To view MCO's 2011 Annual Report click: Morning Star Gold - Annual Report 2011 (Print Version) (1Mb pdf)

To view Mike Botting's AGM Presentation click: AGM 2011 - CEO Presentation

## For MCO's other Latest ASX Releases (see on this website 'Investors' 'ASX Latest' '2011') and see below;

1. Mining Resumes 3rd Nov 2011 - Click here: ASX_Release_-_Mining_Resumes_3rd_Nov_2011.pdf

2. MCO's substantial holder Chillee adds 4M shares to its holding at a cost of ~$1.3M: Change_in_Substantial_Holding_604_Notice_-_Chillee_31_Oct_2011.pdf

3.  Two Boardroom Radio general PR videos for an overview of the operations by the CEO & Chairman.

Video 1: “Commencing Production & Targeting Growth at Morning Star” www.brr.com.au/event/86918

Video 2: “The Future of Morning Star Gold” www.brr.com.au/event/86920

4. Progress Report dated 12th Sept. 2011 - Winder installed & gold production looming: Click here for Progress Report

5. Boardroom Radio Webcast by Mike Botting CEO - Hit this link: Mike Botting Webcast - August 2011

6.  Recent Director Buying Announced 17 May 2011 - Chairman buys 767,436 FPO shares on market at a cost of $230,238.88

7.  Two YouTube Videos on MCO - "The Secret Prospector" gives an overview of MCO's operations & long term strategy. Watch them at the following two links:

The Secret Prospector #1
The Secret Prospector #2

8.  MCO's initial mining plans and project timelines

MCO's initial mining plans and project timelines are outlined in the "MEDIA - Presentations" area of this website. The company produced its first ever gold in Q1 2011 and is looking forward to a more stable output of production in the second half of this calendar year. This is the first gold production in over 50 years for the Morning Star Goldmine and Woods Point. The overall mining plan is to re-enter existing stopes in shallow, dewatered, partially developed areas of the mine, where channel sampling over 2007-09 proved high grade ore still exists in economic tonnages in remnant areas. But it's not only a remnant mining story as at least two new areas of mineralisation have been discovered since 2008 drilling at depths around 275 metres from surface. These two mining zones are expected to be economic for milling today and are called respectively the 'Maxwell' and 'Kenny' zones. Please see the following diagram for a basic view of the Morning Star Goldmine's present focus zones in cross-section (Sky-blue elipses denote areas being developed for production)

9.  Milling, Processing, Power, Safety and Haulage Upgrades

The company intends to mill its own gold via an on site gravity gold plant / mill (GPP) which has been designed and constructed by Gekko Systems of Ballarat Victoria. Commissioning of the GPP began in December 2010 leading up to the first (offsite) Dore gold pour in Q1 2011. The GPP is designed to be scaleable and cater for a potential future increase in ore throughput. It is initially designed to process 10 tonnes of ore per hour. MCO expects between 85 and 93% of its gold to be free milling and won via purely gravity methods in the new GPP and the design caters for gold Dores to be poured onsite. As MCO processes lower grade development ores (H1 2011), it has discovered that concentrates are too sulphide rich to pour gold onsite so has delivered concentrates to two parties for testing and gold extraction. One is a roasting / smelting and one is a leaching or 'bottle rolling' to discover the most economic and effective way to get 100% recovery from concentrate. Shipping concentrates offsite also provides a more secure environment and is more OH&S friendly in the gold room. Decisions on upscaling GPP throughput will be made as in-mine resources continue to be deliniated and any in-situ gold pour via smelting or other means will occur after analysis of higher grade ores expected to be through the mill late in calendar 2011. This co-incides with implementation and compliance of MCO's new hi-speed winder, which is designed to move between 2-3 tonnes from 310 metres depth at ~4 metres per second. The new hi-speed winder implementation and use will be a significant landmark for the Morning Star Goldmine as makes a safer and more economic use of haulage (both men and ore). The new winder is state of the art in every way and offers significant upscale to current haulage operations. The hi-speed winding system is expected to be fully operational by Q4 2011.

Please see below for a flow diagram of MCO's onsite gravity processing plant (GPP)

10. Brief selection of cross-sectional graphics of Morning Star Goldmine in current areas of mining and development focus

 

# Cross-Section of Morning Star dyke showing upper area of ore body currently dewatered

 

# Diagram of stope edge assays for 'Dickenson Zone (~90m - 120m below surface) - grade ore present

 

# Cross-Section of the Burns Reef zone above Whitelaws (~165m beneath surface). Red dots = High Grade assays

11.  Metallurgical Study - Pre-feasibility study on milling options undertaken 2008

An initial program of three 100–150Kg composite samples to test Morning Star mine ore-grade material for ROM metallurgical recovery and grade factoring was processed in the 2007/08 by and independent lab (Ammtec of W.A.). Met testing since this time have also been carried out by ALS and Gekko in Victoria. Composite balances of representative ROM material from the same bulk sampling was sent to Gekko in Ballarat for pre-feasibility studies on underground gravity plant for location at the Morning Star mine. The bulk samples collected were representative of medium to high-grade laminated quartz vein ore and stock-work/breccia vein ore commonly found in the mine. The metallurgical testing has enabled MCO to better analyze the type, size and nature of gold distribution, along with the identification of suitable methods for recovery and anticipated gold recovery rates. These tests were carried out on economic ore parcels and do not represent lower or development grade milling scenarios. Typically higher grade ore contained in undiluted quartz reef material will 'mill' better and easier than the harder, lower grade carrying, iron-sulfide rich siltstones and gabbroic material. As such, as has always been the case in high grade narrow vein ore bodies, mining methods are key to economic success as is sorting and lack of dilution of high grade ore parcels.

The results of the Bulk Metallurgical Tests were outstanding in this instance but we stress the 'friendly' (& higher grade) nature of the ores processed. Findings included:

1. Gravity gold recovery was extremely encouraging (between 78% and 93% depending on the crush coarseness).

2. At a coarse 250microns crush, results concluded that the bulk samples returned up to 88% gravity gold recoveries through the first crush with up to 98% total recoveries after a short period of leaching (8 hours) and greater than 99% recoveries after 24 hours.

3. Head Grades from the samples were strong as expected. The grades obtained in the three bulk samples were between 17 grams per tonne and 35 grams per tonne. Samples were blended with lower grade material made up of sediments and dyke to give a more representative 'mining grade' sample analysis.

One of the key aspects of the results to date, is that in any future planned mining operations, Morning Star Gold feels confident that a mill and plant set to crush ore of that grade at ~250microns coarseness would significantly reduce capital and operational expenditures (CAPEX & OPEX reductions at ~250um) for the company and enable it to operate under industry average gold production costs per tonne. Whilst we can't yet draw a straight line between milling at 250um and a cost per ounce to produce gold at MCO but we are targeting A$800oz or less in our business plan.

Overall and encouragingly for us, not only are there rich remnant reefs as proven to date via the in mine sampling programs, but gravity gold returns are very high, giving rise to a ability to produce gold cost effectively and environmentally sensitively too. As with the 'old-timers', much of the success of projects around Woods Point and in coarse-gold deposits, comes down to smart technical planning and setting up mining, handling and haulage practices in order not to dilute the high grade ore which is abundant in the Morning Star Goldmine and the surrounding goldfield.