Camel Creek Trend

The Camel Creek Trend is located 5kms south of the Blue Spec Shear and runs broadly parallel to it over 30kms. The mineralisation on the trend is quite distinct from the mineralisation found on the Blue Spec Shear. It does not occur along a single shear but is hosted by stock work and sheeted vein systems in fault controlled settings. Gold mineralisation is near surface and characterised by medium grades (2-5 g/t) but also exhibits high grade (>5g/t) plunging shoot components. No stibnite occurs on the Camel Creek Trend.

Currently, the trend hosts four near surface deposits:

  • Roscoe's Reward (20,000 oz @ 2.1 g/t Au)
  • Round Hill (8,000 oz @ 4.3 g/t Au)
  • Junction (8,000 oz @ 3.4 g/t Au)
  • Little Wonder (10,000 oz @ 1.9 g/t Au)

 

Camel Creek Joint Venture with Millennium Minerals

Northwest has entered into a 50/50 joint venture with Millennium Minerals Limited (Millennium) (ASX: MOY) under which ore from Northwest’s Camel Creek Trend gold deposits will be mined and processed by Millennium.

Millennium will manage the joint venture, which will not require any capital contribution by Northwest, and will process the joint venture ore through its Golden Eagle treatment plant, which is currently under construction.  Joint venture mining will commence in early 2015.

The joint venture will underwrite the transformation of Northwest from an advanced explorer into an emerging gold producer leaving Northwest free to focus on the development of its core Blue Spec Shear high grade gold-antimony deposits into one of the highest grade gold underground mining centres in Australia.

Background

Millennium has completed financing of its Nullagine Gold Project and is currently constructing the 1.5 MTPA Golden Eagle treatment plant and associated infrastructure to produce around 80,000oz of gold per year over an initial 7.5 year mine life.  The plant is expected to commence production in Q3 2012.  Millennium’s project comprises its main Golden Eagle pit and multiple satellite pits around the Nullagine goldfield, including the Camel Creek Trend which it shares with Northwest.

The Camel Creek Trend open pit deposits are not part of Northwest’s Blue Spec Shear development plans because of their difference in grade and mineralisation style to the Blue Spec Shear deposits, however they are a natural fit with Millennium’s project as they share the same geology and mineralisation style as Millennium’s satellite deposits located along the Camel Creek Trend.

Joint venture metrics

Northwest’s Camel Creek Trend deposits (Junction, Little Wonder, Round Hill and Roscoe’s Reward) have a total current JORC resource of 46,000 oz @ 2.7 g/t Au.  Northwest considers that there is excellent potential to increase the size of the current JORC resources for the joint venture deposits and a step out drilling programme to test extensions to each of the deposits is planned for late 2011. 

Following completion of the planned drilling programme and revised JORC resource estimate will be prepared and maiden reserve estimates for the joint venture deposits are expected in Q1 2012.

Under the terms of the joint venture, further Northwest deposits can be added to the joint venture with Millennium’s agreement and Northwest has a number of prospects in the Camel Creek Trend zone ready for follow-up drilling.

Millennium has estimated that average C1 cash costs for its project will be approximately $757 per oz.  Given the expected joint venture synergies, Northwest anticipates joint venture C1 cash costs would be in line with Millennium’s estimated project cash costs resulting in significant profits to be shared equally with Millennium subject to the prevailing gold price at the time of production.

Exploration targets

Northwest has identified and prioritised numerous promising exploration targets along the Camel Creek Trend using a combination of HYMAP and extensive soil sampling and structural mapping.  Successful follow up drilling at prospects such as Federation and Corsair have demonstrated that a number of these exploration targets have the potential to be converted into JORC Mineral Resources with further drilling which Northwest intends to undertake.