Aurogin gears up for gold production in Guatemala (April 12, 2006)

With plant construction going ahead at its operations in Guatemala, the market is recognizing Aurogin Resources (AUQ-V) for making good on one of its targets. What remains to be seen is if it will come through on its other.

In two days of trading since the company announced heap-leach pad construction at its El Sastre project, the company’s shares have climbed roughly 30% or 8.5.

In Toronto on Apr. 12 they were trading at 36.5 on roughly 2 million shares traded over the two days.

“It’s just a matter of following through on promises,” says Aurogin’s president John Paterson. “Like getting it into production and getting the resource up to a million ounces.”

Paterson says the Toronto-based junior will start pouring gold at its El Sastre Main zone — one of four zones at the project — by the fourth quarter of 2006.

And while gold is getting processed there, Aurogin will be drilling at its other three zones in an effort to hit the one million oz. mark.

Paterson says while the company is putting roughly $500,000 into heap-leach pad and metallurgical plant construction at the main zone, it is putting $1 million into exploring the other three zones around it. He said the company hopes to have feasibility on surrounding zones completed in 2007.

Currently NI 43 101 compliant estimates put the resource at the El Sastre Main zone and the Lupita zone at 685,000 oz.

Lupita has 518,000 oz. of inferred resource, taken from 13 million tonnes averaging 1.25 grams gold. El Sastre Main zone stands at 49,251 oz of indicated resource, taken from 370,000 tonnes averaging 4.14 grams gold, and 117,265 oz of inferred resource taken from 1.2 million tonnes averaging 3.13 grams gold.

In a press release issued on Apr. 11, the company describes El Sastre Main as a high-grade, near-surface oxide gold deposit. Aurogin says it will produce 20,000 oz. of gold in its first year of operation with costs slated to come in at just under $200 an oz.

Paterson says initially gold production will move at a modest pace while the company gets a better feel for things.

“When you start mining you don’t know how it will behave on the heap. It’s a big jump from column testing to actual production,” Paterson says. “We’re starting off small with 15,000 tonnes in the first lift of material. We’ll leach it and keep expanding it as we can.”

El Sastre is one of two core projects for Aurogin, the other being and the Lone Mountain Project in Nevada. Lone Mountain is on the Battle Mountain-Cortez Gold Trend, which has produced some 23 million oz of gold over the past 30 years, making it the second most productive belt in the state after the Carlin District.