Patagonia Gold PLC Cap-Oeste Project and Lomada Operations Update (3605I)
30 August 2016 - 4:01PM
UK Regulatory
TIDMPGD
RNS Number : 3605I
Patagonia Gold PLC
30 August 2016
30 August 2016
Patagonia Gold Plc
("Patagonia Gold" or the "Company")
Cap-Oeste Project and Lomada Operations Update
Patagonia Gold Plc, the mining company with gold and silver
projects in the southern Patagonia region of Argentina, Chile and
Uruguay, is pleased to provide an update on its open pit mine and
heap leach processing facility at Cap-Oeste (the "Project") and
operations at the Lomada de Leiva mine ("Lomada").
Cap-Oeste
The Environmental Impact Study for the development and
construction of, and the mining permit for the Project have now
been approved and issued respectively by the Provincial Mining
Authority. This is a significant milestone in terms of the
continuing development and construction of the Project. Initial
earthworks commenced at the Project in April 2016 and all equipment
and plant supplies for the Project have now been purchased.
Construction is also advancing as planned with initial production
expected to commence during September 2016. A total of US$13
million will be invested in the project to take it into production
including capital expenditure and working capital.
The newly purchased mining fleet, consisting of three
Caterpillar 773G trucks and a CAT 390C excavator, is now on site
and currently being commissioned. The new equipment will replace
some of the existing mine fleet transferred from Lomada, enabling
the Company to demobilise all hire machines and is also expected to
increase the overall earth moving capacity, resulting in a
reduction in unit costs in local currency significantly.
All Cap-Oeste ore produced from the open pit operations will be
treated via a heap leach operation similar to Lomada, with the dore
produced being shipped directly from Cap-Oeste's gold room
facility, which is currently being expanded to account for the
increased silver content of the final dore product. The forecast
production for the Project during the 24 month expected life of
mine is estimated to approximately 82,000 oz AuEq, with potential
to increase the mine life with supply from satellite deposits such
as Monte Leon and La Manchuria. In this regard, a 2,000m reverse
circulation drill programme is scheduled to commence in September
on Monte Leon, with the objective of expanding the oxide
mineralisation and delineation of an additional open pitable
resource at Cap-Oeste. In addition, following the increase in the
gold price, the Company is commencing a further optimisation study
for the Project, based on prices of US$1,350 Au and US$20 Ag per oz
versus the original pit study which was undertaken based on prices
of US$1,200 Au and US$20 Ag, which may also increase the life of
mine.
In respect of the underground mine at Cap-Oeste, metallurgical
test work is continuing on the Arsenopyrite hosted mineralisation
and recently completed floatation test work reported a 92.3%
recovery of Au into a 62 g/t cleaner concentrate with silver assays
still pending. The concentrate will now be subjected to a series of
leach tests with oxygen addition and fine grinding of the
concentrate. Subject to the outcome of this test work and it being
demonstrated to be economically viable, there is a potential to
unlock high grade refractory ounces in the deeper section of the
Cap-Oeste resource.
Lomada de Leiva
Whilst mining ceased at Lomada in May 2016, irrigation of the
heap leach pad has continued and Lomada produced 17,862 oz Au for
the first seven months to 31 July 2016, which represents 14% above
the Company's forecast for the period of 15,600 oz Au. Cash costs
for the period were US$572 per oz.
Gold production from the continued irrigation of the pad is now
only forecast to continue for at least a further six months, as
production has decreased faster than initially anticipated. The net
profits obtained from this production are being utilised to meet a
portion of the operating capital requirements from the construction
of Cap-Oeste. With the recent increases in the gold price and the
removal of export royalties on dore, the Company is reassessing the
viability of resources located in the southern end of the Lomada
pit previously considered uneconomic.
Ends
About Patagonia Gold
Patagonia Gold Plc is a mining company that seeks to grow
shareholder value through exploration, development and production
of gold and silver projects in the southern Patagonia region of
Argentina and Chile, and in Uruguay. The Company is primarily
focused on three projects: the flagship Cap-Oeste/COSE project, the
La Manchuria project and the Lomada heap leach project. Patagonia
Gold, indirectly through its subsidiaries or under option
agreements, has mineral rights to over 220 properties in several
provinces of Argentina and Chile, and is one of the largest
landholders in the province of Santa Cruz.
Matthew Boyes, (BSC. Geology, Fellow AusIMM) Chief Operating
Officer for Patagonia Gold PGSA and a qualified person as defined
in Canadian National Instrument 43-101, has reviewed and verified
all scientific or technical mining disclosure contained in this
press release.
For more information, please contact:
Christopher van Tienhoven, Chief Executive Officer
Patagonia Gold Plc
Tel: +54 911 5278 6950
Richard Tulloch / Ritchie Balmer
Strand Hanson Limited (Nominated Adviser and Broker)
Tel: +44 (0)20 7409 3494
This announcement contains inside information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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