Name of the Project
Miraflores silver/gold project.

Location
The Miraflores property is located in the municipality of Quinchía, Department of Risaralda, in Colombia.

Client
Metminco.

Project Description
A scoping study on an underground-only mining project at Miraflores has determined that it is financially robust and represents a viable development option.

The project has a measured and indicated mineral resource of 9.19-million tonnes at 2.81 g/t gold and 2.76 g/t silver at a cutoff grade of 1.2 g/t gold, which formed the basis of the mining study.

The study envisions a mining schedule producing 4.03-million tonnes at a mined grade of 3.51 g/t gold and 2.84 g/t silver, including a low-grade stockpile material feed over a mine life of nine years, producing an estimated 50 000 oz/y of recovered gold at steady state.

Mining will be conducted through underground long-hole stope mining with structural (cemented) and nonstructural (uncemented) backfill using development rock and filtered tailings.

An elevated cutoff grade of 2.2 g/t gold has been determined to be optimal, with the addition of 2 g/t gold stope areas, which are immediately adjacent to the 2.2 g/t gold areas and require limited additional development.

A production rate of about 1 300 t/d has been targeted from the underground operation to produce an estimated 50 000 oz/y. The mine will meet the 1 300 t/d plant feed, with a 365-days-a-year, 24/7 schedule of two 12-hour shifts.

The plan includes some low-grade marginal material that is stockpiled and then fed into the plant at the end of the life-of-mine. The mine plan includes only measured and indicated mineral resources. Mineralised tonnage larger than 1.2 g/t gold comprises 61% measured resources and 39% indicated resources. All inferred material has been treated as waste with zero grade when mined during the development process or adjacent to a stope.

Access to the mine will be through two portals with 4 m × 5 m drifts used for the main ramps and primary haulage drifts. The veins and mineralised zones between veins will be accessed through a two-ramp system and all material will be truck-hauled to surface.

The overhand mining sequence will advance in each stope block by mining from lower to upper levels. Metallurgical studies have shown that the Miraflores material can be effectively processed using a flowsheet that includes gravity concentration followed by cyanidation of the gravity tailings or by a flowsheet that includes gravity concentration followed by flotation and cyanidation of the flotation concentrate.

The latter flowsheet has been selected, as this has the advantages of a slightly better overall recovery and a much smaller footprint for the cyanidation circuit, which offers significant advantages regarding capital cost and disposal of cyanide leach residues.

Tailings material from the concentrator mill will be filtered to generate two distinct tailings streams consisting of flotation and leached residue tailings. The larger fraction of flotation tailings will be stored in a dry stack tailings management facility (TMF) and used for mine backfill.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $73.4-million and $96-million at a 5% discount rate. The internal rate of return has been estimated at 26%.

Payback is estimated at 2.6% years.

Value
The project will require $81-million, including $14-million in contingencies, in initial capital.

Duration
The company is targeting the first gold pour for the first quarter of 2019.

Latest Developments
Metminco has reported that it now has sufficient funding to advance a feasibility study on its Miraflores gold project during the third quarter, after obtaining loans from two sources.

The proceeds will also be used for general working capital.

The company has received A$750 000 from Redfield Asset Management and Redfield Advisory through a convertible note facility, while its major shareholder Lanstead Capital has executed a binding term sheet to provide an additional A$200 000 in funding through a nonredeemable convertible note facility.

MD William Howe has noted that the fundamentals of the Miraflores project are highly attractive, with Metminco expecting the feasibility study to further demonstrate this.

The focus is to deliver the feasibility study to the market and transition to the development stage.

Key Contracts and Suppliers
SRK Consulting (underground mining study).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Metminco, tel +61 2 9460 1856, fax +61 2 9460 1857 or email info@metminco.com.au.