Greenstone, Boliden expect to open gold mine in Panama in early

Less than a year after bringing its Oronorte property in Columbia into production, Greenstone Resources (TSE) is getting ready to hatch a second Latin American gold mine.

At a capital cost of US$17.6 million, Greenstone and partner Boliden International Mining of Sweden are planning to have the Santa Rosa project in Panama up and running by April, 1992. Greenstone owns 49% of the project and the other 51% is held by Boliden.

While Santa Rosa will be the first heap leach mine and the first mining development in Panama for many years, Greenstone President Ian Park is confident that the joint venture can achieve its targets on time and on budget.

When The Northern Miner spoke to him recently, Park was negotiating to obtain Greenstone’s share of financing in the belief that Boliden’s involvement will be “a big help.”

Based on an independent feasibility study conducted by Nevada consultants Kappes Cassiday, the operation should be capable of producing 60,000 oz. per year at a rate of 5,500 tons per day.

The study also confirms preliminary reserves of 16.4 million tons grading 0.051 oz. gold per ton, most of which are contained in the Santa Rosa and smaller Alto de la Mina zone. About 500 metres (1,640 ft.) apart, the two deposits are on a ring-fault structure forming the rim of a major circular volcanic structure nearly nine miles along the periphery.

In future, Greenstone is hoping that minable reserves of 7.2 million tons grading 0.053 oz. can be expanded when more recent discoveries are taken into account.

But meanwhile, under a stage one production plan, operator Boliden will construct a 350×450-metre (1,148×1,476-ft.) heap leach pad capable of holding 3.1 million tons of material and will phase in another two pads in later years.

Then, by harvesting new targets including the Cerro Otero and Libertad deposits, the joint venture plans to expand production to 100,000 oz. annually in the third year of operations.

A cutoff grade of 0.016 oz. used in planning the pit design is based on a gold price of US$375 per oz., according to Park. Gold was trading recently at US$344 per oz. on the spot market. The feasibility study indicates that gold recoveries in excess of 74% can be obtained from carbon absorption columns followed by electrowinning to produce gold dore bars.

Within these parameters, Greenstone says the cash operating cost would be US$196 per oz., well below the North American average of US$258. The feasibility study didn’t have much impact on Greenstone’s share price, which Park claims is being beaten down along with other issues by the slump in the gold price. Greenstone traded recently at $2 in a 52-week range of $1.70 and $3.90. The company expects to produce about 15,000 oz. gold from the Oronorte project in Columbia this year.