Small-scale mining operations are under way at the Lo Increible project in Venezuela.
El Callao Mining (ECM-V) reports it is mining roughly 4,000 tonnes of ore per month from the Victoria deposit for processing at the Revemin mill, which is 51%-owned by Monarch Resources (MRE-T).
The monthly mining rate is expected to increase to 10,000 tonnes at an average grade of 9 grams gold per tonne. At the 10,000-tonne-per-month rate, El Callao expects to generate US$250-300,000 in cash flow per month.
The oxide resource being mined for processing at the Revemin mill is estimated to contain 120,000 tonnes grading 9 grams gold.
Cash generated from mining the oxide material will be used to fund further drilling and
feasibility work on Victoria without further dilution to shareholders. The geologic resource at the Victoria deposit was last estimated at 5.7 million tonnes grading 3.4 grams gold.
At El Callao’s annual meeting in Vancouver, Clive Johnson, president, expressed confidence that the Venezuelan government is moving toward creating a more positive fiscal and regulatory environment.
Johnson points to Venezuela’s 12% value-added tax as a major stumbling block for new projects.
He says there is a proposal to increase the tax to 16.5% but that new projects would be entitled to a 5-year exemption from the tax.
Another factor holding up investment in new gold mines in Venezuela is a 60% limit on the amount of gold exportable from a new project.
Despite the government-related problems, Johnson is impressed with the country’s infrastructure and says the company is starting to look at other investment opportunities in Venezuela and other South American countries.
El Callao can earn up to a 70% interest in the Lo Increible project.
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