Vancouver — With a positive feasibility study in hand,
The report, prepared by Met-Chem Canada, outlines a probable reserve of 4.4 million tonnes grading 6.2 grams gold per tonne, or 868,000 oz. The reserve is concentrated in the West Mine area, above the 700-metre level.
Capital expenditures before production are pegged at $84 million. The proposed underground mine would produce 150,000 oz. gold annually over a lifespan of 5.5 years. Cash costs are estimated at US$233 per oz. gold, with a payback period of 3.5 years.
The feasibility study outlines a 5.5-year mine life, based on reserves above the 700-metre level.
“The Casa Berardi property is thirty-seven kilometres long,” explains Aurizon President David Hall. “The area of previous mining activity, between the West mine and the East mine, is five kilometres long, and the feasibility study really relates to ounces contained within one kilometre of the West Mine area and only down to a depth of seven-hundred metres. It’s based on reserves, above that elevation, of eight-hundred and sixty-eight thousand ounces, which is approximately thirty per cent of the total ounces on the project today. The purpose of designing the feasibility study in this manner is to put the property into production as quickly and as cheaply as possible.”
Technical problems encountered prior to the mine’s closure in 1997 are addressed in the new study.
An additional scoping study, also by Met-Chem, reviewed indicated resources in the high-grade 113 zone, below a depth of 700 metres. Underground drilling in late 2004, on 35-metre intervals, contributed to an updated calculation of 838,000 tonnes grading 13.7 grams gold, or 369,000 oz. The resource is not included in the feasibility study.
Definition drilling confirms that the 113 zone runs to at least 900 metres below surface and has a true mineralized width averaging more than 9 metres, with gold grades typically in the range of 5-20 grams per tonne. Among the better drill results were 13 metres (true width) grading 35.8 grams per tonne, 15.5 metres of 20.3 grams, and 18.3 metres of 28.7 grams.
The 113 zone is a 20-to-70-metre-wide body of gold mineralization that adjoins the Casa Berardi fault. A mineralized envelope, dipping away from the fault, encloses folded quartz veins with gold. The highest-grade material forms steeply east-plunging shoots.
In the East Mine area, Geostat Systems International prepared a mineral reserve estimate on near-surface ore remaining in the crown pillar. A probable reserve of 594,000 tonnes grading 4.2 grams gold is considered minable by open-pit methods. About 40 metres of overburden would require stripping.
In February, drilling will begin from a crosscut on the 550-metre level. An extension of the 550-level drift to the east will allow detailed drilling on two other new zones: the 118 and 122.
The Casa Berardi mine operated from 1988 to 1997, during which time it produced 688,000 oz. gold from underground at the East and West mines.
Aurizon has a market capitalization of $170 million, given its 103 million shares outstanding and recent trading price of $1.65 per share.
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