Great Western Mining (AIM:GWMO) Mill Construction Update

Great Western (AIM – GWMO, Euronext Growth – 8GW) provides the following update on construction of its mill for producing precious metals in Mineral County Nevada.

·    Process equipment assembled adjacent to site and ready to install

·    Foundations laid and concreted with retaining walls erected

·    Water bore holes and water monitoring wells concreted and complete

·    Access roads and laydown area complete

·    Final concrete pour to meet environmental standards waiting on contractor

·    Assembly and testing of plant will follow final concrete pour

·    NDEP site visit for provisional inspection this week

·    NDEP approval likely to be delayed by at least two months

·    Project costs within budget

PROJECT DESCRIPTION

Great Western and its partner Muletown Enterprizes LLC (‘Muletown’) are constructing a mill at Sodaville, close to Mina in Mineral County, Nevada, to produce gold and silver concentrates from spoil heaps left over from historic gold and silver mining operations on claims held by the Company, together with tailings, unprocessed stockpiles and in due course newly-mined shallow ore.  When this plant is operational, it will transform Great Western from a pure mineral exploration company into combining exploration, appraisal and production. The interests of Great Western and Muletown are held through equal shares in a newly created vehicle, Western Milling LCC (Western).  Great Western has fulfilled the terms of an earn-in to this venture and is a 50% interest holder in Western.

The mill is being constructed on a naturally formed rock feature, adjacent to and within easy access of a major highway, which has been used for milling operations in the past.  The mill site is on private land owned by Muletown which it is leasing it to Western for a nominal rent.  Mains power is available and there is an abundant supply of water in the immediate area.  The first phase of production is a simple gravity separation plant for which a production permit application was lodged with NDEP (Nevada Department of Environmental Protection) early this year.  A planning permit for the mill has already been approved but production start-up is dependent on receiving NDEP consent.

In a second phase, tailings will be processed through an encapsulated chemical leaching plant for further recovery of precious metals.  As this second phase will be more environmentally sensitive than gravity separation, the joint venture aimed to speed up the application process by applying only for gravity separation in the first instance, with a view to achieving an earlier start-up date for first production.  Once the gravity permit has been received, an application for chemical leaching will be filed with NDEP.  In the meantime, the plant has been designed and is being built to cater for chemical leaching so that the second phase, when approved, can be brought on production with minimal delay and minimal additional cost.

Under the joint venture arrangement, Muletown is not only providing the mill site at a nominal rent but also virtually all the equipment needed for the milling plant from its own extensive inventory, together with day-to-day supervision of plant construction and operations.  The main items that have been provided by Muletown are a jaw crusher, a conveyor belt, a rod mill, hydrocyclones, spirals, generators, water tanks, a shaker table and a near-site laboratory, together with numerous smaller items.  Some of the main items, such as the jaw crusher and the shaker table, are materially oversized and lend themselves to an expanded project in the future.  Great Western is funding (1) site construction and (2) upgrading/modifying and installing the mill equipment for use on site.  Great Western’s budget for this phase is not thought likely to overrun.

CURRENT STATUS

To meet environmental requirements, the final concrete pour cannot be carried out piecemeal and requires a continuous pour with several concrete mixer trucks operating in tandem, the closest contractor being a 2-hour drive from its base to the Western site.  Due to high construction  demand in the area and a scarcity of local contractors, it has not so far been possible to organise this final pour except at an unacceptable premium to normal market rates.  Accordingly, Western has renovated and commissioned a concrete plant on site which it has now used to lay foundations and complete groundwork.  When a contractor is available for the final part of the job, Western’s own plant will supplement this operation and reduce the number of external truck loads required.  At present there is no agreed date for the operation but it is a very high priority and will be carried out as soon as it can be arranged.

When a production application was submitted to NDEP, the indicated turn-round estimate for receiving a permit was six months and finalisation was estimated to be this month.  However, NDEP has recently advised that a heavy workload and staff shortages will delay this by at least two more months.  The additional time will be well used to complete the project in the most effective manner.  NDEP will  be carrying out a provisional site inspection this week.

Great Western Chairman Brian Hall commented:  “Delays are always disappointing but in this case have been beyond the Company’s control.  All the ingredients are in place to move forward and the Western Milling joint venture remains an exciting project and a top priority for the Great Western.  Costs are being carefully controlled and we plan to be ready for first production by the time regulatory approval has been secured.  We cannot guarantee the timing of this approval but our aim is to be on production this year”.

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