The Morning Star Gold Mine has operated over a 101-year period, producing gold from narrow quartz veins and sulfide stockworks hosted mainly within a dioritic-gabbroic dyke. The deposit has been developed over a vertical depth of 980 m with drilling extending the vertical depth to greater than 1200 m._x000D_
Currently there is a total Inferred Resource of 4.6 million tonnes at a grade of 6 g/t for 910 000 ounces of contained gold resources, which comprises an underground project and a surface project._x000D_
Significant variation exists between the grade of drill core intersections and that observed in face sampling and subsequent production reconciliation (250 - 650 per cent). Studies were carried out on ten major production reefs, where the grades of drill intercepts were compared with face samples collected during development and mining. The implications of this study have been used as justification to assign production or stope/development grades where applicable to resources that are direct extensions of the historical development headings._x000D_
Grade assignment and its impact on sensitivity for gold resources are detailed and show a 40 per cent variation in the gold resource, depending upon whether a production or calculated stope grade is used in grade assignment for the major reef deposits._x000D_
Recent diamond drilling has intersected approximately 40 new gold bearing quartz reefs and sulfide zones that contain all the key mineralogical and structural indicators, and traditional large variations in gold grades similar to the historical major production zones. The implications of grade factoring and grade assignment are the greatest challenges confronting the resource estimation team in defining grade for these new zones._x000D_
Grade assignment is seen as a method of balancing known historical production observations with the irregular grade distribution inferred from drill core assay results. Ongoing mine development and bulk sampling works are planned to validate the grade assignment process. The first stage of this process is the trial mining of the newly discovered Maxwell Reef (MR). The stope drawpoints were completed in August 2008 and the MRS1 stope is scheduled for completion in September. The stope reconciliation results will be presented at the October 2008 conference.