Vancouver – An independent preliminary economic assessment of Viceroy Exploration’s (VYE-V) wholly-owned Quebrada del Diablo deposit, projects an after-tax internal rate of return of 32.3% based on a gold price of US$400 per oz.
AMEC’s study focused on the Quebrada del Diablo deposit which is one of several near surface deposits on Viceroy’s Gualcamayo project, situated in San Juan province, in west central Argentina. Quebrada is about 1 km southeast and along strike from the Amelia Ines and Magdalena deposits.
The study proposes a 10,000 tonne per day heap leach operation which should recover 80% of the gold. The mine would comprise a series of open pits into the deposit. Rather than using trucks to haul the ore, it would be moved by way of one of two ore passes within the pit. The ore would then be crushed and conveyed some 1.5 km to the heap-leach facilities in the valley below the deposit.
The economic study which includes inferred mineral resources, sees average gold production of 96,100 oz. a year from the operation projected to last over a ten year mine life, with cash costs around US$133 an oz.
The study estimates a capital cost of US$55.7 million before production and US$14.4 million a year to sustain the mine over its life.
To allow continuous access to the ore, pre-stripping is planned to remove the limestone cap on top of the main Quebrada deposit. With the pre-strip the waste-to-ore ratio is 2.25 to 1, and without pre-stripping, the average strip ratio is 1.63 to 1 over the mine’s life.
At metal prices 10% below and above the US$400 per oz. base case, the IRR is 24.5% and 37.8%, respectively.
The company is excited by the prospects of Quebrada as a stand-alone project. As well, the news comes on the heels of its best drill results outside of the current Quebrada resource which bodes well for the deposit’s expansion.
The first four diamond drill holes of Viceroy’s current program recently returned returned 2.5 grams gold per tonne over 87.5 metres from surface, including 4.1 grams gold over 30.3 metres from QD-108, and 2.2 grams gold over 87 metres from surface including 4.2 grams gold over 30.2 metres from QD-109. These mineralized intervals occur in limestone, marble and intrusive-hosted breccia.
The main resource at Quebrada includes 37.1 million tonnes of 1.04 grams gold (1.2 million oz.) in the measured and indicated categories, at a cutoff of 0.5 gram gold. There are another 11.3 million tonnes grading 1.20 grams gold (435,000 oz.) classified as inferred.
The measured and indicated resource at Amelia Ines include 2.1 million tonnes averaging 2.82 grams gold (192,000 oz.) using a 0.5 gram cutoff. The combined inferred resources for Amelia Ines and the adjacent Magdalena deposit amount to 2.9 million tonnes grading 1.88 grams gold (176,000 oz.).
The company aims to proceed with a pre-feasibility study which will include the additional resources at Quebrada, Amelia Ines and Magdalena.
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