Genesis Minerals

Ulysses West Gold Project

August 2016 – December 2016

LOCATION

Leonora
Western Australia

SERVICE AREA

Contract Mining
Productive Equity Model

SMS SERVICES

• Maintenance
• Contract Mining
• Drill & Blast
• Mine Development

PROJECT OVERVIEW

Genesis Minerals Limited (ASX: GMD) is an Australian gold exploration and mine development company with high quality projects located in Western Australia’s premier gold districts. This includes the Ulysses Gold Project, 30km south of Leonora, the Barimaia Gold Project located 10km South East of Mt Magnet; and the Viking Gold Project located in the Albany-Fraser range province. The Company is focussed on cash-flow, exploration and growth underpinned by projects located in Tier-1 jurisdictions. At the Ulysses Gold Project, Genesis is targeting a long-life standalone underground mining and processing operation.

SCOPE OF WORKS

Genesis and SMS Innovative Mining Pty Ltd entered into a Mining Alliance Agreement to develop and mine the Ulysses West open pit which included haul road construction, mobilisation of equipment, site establishment, drill and blast, and load and haul of waste and ore.

SMS provided a mix of equity and debt funding to support the development of the initial open pit at Ulysses West. In turn SMS became a major shareholder of Genesis Minerals to support its future growth and objective to develop the larger Ulysses underground.

The initial investment by SMS consisted of the subscription by SMS for shares in Genesis at $0.025 per share, to the value of $2.5 million. Genesis issued shares to SMS until the full satisfaction of invoiced amounts as per the mining schedule to an aggregate of $2.5 million. Once the aggregate amount of $2.5 million had been reached, all further invoiced amounts were treated as an interest free loan from SMS to Genesis which continued to accrue until repaid out of cash flow generated by Genesis from gold sales.

This model demonstrates the strength of the SMS offer and ths ability to offer flexible contract models. SMS and Genesis continue to jointly investigate opportunities to develop other open pit mining operations.

KEY PLANT AND EQUIPMENT USED

Hitachi EX1200 Excavator

Caterpillar D10R Dozers

Hitachi ZX470 Excavator

Caterpillar 16H Grader

Caterpillar 777F Dump Trucks (phase 1)

Caterpillar 773 Water Truck

Bell B50D Artic Dump Trucks (phase 2)

Caterpillar 966H Wheel Loader

tonne of waste mined

tonne of high grade ore mined

PROJECT STATISTICS

  • LTI/MTI free – positive safety culture
  • Over 76,000t of high grade ore mined in 4 months
  • Over 1,280,000t of waste mined in 4 months
  • First ore delivered within 5 weeks of mining commencement.
  • Significant free cash flow generated for Genesis Minerals

SOLUTION / PROJECT OUTCOMES

Key benefits realised by entering into the mining alliance agreement between Genesis Minerals and SMS Innovative Mining included:

  • the provision of a strong, low risk funding solution for the commencement of mining by Genesis Minerals at the Ulysses West pit
  • the provision of support and expertise from SMS who in turn has a strong track record in mining similar sized operations
  • On completion on the Ulysses Open Cut, Genesis minerals had significant cash reserves to execute its exploration strategy and drive further growth of the business.

Since the successful completion of the Ulysses Open Cut, Genesis Minerals has experienced rapid and sustained exploration success at the Ulysses project. Genesis Minerals are on track to develop a long term underground mining operation at the project.