AMN - SOUTH AFRICA: $2 million to get Galaxy running again

Galane Gold has approved a $2 million capital expenditure program required for the first phase of recommencement of production at its Galaxy gold mine in South Africa, up to a target of 60,000 oz/year.

The company anticipates that the first phase will take six months to complete and it will be funded from internal cash flows primarily from the company's core operation in Botswana.

The first phase of the capital project started in July 2016 and is designed to refurbish existing infrastructure and upgrade the processing facility to take production to 18,000 oz/year. The first phase covers the following steps:

-          Refurbishment of the existing 15,000 tonnes/month processing plant which will include the installation of a new crusher, remedial work to the float section, a new gravity separation section and re-establishment of the elution plant

-          Construction of a new 25,000 tonnes/month CIL tailings retreatment plant within the current footprint of the existing processing plant

-          Recommencement of underground mining at Woodbine, Agnes and Ivy on 17 level using conventional shrink stope mining

-          Commencement of tailings recovery by sluicing at the Woodbine and Hostel dumps.

The company will use positive cash flows from its other operations and as a result expects current cash reserves to remain as currently reported during this six month period. The company is forecasting that it will produce gold at Galaxy at the end of the fourth quarter of 2016.

Galane Gold CEO Nick Brodie says: "The second major goal for Galane this year is to recommence production at Galaxy. Having achieved our first goal to commence mining in the main ore body at Tau, management of the company can now concentrate on the implementation of the first phase of this project at Galaxy. This first phase forms a core part of our long-term strategy to target production of over 60,000 oz/y at Galaxy.

“It is an exciting time for Galane as we start to see the fruition of all the hard work we have put in over the last five years to reshape the company into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles."

The Galaxy mine is approximately 8 km west of the town of Barberton and 45 km west of the provincial capital of Nelspruit (Mbombela), in the Mpumalanga Province of South Africa and covers an area of 5,863 ha. The mine comprises 21 east-west trending gold bodies and four prospects at 600 – 2000 metre depth.

Currently, more than 75 historical adits exist within the mining area, as well as tailings storage facilities comprised of previously mined and processed material. Galaxy's existing processing plants are in need of refurbishment and consist of a south plant where crushing, milling, flotation, elution and smelting take place, and a north plant where biological oxidation and leaching of flotation concentrate takes place. The south plant is designed to have a total run of mine capacity of some 15,000 tonnes/month and can be expanded through refurbishment and the introduction of larger mills and flotation equipment.

Galane Gold is an un-hedged gold producer and explorer with mining operations and exploration tenements in Botswana and South Africa.

www.GalaneGold.com,

News courtesy of International Mining