JOHANNESBURG (miningweekly.com) – The results of the independent preliminary economic assessment (PEA) at TSX-listed Colombia-focused Continental Gold’s 100%-owned Buriticá project, in Antioquia, Colombia, outlined a future mine that will employ more than 500 people, with the size, cost structure, diluted grade and overall economics qualifying it as one of the world's leading gold mines, said Continental Gold CEO Ari Sussman on Monday.
The PEA revealed an 18-year mine life based on about 20-million tonnes, grading 7.80 g/t of gold and 19.35 g/t of silver, resulting in about 4.7-million ounces of recovered gold and about seven-million ounces of recovered silver.
Sussman emphasised that the project design for Buriticá would reduce, as much as possible, the impact on local communities, while adhering to the highest standards for environmental protection, operating efficiencies and workforce safety.
He further explained that Continental Gold’s commitments for 2015 were to complete the outstanding permitting for the project and update the project’s National Instrument (NI) 43-101 resource estimate and PEA, incorporating data received from underground development sampling and drilling, which was scheduled for completion by January 31, 2015.
Meanwhile, the PEA indicated that throughput would begin at a rate of 2 000 t/d and ramp up to 3 500 t/d in the third year.
The first five years of production were expected to average about 314 000 oz/y of gold and 507 000 oz/y of silver, at a total cash cost of $389/oz of gold. Life-of-mine production would average 265 000 oz/y of gold and 394 000 oz/y of silver, at a total cash cost of $431/oz of gold, placing Buriticá in the lowest cash cost quartile globally.
Further, the PEA indicated an after-tax net present value, at a 5% discount, of $1.08-billion and after-tax internal rate of return was expected to be 31.5% on an initial capital cost of $390.3-million with a payback of 2.8 years.
Five master vein families contained 76% of the total gold mine production in the first three years. The company would focus on mining the San Antonio, Murciélagos and Centena vein families in the Yaraguá mineral resource, while the 62 and 90 vein families in the Veta Sur mineral resource would result in a straight-forward development in the early years of the mine.
The PEA suggested longitudinal bench and fill as the mining method, as both vein systems were steeply dipping and the host rock was competent. “Drifts will measure 4 m X 4 m and the benches will be 8 m in height,” Continental Gold pointed out.
Further, mining dilution of 58% was calculated under the assumption that all material located outside the hard boundaries of modelled veins was assigned a value of 0 g/t gold and silver. However, based on recent results announced on October 28, 2014, for the Veta Sur deposit, including 30 m, true horizontal width, at 9.6 g/t of gold and 47 g/t of silver, the company highlighted that significant potential existed to improve the dilution grade assumption in future economic studies.
The PEA was completed using the resource estimate for the Yaraguá and Veta Sur deposits, prepared in accordance with NI 43-101, as announced on May 13, 2014.
The study was led by M3 Engineering & Technology of Tucson, Arizona, with contributions from other independent consultants including Chilean-based NCL, which was responsible for the development of the underground mine plan for the project.