TORONTO (miningweekly.com) – Project developer Sulliden Gold on Wednesday said Peru’s Energy and Mines Ministry (MINEM) had approved the environmental-impact assessment (EIA) for the Shahuindo gold/silver project, in the country’s north.

The company said approval of the EIA was a critical milestone in advancing the project towards the construction phase.

"This completes an extensive regulatory process and represents the most important step in bringing Shahuindo to production,” Sulliden chairperson and CEO Peter Tagliamonte said in a statement.

The EIA was submitted to the MINEM on December 17, 2012, being the result of more than 18 months of technical studies, including a comprehensive water management plan, the feasibility study, archeological studies, flora and fauna studies, mine closure planning, social baseline studies, and results from several months of public consultations with local communities.

The EIA’s approval would allow Sulliden to advance the permitting process for the mine construction and other related authorisations from the relevant Peruvian authorities.

A feasibility study completed in September 2012, which only included about 40% of the total mineral resources, had suggested mining the deposit through a shallow $131.8-million openpit heap leach operation, processing an initial 10 000 t/d to produce about 90 000 oz of gold equivalent a year.

Cash costs were expected to total about $552/oz. The study used a gold price of $ 1 415/oz and a silver price of $27/oz.

The feasibility study placed on the project a 37.8% after-tax internal rate of return, using a 5% discount rate, and an after-tax net present value of $248.6-million.

The Shahuindo gold/silver project has a National Instrument 43-101-compliant measured and indicated resource of 147.31-million tonnes, containing 2.43-million ounces of gold at a grade of 0.52 g/t, and 33.37-million ounces of silver at a grade of 7.1 g/t.