Name of the Project
Marmato underground gold expansion project.

Location
The project is located in the Caldas department, in the Middle Cauca gold district, in Colombia.

Project Owner/s
Caldas Gold.

Project Description
A prefeasibility study has affirmed the economic viability of the underground expansion of the project.

Marmato will ultimately comprise two distinct operations – the existing Upper Mine and the new Marmato Deep Zone (MDZ) operation, which is situated directly below the Upper Mine vein system.

The Upper Mine is the existing operating gold and silver mine that extends from the 1 300 m elevation down to the 950 m elevation, including the Veins Zone and the Transitional  Zone. The mine has been developed with level accesses proceeding horizontally from the main portal as the surface to horizontal crosscuts to provide access to the veins.

There are currently six production levels. The mine uses conventional cut-and-fill stope mining techniques, which currently supply about 1 000 t/d of material to a

1 200 t/d capacity mill that uses a Merrill-Crowe process to produce gold/silver doré bars.

Caldas plans to expand the capacity of the existing mill to 1 500 t/d over the next two years. Additional material will be mined from the wider porphyry area between the 950 m elevation and the 1 050 m elevation, referred to as the Transitional Zone, using a modified longhole stoping method.

The prefeasibility envisages the Upper Mine producing 5.1-million tonnes of mineralised material, primarily from the veins system, over a 13-year life-of-mine (LoM), with an average LoM head grade of 4.16 g/t. Total gold production is estimated at 600 000 recovered ounces, or about 32% of total gold production from the Upper Mine and MDZ areas. This will be accomplished through the immediate implementation of an optimised mine plan, including the strict control of dilution and mine recovery, as well as the mill expansion, which will result in production increasing from the about an estimated 26 000 oz/y produced in 2019 to about 50 000 oz/y, starting in 2021.

The MDZ area is in the exploration phase and has not been developed. Mineralisation is located below the 950 m level and can be mined using an underground longhole stoping method.

The mine will be accessed by a decline drift, with mineralisation transported from stopes by truck to an underground crusher and then to surface by conveyor. Internal intake and exhaust raises will be developed using raisebore machines, and air will flow into dedicated intake and exhaust ventilation drifts to surface.

A new 4 000 t/d plant facility, using gravity concentration and cyanidation of the gravity tailings, will be built to process material from the MDZ.

In addition, new dry stack tailings storage facilities will be built to receive about 55% of the total LoM tailings from the plant. The other 45% of tailings will be returned underground as cemented paste backfill.

The PFS envisages the MDZ mining operation producing 14.6-million tonnes of mineralised material over an estimated 11-year LoM starting in 2023, with an average LoM head grade of 2.85 g/t, resulting in total gold production of 1.3-million recovered ounces or about 68% of total gold production from the Upper Mine and MDZ areas.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of return
At a 5% discount rate, the net present value of the total LoM after-tax project cash flow amounts to $263.9-million. Before financing, the project has a 20.1% after-tax internal rate of return and payback by 2026.

Capital Expenditure
The project has initial capital costs estimated at $269.4-million for the expansion into the MDZ.

Planned Start/End Date
Not stated.

Latest Developments
None stated.
 

Key Contracts, Suppliers and Consultants
SRK Consulting (PFS).

Contact Details for Project Information
Caldas Gold, tel +1 416 360 4653 or email investorrelations@caldasgold.ca.