Rockfire Resources says a preliminary scoping study has returned positive results for a small-scale, open-pit mining operation at the company’s Plateau gold deposit in North Queensland.

The study indicated the operation would achieve a cash flow ranging from $6.8 million to $19.4 million, based on a spot gold price of $2220 ($US1718) per ounce.

The company recently announced a 515 per cent increase in gold ounces at the project to more than 200,000 ounces of gold.

Multiple targets within the proposed pit outlines at Plateau are yet to be drilled and the scoping study identified numerous opportunities to increase gold ounces with additional shallow drilling, Rockfire said.

“We are very pleased that this preliminary scoping study has returned results indicative of a small-scale, open-pit operation, delivering a range of net positive cash flow outcomes,” chief executive officer David Price said.

“At an early stage of a project’s exploration history, it is prudent to focus on the possibility for eventual economic extraction and a positive result at this stage is a very significant achievement and a promising start for Plateau.

“As more work is completed, the understanding of the financial and operational parameters of a project become apparent and more confident. With numerous opportunities identified by the study for further drilling, management is excited by Plateau’s growth potential to improve the economics to achieve a larger production profile.”

Related: Rockfire on a roll at Plateau gold deposit

Plateau is within Rockfire Resources’ Lighthouse tenement area about 50km south-east of Charters Towers.

The scoping study only covered ore within the top 70m of ground, although ore grading up to 16.9 g/t gold has been intersected more than 400m below surface.

Scope to improve project economics as exploration continues

The company said there remained significant potential to increase the economic outlook of the project based on continued exploration success at depth.

Ore would be processed at one of the processing plants within commercial trucking distances of Plateau, keeping the cost of bring the operation online to a minimum.

Metallurgical test work will form part of the next drilling phase to provide important information regarding the expected metal recovery from processing.

“Work required in the next exploration phase includes metallurgical test work, infill drilling to close gaps in the drilling pattern and extension drilling to test areas within the pit outline with little or no drilling,” Mr Price said.

“Only five holes have been drilled into the target zone at 400 m below surface and these holes have all been successful, intersecting 16.9g/t gold, 2.46g/t gold, 9.3 g/t gold, 3.53 g/t gold and 5.03 g/t gold, respectively.

“There are also multiple, shallow exploration targets surrounding Plateau which are within 250m of the designed pit outline.

“Rockfire intends to drill these targets and any success from this drilling would be expected to add ounces to our JORC resources. Management is confident that the input parameters for the project can be improved on multiple fronts and work over the next six months will be aimed at increasing resources.”