Glencairn to convert Libertad to mill operation

Poor metallurgical recoveries at the Libertad gold mine in Nicaragua have convinced Glencairn Gold (GGG-T, GLE-X) that it is time to go big or go home.

Glencairn will shut La Libertad down for two years while it redevelops the operation as a conventional mine and mill. The shutdown will start at the end of March.

La Libertad, an open pit mine with a heap-leach plant, produced less than 6,000 oz. gold in the third quarter of 2006, at a cash cost of US$884 per oz., making a US$2.6 million operating loss on revenues of US$3.6 million. Recoveries from the heap leach system were 41% to 45%, and pit stripping, none of which was capitalized, added to the operating cost.

Upgrades to the crushing and screening circuit did not turn the operation around, so Glencairn is now looking to a more radical solution. A 1,000-tonne bulk sample from La Libertad, processed at Glencairn’s Limon carbon-in-pulp mill, a few hours away by road, showed a 90% gold recovery when conventionally milled, with relatively fine grinding (all material below a 0.15-mm grain size).

In contrast, leach testing on successively finer grinds did not show improved recovery, suggesting that any improvements at the front end of the heap-leach system would have little effect on final production.

La Libertad does not hurt for resources; a recent study by consulting firm Scott Wilson Roscoe Postle put the project’s indicated resource at 16.3 million tonnes grading 1.5 grams gold per tonne, plus an inferred resource of 4.2 millino tonnes grading 1.7 grams. That resource assumed recovery of 61% and a US$500-per-oz. gold price to arrive at a cutoff grade of 0.6 grams gold per tonne, assumptions that would be conservative given the higher recovery in a conventional mill.

Glencairn has engaged consulting firm AMEC to supervise test milling of a 4,000-tonne sample from Libertad at Limon, to supervise further metallurgical testing at SGS Lakefield in Ontario, and to put together a scoping study for the end of March. A feasibility study would follow, with the new mill built and commissioned by some time in 2009.