Name and Location
Nueva Esperanza gold/silver project.

Location
Atacama, Chile

Client
Kingsgate Consolidated.

Project Description
A prefeasibility study (PFS) on the Nueva Esperanza project has delivered positive economics, with the project technically and financially viable at a silver price of $19/oz and a gold price of $1 200/oz.

The project has measured, indicated and inferred mineral resources estimated at 39.4-million tonnes grading 0.39 g/t of gold, 66 g/t of silver for 490 000 oz gold and 83.4-million ounces of silver or 1.88-million ounces of gold on a metal equivalence basis.

The project comprises the Arqueros, Chimberos and Teteria orebodies. Mining will be sequenced to maximise cash flow by extracting the highest-value ore blocks as early as possible.

Each pit has been staged with a number of push-backs to assist in maximising cash flow. Lower-grade material will be stockpiled and treated towards the end of the project. The selection of ore blocks for mining is based on the highest revenue generated by the gold and silver metal.

No gold equivalents are used in the selection of mining blocks.

Mining rates are reasonably consistent at 26-million tonnes a year, and are achieved using a fleet of two excavators, up to two front-end loaders and a fleet of 100 t trucks.

About one-million tonnes of ore and waste will be mined prior to the mill being commissioned.

The process plant, which will be located 3 200 m above sea level, consists of a primary crusher, a semiautogenous and ball mill, leaching and metal extraction by Merrill Crow.

Tailings are dewatered in a filter press and stacked as dry in a valley fill.

The design process rate is two-million tonnes a year.

Throughput rates have been designed using the 75% percentile for hardness and abrasiveness.

Grind size will be P80 120 μm and the leach time will be 48 hours. The plant will treat 23-million tonnes over the 11.6-year mine life.

Life-of-mine metal production will be about 275 000 oz of gold and 47-million ounces of silver.

Production over the first five years will be an average of 135 000 oz/y gold equivalent calculated at a 60:1 silver to gold ratio.

Jobs To Be Created
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of $168-million and an internal rate of return of 25%, based on a $1 200/oz gold price and a $19/oz silver price.

Value
Capital expenditure for the project is estimated at $206-million.

Duration
Mining is expected to be completed in six years.

Latest Developments
Kingsgate has discovered a new zone of silver mineralisation – Cerro Blanco West – at Nueva Esperanza.

Eight reverse circulation holes, totalling some 1 226 m, have been completed at the exploration target, with all drill holes intersecting silver mineralisation.

The Cerro Blanco West target has now been classified as a priority drill-target, which will be followed up in the spring, with the aim to expand the footprint of the currently defined mineralisation.

Kingsgate is also exploring several prospective targets within a 45 km2 zone of alteration in parallel with ongoing feasibility and permitting activities.

The project is currently at the feasibility study stage, which was awarded to Ausenco in June this year. The company will complete the detailed engineering and technical components for the Nueva Esperanza feasibility study.

The Ausenco appointment comes after a rigorous selection process that considered economic, technical, and other key project related criteria. The work is scheduled for completion in January 2018.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Kingsgate Consolidated, tel +61 2 8256 4800, fax +61 2 8256 4810 or email info@kingsgate.com.au.