Quick Facts
- Located in a prolific gold producing belt in northern Peru
- New mineral resource estimate announced on June 16, 2011:
- 121% increase in Indicated gold mineral resources to 1,971,000 oz. from 890,000 oz.
- 397% increase in Inferred gold mineral resources to 1,436,000 oz. from 290,000 oz.
- 27,980,000 oz of silver in Indicated mineral resources
- 38,580,000 oz. of silver in Inferred mineral resources
- ±70,000 meter exploration program underway in 2011 to expand mineral resource, which remains open in all directions and at depth.
- Robust Preliminary Assessment completed in February 2010:
-Average annual gold production of 105,000 ounce at cash operating costs of $403/oz.
-At $875/oz gold, pre-tax NPV of $119,102,000 at an 8% discount rate generating an IRR of 43.3%
-Excellent opportunities to improve project economics.
- Feasibility Study expected for completion in 2012
Project Location
The Shahuindo Gold Project is located in one of the world’s most prospective gold belts, neighbouring several low cash, low capital, heap leach gold mines including Barrick Gold’s Lagunas Norte Mine, 30 km to the south, and the Yanacocha Mine operated by Newmont Mining Company 80 km to the north; both million ounce per year producing mines.
The 100%-owned Shahuindo Gold Project covers approximately 8,000 hectares in the Cajabamba Province in northern Peru. It is located in a historically known mining region 80 kilometers south of Cajamarca, the region’s capital city, and 15 kilometers west of Cajabamba city. This region has excellent infrastructure, good access to water and electricity, and is accessible year-round at a good working altitude of 2,700 to 2,900 meters.
Preliminary Assessment Results - February 2010
Click HERE to view the full report.
The Preliminary Assessment results are based on the oxide and transition material of the mineral resource estimate completed in December 2009, which returned an Indicated mineral resource totaling 890,000 oz. gold grading 0.59 g/t and 21,400,000 oz. silver grading 14.3 g/t; and an Inferred mineral resource of 280,000 oz gold grading 0.49 g/t and 3,400,000 oz. silver grading 6.0 g/t. Below are the assumptions and parameters that were used in this report.
Preliminary Assessment Base Case Assumptions
|
| Gold price (Per ounce) |
$775 |
| Silver price (Per ounces) |
$11.5 |
| Gold recovery (%) |
80 |
| Silver recovery (%)** |
15 |
| Annual Discount rate (%) |
8 |
| Mine Life (Years) |
7 |
| Ore delivery to leach pad (Tonnes per day) |
15,000 |
| Annual royalty (%) |
1.5 |
| Refining cost (Per ounce of Au) |
$3 |
| Mine Parameter |
| Life of Mine Ore crushed (Tonnes) |
37,800,000 |
| Life of Mine Waste mined (Tonnes) |
74,500,000 |
| Life of Mine Strip ratio (Waste to ore) |
1.97 |
| Life of Mine average gold grade (Grams per tonne) |
0.7 |
| Life of Mine average silver grade (Grams per tonne) |
13.6 |
| Average annual gold production (Ounces) |
95,900 |
| Average annual silver production (Ounces) |
351,500 |
| Capital Costs |
| Pre-production capital ($) |
89,400,000 |
| Sustaining capital ($) |
14,300,000 |
| Restoration ($) |
7,000,000 |
| Operating Costs |
| Mining cost (Per tonne) |
$1.47 |
| Processing cost (Per tonne) |
$2.47 |
| General and Administrative cost (Per tonne) |
$0.92 |
| Refining charge (Per ounce of gold) |
$3.00 |
| Financial Analysis - Base Case |
| NPV @ 1 = 8% discount pre-tax ($) |
73,269,000 |
| IRR pre-tax (96) |
30.8 |
| Payback period (years) |
3 |
| Cost per equivalent gold ounce ($) |
403 |
*All monetary values are in U.S. dollars
** Silver mineralization occurs as refractory Argentojarosite, making cyanide recoveries of silver difficult, further metallurgical test work will be conducted.
***The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.
Simple Heap Leach Processing
(see December 8, 2009 press release for more information)