Goldcorp has announced the results of a feasibility study update for the company’s recently acquired Cerro Negro project in the Santa Cruz province of Argentina. Total capital costs would be $750 million. Total proven and probable gold reserves are 4.3 million oz. A new development plan details more than doubling the plant throughput to 4,000 metric tons per day (mt/d), contributing to an average of 550,000 oz/y of gold production over the first five full years. Average cash costs during the first five years of production are expected to be less than $200/oz of gold. Over the full 12 year mine life, based only on existing reserves, annual production is expected to average 340,000 ounces per year at cash costs of approximately $290/oz. The mining of multiple veins creates significant flexibility for optimization of the mine plan as additional reserves are developed.
“The positive results in this feasibility study confirm our expectations that Cerro Negro will contribute tremendous value for shareholders as Goldcorp’s next cornerstone gold mine,” said Chuck Jeannes, president and CEO, Goldcorp. “Capital cost estimates reflect more than a doubling of throughput, and the straightforward nature of the project design should result in a smooth construction period toward first gold production in just over two years. This is an extremely robust project as now configured; however, with all of the identified veins remaining open and numerous additional veins already identified, we are excited by the potential for future expansion of gold reserves and near-term upside to the production profile.” According to Goldcorp, Cerro Negro will represent 60% of its gold production growth over the next five years.
The increase in throughput and production from the original feasibility study is facilitated by the simultaneous mining of multiple, near-surface veins. The six currently identified sources of gold reserves (Eureka, Mariana Central, Mariana Norte, San Marcos, Bajo Negro and Vein Zone) are in some cases physically separated by several kilometers. The Vein Zone is planned as an open-pit and each of the other areas are underground deposits to be accessed by separate declines from the surface. The Eureka, Mariana Central and Mariana Norte veins will comprise the initial sources of ore production. Development of the decline at the Eureka vein has already been advanced to more than 900 m in length. The declines at Mariana Central and Mariana Norte are expected to commence in the fourth quarter of 2011 following the issuance of necessary permits.
Total capital expenditures to first production in mid-2013 are expected to be approximately $750 million, including $130 million in 2011. This amount includes approximately $500 million of direct costs for the expanded mining, process facilities and infrastructure, with the remainder in indirect costs including EPCM (Engineering, Procurement and Construction Management), owner’s costs and contingency.