Vancouver — An updated prefeasibility study has boosted proven and probable reserves at the Paredones Amarillos gold project operated by
Reno-based Mine Development Associates updated a feasibility study completed by a previous operator in 1997. Metallurgical and mine-design consultants also provided technical input for the new study, which complies with National Instrument 43-101 guidelines.
Proven and probable reserves at Paredones Amarillos now stand at 48.9 million tonnes grading 1 gram gold per tonne, or about 1.5 million contained ounces. This estimate was based on a gold price of US$400 per oz. and an internal cutoff grade of 0.38 gram.
The reserves were determined for a proposed open-pit mine with a strip ratio estimated at 3.48:1 waste-to-ore.
President Michael Richings notes that the new study shows an increase in proven and probable reserves of 290,000 oz. gold over previous estimates. He adds that the company’s strategy to acquire “out-of-the-money gold resources” during times of low prices, and then upgrade them with new engineering studies, has shown positive results at Paredones Amarillos.
Vista Gold is aiming to develop an open-pit mine capable of producing an average of 113,000 oz. gold annually over a mine life of 12.5 years. The proposed flotation-leach plant, sized at 11,000 tonnes per day, is expected to achieve a 90% recovery rate for gold.
At a gold price of US$400 per oz., the pretax rate of return for the proposed mine was estimated at 4%, while the undiscounted cash flow was estimated at US$37 million. A higher price of US$460 per oz. would boost the estimated pretax rate of return to 12%, while the estimated cash flow would rise to US$122 million.
A smaller mine plan was designed to further the return on investment. Using a gold price of US$400 per oz., the pretax rate of return was estimated at 7%, and the undiscounted cash flow was estimated at US$41 million. At a higher price of US$460 per oz., the smaller mine would boost the estimated pretax rate of return to 17% and the estimated undiscounted cash flow to US$107 million.
The company holds other gold projects in Mexico and the western United States, including several past-producers in Nevada.
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