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PERTH (miningweekly.com) – Gold miner PanTerra Gold has inked a predevelopment and earn-in agreement with Vancouver-based Canarc Resource Corporation, which was expected to lead to the development of the New Polaris gold mine, in British Columbia.
PanTerra reported on Thursday that the company would progressively spend C$10-million over three stages of predevelopment activities to earn a 50% interest in the project.
Stage 1 of the predevelopment expenditure would consist of C$500 000 over a five-month period, and would involve the production of concentrate from representative ore samples and testwork at a pilot plant in Brisbane.
Stage 1 would also involve a technical and economic review of the proposed mine development and would update the financial model to reflect a 900 t/d mining rate and a production rate of around 40 000 t/y of concentrate.
PanTerra would have 60 days from the completion of Stage 1 in which to elect to proceed to Stage 2, which would require a capital investment of C$3.5-million, of which half would be spent on a drilling programme.
The Stage 3 expenditure of about C$6-million would be primarily on the completion of a definitive feasibility study (DFS), which would involve further in-fill drilling, additional metallurgical testwork and preliminary engineering.
By this point, PanTerra would have earned a 50% interest in the project.
Within six months of completing a DFS, most likely by the fourth quarter of 2016, the Australian company could then purchase a further 1% interest from Canarc for 1% of the net present value established by the project’s DFS.
PanTerra said that assuming a decision to proceed with the development was made by the end of 2016, commissioning of the project was planned for the third or fourth quarter of 2018, subject to approvals being obtained.
PanTerra would purchase all concentrate produced at the project for the life-of-mine, at a price to be determined by the average prevailing market price nominated by two selected traders. The concentrates would then be delivered to the company’s own Las Lagunas project, in the Dominican Republic.
It was expected that the Las Lagunas mill would recover about 100 000 oz/y of gold from the concentrate.
PanTerra noted that the 40 000 t/y concentrate from the New Polaris mine would take up only 25% of the Las Lagunas plant capacity, providing scope for sourcing additional refractory concentrate to increase the 100 000 oz/y recovery.
The miner said that it was investigating a number of prospective developments within the region that could potentially add to the New Polaris supply. The company was also in a position to enhance its current production in the near-term if it was able to purchase high-grade refractory concentrate from existing producers, suitable for blending with the low-grade Las Lagunas tailings.
In 2014, PanTerra was forced to seek alternative opportunities for its Las Lagunas operation, as the mine continued to deliver below expectations. A review process had revealed that the project would be unable to achieve the gold and silver recoveries originally expected from the project, as the Albion/carbon-in-leach process technology was only treating old mine tailings, rather than clean concentrate produced from mining operations.