Paramount Gold and Silver has reported the results of a preliminary economic assessment (PEA) for its 100%-owned Sleeper gold and silver project in Humboldt county, Nevada. Paramount acquired a 100% interest in the project in 2010, including the original Sleeper high-grade open-pit mine operated by Amax Gold from 1986 to 1996. The PEA was led by Scott E. Wilson Consulting Inc., using resource and geologic information developed by SRK Consulting (Chile) S.A.
The Sleeper PEA proposes development of a large-scale, open-pit mining operation with a heap leach processing plant handling both oxide and sulphide material, producing a gold-silver doré. Mining at a rate of 81,000 mt/d would result in a 17-year operation, with average annual production of 172,000 oz of gold and 263,000 oz of silver. Projected life-of-mine average cash operating costs are $767/oz of equivalent gold recovered.
Start-up capital costs are estimated at $346 million. Sustaining capital costs over the project’s life are estimated at an additional $278 million. Total capital cost contingencies over the project life are estimated at an additional $64 million, bringing the total life-of-mine capital costs to $688 million. The total cost/oz of equivalent gold production (including cash operating costs and total capital and contingency costs over the life of the mine) is estimated at $996/oz.
Global combined oxide and sulphide measured and indicated resources at the Sleeper project total 241.5 million mt at average grades of 0.39 g/mt gold and 4.20 g/mt silver, for 3.05 million oz of contained gold and 321.6 million oz of contained silver. Paramount notes that the PEA also incorporates inferred mineral resources.
Paramount has performed scoping level metallurgical testing to provide a basis for estimation of potential process recoveries for oxide, sulphide, and mine dump material. Three general mining zones were defined on the basis of this testing and historical mining performance: the Facilities Zone (an area on the eastern edge of the Sleeper surface excavation); the Sleeper Zone (low-grade continuation of the original Sleeper deposit at depth); and mine dumps from historic Sleeper mining operations.
The process facilities are assumed to be standard cyanide heap leaching with a carbon-in-column and adsorption-desorption recovery plant. The process facilities would produce a doré for direct sale to a regional refinery.
Commenting on the results of the Sleeper PEA, Paramount President and CEO Christopher Crupi said, “This PEA is an important step in the rebirth of what was once a very successful Nevada gold producer. The relatively low estimated start-up capital and unit operating costs and a 17-year life make Sleeper an attractive development option. The exploration potential at Sleeper is highly favorable for expanding the resources available to the open-pit operation envisioned in the PEA. We are now drilling these close-in targets to improve the project while also exploring for a second high-grade Sleeper mine on our large land position.”