Chesapeake Gold Corp., a Canadian junior company headquartered in Vancouver, has reported the results of an NI 43-101-compliant prefeasibility study (PFS) of its 100%-owned Metates gold-silver project in Durango state, Mexico. The study describes a $4.36-billion, 120,000-mt/d mining project based on proven and probable mineral reserves of 18.5 million oz of gold, 526 million oz of silver, and 4.2 billion lb of zinc.
Metates mine life is estimated at 25 years, with production averaging 659,000 oz/y gold, 15.9 million oz/y silver, and 190 million lb/y zinc over that time frame. Average life-of-mine gold equivalent cash cost is estimated at $489/oz, net of zinc credits.
The Metates project is located 160 km northwest of the city of Durango and 175 km north of the coastal resort city of Mazatlan. The PFS contemplates a conventional truck-and-shovel, open-pit mining operation with a nominal 120,000 mt/d throughput. Crushed ore will be fed to a conventional SAG and ball mill circuit followed by a single-stage flotation plant to produce a bulk sulphide concentrate. The comminution and flotation circuits will be built as two separate lines, each rated at a nominal 60,000 mt/d.
The sulphide concentrate will transported downhill via a 126-km-long slurry pipeline for further processing at a site at Ranchito southwest of Metates. At Ranchito, the sulphide concentrate will be treated in a pressure oxidation plant, followed by cyandiation and Merrill-Crowe recovery of gold-and-silver doré.
High-purity oxygen to feed the pressure oxidation plant will be manufactured on site in a dedicated plant owned and operated by a third party and provided under an “across the fence” arrangement. Acidic solutions from the pressure oxidation process will be neutralized with ground limestone and lime produced from an on-site quarry and then co-disposed with the cyanide leach tailings in an adjacent storage facility.
Zinc will be recovered from the pressure oxidation solutions via solvent extraction/electrowinning methods to produce Special High Grade zinc ingots. Overall gold and silver recoveries from ore through doré production are estimated at 89% and 76%, respectively. Overall zinc recovery to ingots is estimated at 85%.
Chesapeake has identified a number of opportunities that could further enhance the viability of the Metates project going forward. These include:
- Further evaluation of electric power supply options.
- Evaluation of a staged development option, where capital to fund expansion from a 60,000-mt/d to a 120,000-mt/d ore processing rate is funded out of cash flow.
- Assessment of alternative technologies for the production of high-purity oxygen, with potential savings in both capital and operating costs.
- Optimization of the layout of site facilities at both the Metates and Ranchito sites to minimize capital costs and enhance operating efficiencies.
- Appraisal of the opportunities for liquefied natural gas to fuel the mine haulage fleet.
Chesapeake is sufficiently financed to advance the Metates project toward completion of a full feasibility study.