Castle Gold (CSG-V) says a small tweak to its El Castillo gold mine in Durango, Mexico will take a noticeable chunk out of its operational costs at the mine.
The company plans to spend US$1 million on a portable screening deck that will screen fine fraction less than 3/4 of an inch, so that high-grade ore can bypass its crusher and be stacked directly on the heap leach pads.
“This relatively small US$1 million total investment offers an impressive 170% rate of return and ten month payback based on operating cost reductions of US$34 per ounce,” Thomas Atkins, president and CEO of Castle Gold said in a statement.
Based on US$34 per ounce operating cost savings, enhanced gold recoveries and a US$800 per ounce gold price, the company says its annual cost savings will be US$1.7 million.
Over the current mine life of 10 years and assuming a 5% discount rate and a life-of-mine average gold price of US$750 per ounce, the investment produces a net present value of US$10 million.
Recently, the company also announced savings resulting from the use of more efficient, larger scale mining equipment.
The company says it is aiming to have the screening plant operational in time to coincide with a previously announced ramp-up of mine production towards 50,000 ounces per year.
In Toronto on Apr. 2 – a day when most gold miners were hurt by the price of gold falling US$24 to finish at US$903 – Castle Gold managed a tidy 9% or 5¢ gain to finish the day at 62¢ on roughly 535,000 shares traded.
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