleet of 150t payload rear dump trucks. Mining will commence with a cutback on the Zone A open
pit where larger excavators and trucks will be utilised with the excavator fleet size decreasing in
staged increments throughout the mine life. The size of the dump truck unit remains constant
throughout the mine life, with the number required optimised to match the excavator fleet.
Ore will be transported directly from the open pit to the ROM pad for stockpiling. The stockpiled
ROM ore will be used to feed the crusher on a blend set by the processing department. Provision
has been made for finger stockpiles to allow feed blending to optimise plant performance.

18

Figure 12: Isometric view (looking south) of the Thunderbox Open Pit design showing Zone A & Zone C

Figure 13: Long section view of the Thunderbox Open Pit design showing Zone A & Zone C
19

Figure 14: Plan view of the Thunderbox Pit Design showing Zone A & Zone C

20

Figure 15: Cross Section view through Zone A Thunderbox Open Pit Design

Figure 16: Cross Section view through Zone C Thunderbox Open Pit Design
21

Processing
The Process Plant is a conventional Carbon in Leach (CIL) gold plant and is fit for purpose for the
processing of Thunderbox ore. The Process Plant flowsheet is shown in Figure 17. The proposed
refurbishment of the Process Plant is fundamentally a maintenance exercise which will involve
equipment testing, equipment removal and refurbishment and replacement where existing
equipment is unserviceable. Replacement equipment will be of the same type and/or brand where
possible. Tankage will be re-certified as required.

Figure 17: Thunderbox Process Plant Flowsheet

Although generally in good condition, the plant will be cleaned and inspected and, where necessary,
steelwork will be repaired or replaced. Electrical equipment is expected to be serviceable, but
sufficient allowance has been made to replace or repair a proportion of the electrics.
The total cost for the Plant refurbishment has been estimated at $16.3 million. It is anticipated that
the refurbishment will be completed over a period of four months by a dedicated crew supervised by
Saracen. Saracen has experience in completing such refurbishments, having undertaken the same
exercise at Carosue Dam in 2009.

22

Risk Management
A Project Risk Assessment has been undertaken, with the assistance of MYR Consulting. A
comprehensive risk assessment of operational risks and mitigating actions was completed as part of
the Project Management Plan submitted to the DMP for approval to commence operations.
Management Plans such as Emergency Preparedness, Explosives Management have been
completed and the Project is well positioned to take advantage of established systems and
experienced personnel from the Carosue Dam Operations.

Schedule 1 Details of Hedging Contracts

Maturity Date
30/09/2016
31/10/2016
30/11/2016
30/12/2016
31/01/2017
28/02/2017
31/03/2017
28/04/2017
31/05/2017
30/06/2017
31/07/2017
31/08/2017
29/09/2017
31/10/2017
30/11/2017
29/12/2017
31/01/2018
28/02/2018
29/03/2018
30/04/2018
31/05/2018
29/06/2018
31/07/2018
31/08/2018
28/09/2018
31/10/2018
30/11/2018
31/12/2018
31/01/2019
28/02/2019
29/03/2019
Total

Volume (oz)
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
5,000
5,000
5,000
5,600
5,600
5,600
5,600
5,600
5,600
3,500
3,500
3,600
3,600
3,600
3,600
4,300
4,300
4,300
4,300
5,200
5,200
5,200
5,200

Price (A$/oz)
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520
$1,520

140,000

$1,520/oz

23

About Saracen
Saracen Mineral Holdings Limited (ASX:SAR) owns 100% of the Carosue Dam operations, 120 km NE
east of Kalgoorlie, in the South Laverton region of WA, home to many other gold mines and deposits
including Sunrise Dam, Granny Smith, and Wallaby.
Carosue Dams 2.4 million tonne per annum processing plant produced 133,492 ounces of gold in
FY2014 and is forecast to produce approximately 145-155,000oz in FY2015.
Gold production is from the Whirling Dervish open pit mine, supplemented by high grade underground
operations at the Red October underground mine.
As at 30 June 2014, the Carosue Dam Operations Mineral Resources was 4.1 million ounces of gold
and Ore Reserves 0.9 million ounces of gold.
In May 2014, Saracen completed the acquisition of the Thunderbox Operations, located approx. 45
kms south of Leinster in WA. The Thunderbox Operations are on care and maintenance and include
the Thunderbox and Bannockburn gold mines as well as the Waterloo and Amorac nickel mines.
There is also a 2.5 million tonne per annum CIL processing plant and associated infrastructure.
The Thunderbox Deposit was discovered in 1999. Gold production totalled 805,000 ounces when
processing operations ended in December 2007. Thunderbox produced at an average cash cost of
US$290/oz with a cash cost in the final year of operation of US$481/oz.
As at 30 June 2014, the Thunderbox Operations Mineral Resources stands at 2.8 million ounces of
gold while Ore Reserves were at 0.8 million ounces of gold.
As at 30 June 2014, total Mineral Resources for Saracen stands at 6.9 million ounces of gold and 1.7
million ounces of Ore Reserves.
The Waterloo and Amorac deposits have Mineral Resources of 15,000 tonnes of contained Nickel.
For the location of Saracens projects, refer to the map below.

24

Saracens Thunderbox & Carosue Dam Operations

25