The Vancouver-based company has a 25% interest in the project, plus an option to earn up to an 80% stake from a subsidiary of
In conducting the study, MRDI Canada assumed a 520-ton-per-day underground mine exploiting the deposit’s C and D zones, with an indicated and inferred resource of 827,400 tons grading 0.555 oz. gold per ton, or 459,500 contained ounces. The estimate is based on a cutoff grade of 0.25 oz. gold per ton.
Seventy-one drill holes and 253 sample assays were used to calculate the resource. All grades higher than 2.5 oz. per ton in the C zone and 4.7 oz. in the D zone were cut.
Capital costs are estimated at US$22.54 million.
MRDI used a discounted cash flow model based on a gold price of US$300 per oz. The model calculates an accumulative cash flow of US$31.6 million over five years and a 45.4% pretax rate-of-return. The net present value, based on a 10% discount rate, is estimated to be US$18.2 million. The estimated cash cost of production is US$149 per oz., while the capital payback period is projected at 1.2 years.
Cyprus Minerals pulled 500,000 oz. from Copperstone between 1987 and 1992. The mine was then closed, but in the mid-1990s, Royal Oak discovered a northwestern extension of the mineralization.
The new mine plan recommends driving a decline to the C and D zones from a portal in the existing open pit, close to an existing haulage road. Drift-and-fill mining is recommended, using tailings as paste backfill. Production capacity is estimated at 182,500 tons per year over a 5-year mine life.
The gold at Copperstone occurs predominantly in native form with some quartz and iron-oxide encapsulation. There are no deleterious metals or carbon minerals. Copper oxides were typically found associated with the gold mineralization.
Run-of-mine material would be crushed in a 2-stage circuit and ground in a single-stage ball mill to 80% passing 200 mesh. To produce gold dor, Asia Minerals would use an agitated leach tank system followed by a carbon-in-pulp circuit, pressure elution, electrowinning and smelting. A gravity concentrator would be used to recover coarse free gold.
The scoping study used historical data to arrive at an estimated gold recovery rate of 90%, with 413,570 oz. deemed recoverable over the mine life.
Prior to proceeding with a bankable feasibility study, Asia Minerals will carry out surface and underground drilling to establish proven and probable reserves. This work will be combined with metallurgical testing, environmental and geotechnical studies, and capital and operating cost estimation.
Asia Minerals believes the feasibility study can be completed in one year.
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