Even with the approval for an environmental impact study from Chilean authorities in hand, Placer Dome (PDG-T) says it doesn’t plan to begin construction of the Cerro Casale copper-gold project in northern Chile, at current low gold prices, according to Reuters.
A 1999 feasibility study of the project indicated that the US$1.4-billion project is technically feasible, but it also set a gold price target of US$350 per oz. for mine development.
“We are not going to develop the mine until gold prices improve,” Felipe Ruiz, Placer Dome’s regional director of public affairs, told Reuters.
“Three-hundred-fifty dollars per ounce is the gold price we are waiting for. There has to be a trend indicating that prices are heading toward that level and that is not happening,” Ruiz added.
Cerro Casale, which is situated at an altitude of 4,000 metres in the Andean mountains of northern Chile, is envisaged as a open-pit operation with average annual production projected at 975,000 oz. gold and 287 million lbs. copper over a 18-year lifespan.
A final feasibility study by Placer in early 2000 indicated mineable proven and probable reserves tallying to 1.04 billion tonnes averaging 0.69 gram gold and 0.26% copper, using a gold price of US$350 per oz., and a copper price of US95 per lb. At a cutoff grade of 0.4 gram gold per tonne, measured, indicated and inferred resources total 1.3 billion tonnes running 0.7 gram gold and 0.27% copper. Placer has a 51% stake in Cerro Caslae, Arizona Star Resource (AZS-V) has 25% and Bema Gold holds the remaining 24%.
During January, gold has averaged about US$281.73 per oz.; copper averaged just more than US68 per lb.
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