PERTH (miningweekly.com) – Gold explorer Orinoco Gold on Wednesday revealed its plans to start production at its Caval Ridge mine, in Brazil, following high-grade results from an exploration decline.

In the absence of a Joint Ore Reserve Committee-compliant resource, Orinoco has not set specific gold production targets yet, but stated that the initial mine plan would only encompass a small portion of the Cascael and Mestre area.

The development strategy was based on Orinoco independently establishing an initial 40 000 t/y gravity circuit, which would likely be located at the existing mining lease at Sertao gold mine, some 28 km away.

The total plant and equipment component for the operation would require a $1.4-million investment, while the total capital cost for the installation and commissioning of the gravity circuit has been estimated at $5.2-million.

Orinoco said that the low capital cost was largely attributed to the fact that gold recoveries of more than 80% and up to 94% have been achieved in metallurgical testing from Cascavel ore, using a simple gravity circuit with no cyanide.

“For a relatively small capital expenditure of $6.6-million, we can install and fully commission a 40 000 t/y gravity circuit and develop an underground mine with the assistance of expert underground mining contractors,” MD Mark Papendieck said.

“Given the fact that mineralisation outcrops and that we have completed extensive sampling and evaluation of the mineralised zone from the decline, we believe this represents an attractive, low-risk development pathway.”

Papendieck said that execution of this detailed strategy, upon the completion of project finance, would enable Orinoco to make the transition to production, with low-cost operations creating a strong platform for the company’s long-term growth ambitions.

Orinoco was currently in discussions with several parties regarding appropriate debt funding options to finance the project. An application for a full mining lease at Cascavel would be lodged in November this year, which would include plans for the installation of a larger capacity gravity circuit with an associated carbon-in-leach circuit, allowing for recovery of over 98%.

Meanwhile, Orinoco on Wednesday announced that it had discontinued discussions with fellow-listed Cleveland Mining, under which Cleveland would have assisted Orinoco in mining, extracting, processing and selling gold ore from the Cascavel project, with the ore to be transported and processed at Cleveland’s Premier gold mine, about 120 km away.