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First high-grade gold mineralisation discovery in Peru

26th July 2013

By: Sashnee Moodley

Senior Deputy Editor Polity and Multimedia

  

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Latin American-focused Fortuna Silver Mines is active in South America, with a $6.7-million brownfields exploration budget for the area around its Caylloma mine, in Peru, where it has discovered high-grade gold mineralisation in the Ramal Piso Carolina and Don Luis veins, located in the northern portion of the deposit.

Although gold is present in minor quantities in the other veins in the Caylloma mining district, the Ramal Piso Carolina vein is the first discovery of high-grade gold mineralisation in the area.

The discovery was made in February and Fortuna Silver corporate development VP Robert Brown says the company hopes to continue developing the area and a resource on the Carolina discovery.

“We are also looking for new opportunities in South America and Mexico and are considering precious metal projects such as gold/silver and gold,” he tells Mining Weekly.

In January, the miner entered into a purchase and option agreement with Canadian silver mining company Pan American Silver. For a cash payment of $4-million, the company acquired a 55% undivided interest in the 6 254 ha Taviche Oeste concessions that surround its San Jose mine in Oaxaca, Mexico.

The option agreement granted Fortuna the right to buy, at the company’s sole discretion, the remaining 45% interest in the concessions for $6-million. Fortuna Silver made the final payment in June and currently holds an undivided 100% interest in the Taviche Oeste concessions, which are subject to a 2.5% net smelter royalty on ore production from this property.

“Our hopes for this acquisition lie in our ability to extend the high-grade silver/gold mineralisation of the Trinidad North discovery, at the San Jose mine, which remains open on strike to the north and at depth. We have been conducting a drilling programme over a 200 m x 200 m area in close proximity to our existing mine infrastructure. The company expects to source ore from Trinidad North by early 2015.

“The company plans to release a Canadian National Instrument 43-101 standard resource estimation, which will incorporate the Trinidad North discovery during the fourth quarter of 2013,” Brown adds.

Fortuna is in the process of concluding the expansion of the San Jose mine’s processing plant from 1 000 t/d to 1 800 t/d and should be ready for commissioning this quarter. The increment in ore treatment tonnage, form the original base case of 1 500 t/d was gained at no additional capital requirements, by capturing opportunities in the selection and acquisition of key equipment.

The increased output should add to Fortuna’s yearly production by an average of 500 000 oz of silver and by 4 000 oz of gold.

“Guidance for consolidated production in 2013 is projected at 4.5-million ounces of silver and 23 640 oz of gold, which is roughly six-million ounces of silver equivalent, plus significant lead and zinc by-products. This will increase to 5.4-million ounces of silver and 31 570 oz of gold, or about 7.3-million ounces of silver equivalent in 2014,” Brown notes.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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