Corner Bay advances Alamo Dorado

Ongoing metallurgical testing on Phase 1 pit material has shown improved recoveries of gold and silver from Corner Bay Silver‘s (BAY-T) Alamo Dorado gold-silver deposit in Mexico’s Sonora state.

Two column-leach tests were conducted over 379 days. They have shown a gold recovery rate of 87% and a silver recovery rate of just over 80%. Both metals were still being leached when the tests were terminated. Testing of samples of overall pit material has confirmed recoveries averaging 65% for silver and 75% for gold.

The tests suggest that lift height plays no role in metal extraction and neither does agglomeration of ore for heap-leaching.

Further tests are ongoing. They are aimed at more accurately determining reagent consumption, residual metal content and composition of waste and heap materials.

All the necessary environmental studies are under way.

Corner Bay is also in the midst of a drill program aimed at gathering material for the geotechnical testing necessary to complete engineering and mine design for a feasibility study, which is being prepared by AMEC Simons.

Reverse-circulation drilling is also testing for the availability of water with applicable flow rates and chemistry.

The company plans to begin drilling to locate areas suitable for heap-leach pads and waste rock stockpiles. Site investigations and soil-testing are under way to locate an area for the permanent heap-leach pad. The company plans to build one pad with excess capacity to handle more reserves if a larger deposit is found.

Based on the improved recovery results and increasing silver prices, Mintec, which is based in Tucson, Ariz., will complete a resource and reserve study and update the mine plan and schedule.

Engineering is progressing and Corner Bay expects to wrap the feasibility study up during the first quarter of 2002. The company is also in talks with several lenders.

Mintec’s previous prefeasibility report pegged the deposit’s open-pit reserves at 52.5 million tonnes grading 63 grams silver and 0.23 gram gold. This is equal to 106.5 million oz. silver and 394,200 oz. gold, or 129 million oz. silver-equivalent. The stripping ratio was 1.82-to-1.

A total resource of 117.5 million oz. silver and 447,700 oz. gold, or 142.8 million oz. silver-equivalent, is contained in 79.6 million tonnes grading 45.9 grams silver and 0.18 gram gold.

The study envisaged a daily mining rate of 15,000 tonnes of ore (or 5.5 million tonnes per year), to produce an average of 7.1 million oz. silver and 30,300 oz. gold annually over a 10-year mine life. Cash costs over the life of the mine were projected at US$2.96 per oz. silver-equivalent, with starter-pit costs pegged at US$1.55 per oz. during the first few years.

Capital costs were placed at US$45 million. The payback period is just 18 months, based on a silver price of US$5.28 per oz. and a gold price of US$300 per oz.