Vancouver —
Based on a cutoff grade of 0.2 gram gold per tonne, the measured and indicated resource now stands at 140 million tonnes averaging 0.88 gram gold per tonne, or 3.9 million contained ounces. When the cutoff grade is raised to 1 gram per tonne, the resource is 33 million tonnes averaging 2.17 grams gold, or 2.3 million contained ounces.
The total resource, including measured indicated and inferred portions, is 194.8 million tonnes averaging 0.77 gram gold per tonne, or 4.8 million contained ounces, when a cutoff of 0.2 gram is employed. At a lower cutoff of 1 gram, the total changes to 37.3 million tonnes of 2.15 grams gold, or 2.58 million oz.
A total of 593 drill holes, or 95,000 metres of drilling, in 359 reverse-circulation and 172 core holes, were used to calculate the resource. In addition to underground drill data, the estimate was based on a new geological interpretation.
The new estimate is part of an ongoing feasibility study by Arizona-based M3 Engineering & Technology.
Mulatos consists of high-grade mineralized structures within a broad zone of lower-grade gold mineralization. Underground drilling suggests oxidation in the deposit is more extensive than previously thought.
High-grade gold assays were capped at 35 grams per tonne prior to the compilation of drill-hole data.
The deposit is on the Salamandra property in the Sierra Madre Mountains, 220 km east of Hermosillo in Sinaloa state. Former owners Placer Dome and Kennecott Minerals envisioned a 17,500-tonne-per-day open-pit mine. Capital costs were projected to be US$120 million, with operating costs for the heap-leach operation pegged at US$5 per processed tonne at a gold recovery rate of 66%. The 1999 study projected only a marginal profit for a large, bulk-tonnage, heap-leach operation at gold prices below US$325 per oz.
A 2002 scoping study by Denver-based Pincock Allen & Holt indicated that the higher-grade core of the deposit, known as Estrella zone, could economically produce 100,000 oz. gold annually over 12 years.
The study envisioned total production of 1.2 million oz. gold at an average cash operating cost of US$169 per oz., with initial capital costs amounting to US$34 per oz. At US$300 per oz. gold, capital costs could be recovered over 2.8-4.3 years.
The scoping study took into account a development plan for mining the Estrella zone selectively, followed by heap leaching using 3-stage crushing. Gold recoveries range from 55% for sulphide-rich material to more than 90% for oxides, averaging 67% over the life of the mine.
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