Havilah Resources Limited: Portia Gold Mine Update

Adelaide - Havilah Resources Ltd. (ASX:HAV) is pleased to report that it has received approval from the Department of State Development (DSD) for mining the southern and northern extensions at Portia. This will allow the 120 metre southern cutback to immediately proceed in accordance with the MOU signed with our mining partner, Consolidated Mining and Civil Pty Ltd ("CMC"), and extend the Portia mine life by at least another twelve months (refer to ASX announcement 24 November 2016).

Havilah compiled the required documentation, which required a number of substantial consultant's reports, within 3 months. DSD handled the approval in a very prompt and efficient manner meaning that ore mining and processing will be able to continue without break.

Highlights

- Approvals received for mining southern and northern extensions at Portia.

- Channel sampling of southern extension mineralisation in pit wall returns 56 m @ 7.1 g/t Au.

- Saprolite gold ore is being mined from the current pit floor to maintain continuous processing.

- Processing plant is being optimised to increase ore throughput.

In the meantime, Havilah has been conducting strategic drilling campaigns on the southern extension gold mineralisation and in the floor of the open pit when accessible. Conventional gold assay results in general have been encouraging from this drilling, with indications of gold mineralisation mostly where expected. Additionally, the new exposures of the saprolite bedrock gold mineralisation have been channel sampled in the southern wall of the open pit, and sampled by trenches in the pit floor, with similar encouragement.

Havilah is progressively washing all samples that show anomalous conventional gold assay results. The washed assay results are likely to be more reliable as they use a much larger sample size and the methodology applied provides limited opportunity for error, as explained in an earlier ASX announcement of 4 November 2016, and in a Question and Answer video at:
http://www.youtube.com/watch?v=PyFN1cq9T4A

To date complete publishable wash sample results are only to hand for the south pit wall channel sampling and show a wide zone of comparatively high grade gold mineralisation as follows : 56 m @ 7.1 g/t (uncut). Conventional fire assays of the same zone are confirmatory, though of lower average grade : 56 m @ 4.4 g/t (assay top cut 30g/t)

These results correlate with high grade gold intersections reported from adjacent drilling in the pit floor : eg drillhole PTAC 244 : 23 m of 6.8 g/t Au (refer to ASX announcement of 4 November 2016), and in the southern extension mineralisation that extends behind the sampled south pit wall eg drillhole PTAC 232 : 30.5 m of 39.3 g/t Au (refer to ASX announcement of 26 August 2016).

It is evident from the photograph above that the individual 6 m sample assays show considerable variability and the typical patchy high grade gold mineralisation that is characteristic of the Portia deposit. Havilah's mining experience to date indicates that there is normally appreciable coarse gold in this type of saprolite material, which will be recovered in the gravity plant.

Havilah is still working to generate a complete set of washed assay results for pit floor drillholes and consequently no resource estimates are possible at this stage. However, based on conventional assay results and processing experience Havilah considers that economic grade saprolite gold mineralisation is likely to continue for at least another 20 m below the current pit floor. This saprolite material will continue to be mined when required to maintain ore stockpiles on the ROM pad and so maintain gold production until such times as additional new ore is accessible from the southern cutback.

Given that there is adequate medium grade saprolite material available, the current focus is on increasing ore throughput and gold production. The initial plant throughput target was 100 tonnes per hour, and this has been achieved with the trommel and log washer operating in combination according to the original design. While the log washer is well suited to recovery of gold from clayey material, it has proven to be inefficient for recovery of coarse gold. The trommel on the other hand is well suited to disaggregating the coarse gold from the clayey saprolite host material, but operating on its own is unable to achieve the desired 100 tonnes per hour throughput. Accordingly, the decision was made by CMC and Havilah to acquire a second used trommel, which is now being rebuilt and customised to suit the Portia saprolite material in CMC's Broken Hill engineering workshop. This trommel is scheduled to be commissioned in mid-February and should allow the throughput target to be met. Other options to modify or replace the current trommel will then be considered to further boost saprolite ore throughput.

Havilah Managing Director, Dr Chris Giles, commented: "Our first opportunity to channel sample the open pit south wall has returned some promising high gold grades over a considerable width, which confirms nearby high grade drilling results. "Given that gold grades are quite variable, and we are dealing with often coarse nuggetty gold, caution is required in extrapolating these results without detailed and extensive sampling by drilling, trenching and channel sampling. "However, our mining and processing experience to date, plus our drilling results from the southern extension, gives us no cause to doubt that these gold grades will ultimately be reflected in our gold recoveries. "The good news is that we have sufficient saprolite gold ore ahead of us to mine and our processing plant is not likely to run short of ore in the foreseeable future. "Our focus now is how to ramp up gold production and we are addressing this with the new trommel and various other improvements to the processing plant with CMC's assistance.

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To view referenced ASX releases, please visit:
http://www.asx.com.au


About Havilah Resources Ltd:

Havilah Resources Ltd. (ASX:HAV) has successfully financed and developed its first gold mine at Portia in north-eastern South Australia, which is a high margin operation producing a steady cash flow. It plans to follow on with two copper-gold developments that can potentially support an initial production of at least 34,000 tonnes of copper and 105,000 ounces of gold annually. This is underpinned by a JORC minerals resource inventory of over 900,000 tonnes of copper and 2.4 million ounces of gold.



Contact:

Havilah Resources Ltd.
T: +61-8-8338-9292
F: +61-8-8338-9293
E: info@havilah-resources.com.au
www.havilah-resources.com.au