Astur releases Salave PEA

Vancouver – Astur Gold (AST-V) has released a preliminary economic assessment on its Salave gold project in Spain that shows the potential for an open pit, underground or a combined operation.

The company is looking at several scenarios because the project falls within a coastal area of northern Spain that recently banned open pit mining. Astur is working to overturn that ban, but is keeping other options open.

The open pit option promises the greatest returns in the long run, but the underground high-grade option is still viable and brings in 10-20% higher internal rates of return (IRR). The assessment also looked into both bio oxidation and pressure oxidation processing methods with mild trade-offs between the two.

The large open pit option would see Astur mining 21 million tonnes grading 2.87 grams gold per tonne over 18 years, and would includ a small underground component near the end. Annual production is estimated at 107,500 oz. at US$419 per oz. for pressure oxidation and US$435 per oz. for bio oxidation.

Using US$1,100 per oz. gold, the scenario would have a pretax net present value, with a 5% discount, of US$576 million with pressure oxidation or US$548 million with bio oxidation. The IRR falls between 34% and 36%.

Capital costs for open pit range from US$133 million to US$154 million, with payback in about 3 years.

Undergound sees a 10-year mine life with the company producing 9.8 million tonnes grading 4.23 grams gold. Average annual production is 133,300 oz. at a cash cost of US$529 per oz. for pressure oxidation and US$547 per oz. for bio.

Using the same metrics as open pit, the NPV comes in at US$391 million for pressure and US$374 million for bio processing, and the IRR comes in at 46% and 53% respectively.

Capital costs range between US$125 million and US$147 million, with payback in roughly 2 years.

Finally as a balance between ore recovery and surface disturbance, the combined option would see an underground option with a smaller, 400-metre diameter open pit.

Over a 14-year mine life Astur could produce 543,000 oz. from open pit and 1 million oz. from undergound mining. Annual production would be 106,500 oz. at between US$454 per oz. and US$467 per oz.

The NPV would be US$486 million or US$464 million and the IRR 47% or 54%, with pressure oxidation and bio oxidation respectively.

Capital costs are in line with the other scenarios, ranging betwen US$125 million and US$146 million, and payback would be about 2 years.

All the models were based on the established resource of 17.95 million tonnes grading 2.92 grams gold for 1.7 million oz. gold.

The company acquired the project from Lundin Mining (LUN-T) in 2005. While Astur is pushing forward with development of the project, it will continue to persue legal action if unable to mine the deposit.

An independent survey, commissioned by Astur, on five communities near the project showed that of those with an opinion on the issue 74.4% were in favour of developing the Salave deposit.

Astur’s share price was up 9¢ or 5% to close at $2.09. The company has a 52-week share price range between 45¢ and $2.20, the high having been reached in mid-day trading after the latest news. Astur has 34 million shares outstanding.