Corner Bay updates Alamo Dorado resource

Consultants for junior explorer Corner Bay Minerals (BAY-T) have calculated a new resource for the Alamo Dorado silver project, in Sonora state, Mexico. The estimate shows a total resource, in all categories, of 79.5 million tonnes grading 46 grams silver and 0.18 gram gold per tonne.

The new resource, calculated by Tucson-based Mintec, used recent drill results from the property, which has now been evaluated with 67 reverse-circulation holes totalling 17,872 metres of drilling. Four large-diameter diamond drill holes also figure in the estimate.

The total resource estimate used a cutoff grade of 10 grams silver (allowing for gold credits). Using a higher cutoff grade of 25 grams silver, Mintec modeled a proposed open pit that would enclose a minable resource of 52.5 million tonnes with an average grade of 63 grams silver and 0.23 gram gold.

If all material below the 25-gram cutoff is treated as waste, the pit design has a stripping ratio of 1.8-to-1. Metallurgical tests indicate that heap leaching could recover gold and silver from this minable resource, which consists entirely of oxide material.

Mintec developed a mine plan from the reserve model, under which the material with more than 25 grams silver per tonne would be mined, while the rest of the resource (above a 10-gram cutoff) would be stockpiled until metal prices increase.

The planning study assumed a heap-leach plant capable of recovering 70% of the silver in the higher-grade material (above 90 grams per tonne) and 65% in the lower-grade (25 to 90 grams). Gold recovery was estimated at 85%.

Mining costs are estimated at US75 per tonne; processing costs, at US$3 per tonne. The study assumed that the silver price would average US$5.28 per oz. and gold would fetch US$300.

Under the plan, an open pit would be developed in three phases, with progressively lower grades and higher stripping ratios. The first phase, which would take out a reserve of 11.9 million tonnes grading 115 grams silver and 0.28 gram gold, would have a stripping ratio of 0.87-to-1.

The higher grade during the earliest phase yields a relatively low cash cost, with silver being produced at US$1.55 per oz. Over the 10-year life of the mine, the cash production cost is projected to be US$2.96 per oz.

Corner Bay says it is now “reviewing its options” to finance a bankable feasibility study on Alamo Dorado. The company has engaged Deutsche Bank Securities as a financial advisor, indicating that a deal with a major company may be one of Corner Bay’s preferred options.