Study Supports Restart of Aurizona Mine in Brazil

Luna Gold Corp. has reported the results of a prefeasibility study (PFS) of a potential restart of operations at its Aurizona gold mine in northeast Brazil. The mine has been on care and maintenance since August 2015. The PFS mine plan would continue mining in the existing Piaba open pit, deepening the pit and mining harder rock types that will be amenable to treatment in an upgraded processing plant following installation of a new comminution circuit.

The Aurizona redevelopment project has 969,000 oz of gold in proven and probable mineral reserves at an average diluted grade of 1.62 g/mt gold and 1.60 million oz of gold in measured and indicated resources, inclusive of reserves, at an average diluted grade of 1.67 g/mt gold.

The upgraded processing plant will have throughput capacity of 8,000 mt/d, with production forecast to average 150,000 oz/y over the first five years of operation. Initial capital costs to restart operations are estimated at $146 million, including a new mine fleet. All-in sustaining costs of production are estimated at $708/oz of gold produced.

Procurement and construction of the new components and equipment for the restart is expected to take 18 months.

The PFS recommends that the Aurizona restart project continue to its next phase with the preparation of a feasibility study. Additional geotechnical field work is recommended to support suggested pit slopes, waste storage facilities, and tailings dam raises; and additional metallurgical testwork is recommended to confirm preliminary indications that the presence of arsenic does not materially impact gold recovery in the process plant. A $2.4-million program has been outlined by Luna to address these and other items, with the objective of issuing the feasibility study by end of the first quarter of 2017 and targeting a first gold pour in the second half of 2018.

Workers install a CIL tank at the Aurizona gold operation prior to the mine’s transition to care and maintenance status in 2015. (Photo: Luna Gold)
Workers install a CIL tank at the Aurizona gold operation prior to the mine’s transition to care and maintenance status in 2015. (Photo: Luna Gold)

Iamgold to Add Resources in Suriname

Iamgold has signed an agreement with the government of Suriname to acquire an interest in the Saramacca property approximately 30 km southwest of the company’s Rosebel gold mine and mill in the country. The terms of the acquisition included an initial payment of $200,000, allowing Rosebel’s exploration team access to the property and to data from previous exploration activity.

Provided Iamgold is satisfied with the results of a due diligence review, it will pay $10 million and $3.125 million Iamgold common shares to be held in escrow and released to the government in three approximately equal tranches over 12-month intervals following the ratification of the agreement. Adjustments to the purchase price will be calculated depending on the success of a drill program carried out by the Rosebel exploration team over the first 24 months but will be capped at $10 million.

The Saramacca property has been explored since the 1990s, principally by Golden Star and later by a joint venture between Golden Star and Newmont. Much of the previous work focused on the discovery and delineation of Anomaly M, where more than 50 diamond drill holes and 200 auger holes were completed in the anomaly area. Evaluation of this work suggests an exploration target potential of between 8 million and 40 million mt grading between 1 and 1.8 g/mt gold for potentially 500,000 to 1.4 million oz of contained gold.

This potential quantity and grade is conceptual, and insufficient work has been completed to define a mineral resource. The target ranges are consistent with deposits currently being mined at Rosebel.

The Rosebel mine is owned 95% by Iamgold and 5% by the government of Suriname. Production attributable to Iamgold during 2016 is forecast at 285,000 oz to 295,000 oz.


Pan American Silver Advances La Colorada, Dolores Expansions

Pan American Silver recently achieved important project milestones at expansion projects under way at its La Colorada and Dolores mines in Mexico.

At La Colorada in Zacatecas state, a new 618-m-deep shaft was commissioned ahead of schedule in fully automatic mode in early September. The shaft, said the company, was constructed using industry-leading raise boring and shaft automation technologies. Work remaining to complete the project includes a new filter plant, a power line and underground development.

Development of the La Colorada project began in 2014, with an original capital investment estimate of about $163.8 million. The project is now expected to be completed 5% to 10% under budget by the end of 2017. At design capacity, processing rates will increase to 1,800 mt/d, and annual silver production will increase by about 69% to 7.7 million oz/y.

At Dolores in Chihuahua state, a new 98-km, 115-kV power line that connects the mine to the national power grid was energized in early September.

The Dolores expansion project includes construction of a pulp agglomeration treatment plant and an underground mine. Capital to develop the project is estimated at $112.4 million.

When complete at the end of 2017, the project will increase the Dolores mine’s silver production by about 40% to 6.3 million oz/y and gold production by about 52% to more than 205,000 oz/y.


GoGold Testing Vat Leaching at Santa Gertrudis Project

GoGold Resources has budgeted $10 million to install a starter-project, 2,000-mt/d vat leaching operation and to carry out initial mining, road upgrades, and stockpiling at its previously mined Santa Gertrudis gold project 180 km north of Hermosillo, Sonora, Mexico. The vat leaching operation is being conducted as a potential alternative to a conventional cyanide heap leaching operation that was considered in a 2014 preliminary economic assessment.

GoGold plans to begin installation of vats for the starter project in October, targeting completion in three to four months. Additional capital items such as crushing, infrastructure, and initial mining and stockpiling will also be undertaken during this period.

GoGold anticipates that the vat leaching operation will allow field evaluation of the many ore types and deposits on the Santa Gertrudis property. The results of the tests will in turn provide input for an updated feasibility study. GoGold believes the scale of the proposed initial plant will allow sufficient cash flow to cover the full cost of the plant and the feasibility study program.

Total development time for the initial vat leaching project is expected to be in the range of four to six months. Assuming the starter project is successful, vat leaching at Santa Gertrudis may then be scaled up by adding additional vats to achieve a full-scale commercial operation.

GoGold Resources is a junior Canadian company headquartered in Halifax, Nova Scotia. Its Parral tailings reprocessing project in Chihuahua state, Mexico, reached commercial production in April 2015.

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