Int’l Minerals goes back to drawing board for Gaby gold plant

A prefeasibility study for International Minerals‘ (IMZ-T) Gaby open pit gold project in Ecuador recommends that the company increase plant capacity because all four processing options tested were too costly at a base case gold price of US$650/oz.

The most sustainable option, whole ore grinding followed by carbon in leach (CIL) with an 89% gold recovery and no copper, would require a gold price of US$850 per oz. or more.

Three process options considered a 20,000 tonne-per-day mining operation while one, a heap leach cyanide option, considered a 25,000-tonne per day operation.

Vice-president of investor relations, Wendy Yang, says the study is a starting point.

“What we were trying to show is that at 20,000 tonnes per day, it doesn’t break even until US$850 oz. gold, but if we scale up our plan we can improve economics quite a bit,” Yang says.

Included with the study was an updated resource calculation for Gaby, which is about 62%-owned by International Minerals. A government agency and a private owner hold the remainder but the company is in negotiations to increase its take to a full 100%.

Measured and indicated resources now stand at 308 million tonnes grading 0.63 gram gold per tonne and 0.1% copper, containing about 6.2 million oz. gold and 284,000 tonnes of copper.

Inferred resources measure in at 122 million tonnes grading 0.65 gram gold per tonne and 0.08% copper, containing nearly 2.6 million oz. gold and 95,000 tonnes copper.

A cut-ff grade of 0.4 gram gold per tonne was used.

Yang says the company will now look at mining up to 50,000 tonnes per day using whole ore grinding with CIL, and copper recovery won’t be considered.

“The copper didn’t make enough of a difference,” Yang says. “With the price of copper, we feel the better option is to scale up the gold recovery.”

At 20,000 tonnes per day, the company could produce 2.3 million oz. gold over 14 years. Initial start up capital would be US$432 million and the total cost including capital would be US$783 per oz.

The project consists of two deposits, Main Gaby and the Papa Grande deposit, which is 1.5 km to the east.

The property is next to the Pan-American highway and is about 130 km south of Guayaquil port.

International Minerals plans to finish an optimization study by mid-2008 and if the results are good, the company will go ahead with a feasibility study to be completed by mid-2009.

In the meantime, the company will work on upgrading and increasing its resources.

International Minerals, which has been operating in Ecuador since 1993, says it is one of a few selected companies having discussions with the government about the new mining royalty and other issues that will be included in the new mining law.