Andean’s pilot plant hits its stride

Just 12 months after beginning the project, Andean American Mining (AAG-V) has its Santa Rosa pilot plant in southeastern Peru, running at commercial production levels.

During the month of March, 13,334 tonnes of ore running 3 grams gold per tonne were agglomerated and loaded onto the leach pads. Most of that came in the latter half of the month. During the thirty days beginning March 16, 17,075 tonnes of ore at the same head grade were stacked on the pads.

During the same 30-day period, 23,000 tonnes of ore were added to the stockpile.

The production figures exceeded 55% of the nominal name plate capacity of the plant.

To facilitate accounting cut-offs, the company considers March 1 as the first official day of commercial production.

Full production and financial results, including final capital costs will be released shortly.

The pilot plant delivered its first 7.8 kg of gold concentrates for refining late last year. The shipment sold for US$282.60 per oz.

At a daily rate of 1,000 tonnes, the plant is expected to last 4.5 years. The estimate is based on a resource of 1.5 million tonnes grading 3.85 grams gold and 56.4 grams silver per tonne.

Andean is confident that exploration will boost the gold grade to 7-9 grams.

Last year, Placer Dome (PDG-T) inked a deal with Andean to earn a majority interest in the ground surrounding Santa Rosa. The major can earn an initial 55% stake by spending US$3.6 million on exploration and paying US$2.2 million through to January 2004. It can increase its interest to 60% by proceeding with a feasibility study.

Situated 120 km southwest of Cuzco, Santa Rosa consists of 20 concessions covering 133 sq. km. Placer Dome has identified more than 15 targets in a structural trend measuring 15 by 4 km. Andean American has excluded the mine area from its agreement with Placer, though this will change if a production decision is made.