Based on results from recent exploration drilling,
Situated in Guatemala near the border with El Salvador, Cerro Blanco is a high-level epithermal deposit hosted in tuffs and volcaniclastics. It was acquired as part of a late 1998 merger with Mar-West Resources.
“We remain optimistic that with additional work, Cerro Blanco will move forward in the Glamis development pipeline,” says Kevin McArthur, president. Toward that end, more drilling is planned to expand the existing resource and to upgrade the zones in the open-pit resource.
Late last year, Glamis completed a 37-hole reverse-circulation program, bringing the total to date to 56 holes, or 8,429 metres. Based on these results, the company reported a preliminary resource calculation of 28.9 million tonnes grading 1.3 grams gold and 18.6 grams silver per tonne, equivalent to 1.2 million oz. gold and 17.3 million oz. silver.
The estimate is based on a cutoff grade of 0.5 gram gold, a gold price of US$300 per oz. and a silver price of US$5.25 per oz.
A scoping study indicates the project would be modestly profitable at current gold prices. The internal rate-of-return is pegged at 10.4%, based on capital costs of US$70 million. At full production, the operation would produce about 100,000 oz. gold-equivalent annually at a total cash cost of less than US$200 per oz.
Metallurgical tests indicate that the high-grade portion of the resource will require milling to at least 150-mesh to achieve gold recovery of 85% and silver recovery of 78%. The lower-grade material is amenable to dump leaching, though at much lower recovery rates.
In neighbouring Honduras, the company has begun construction on the US$27-million San Martin gold project. Startup there is scheduled for the fourth quarter. At last report, this project hosted proven and probable reserves of 43 million tons grading 0.025 oz. gold per ton. The stripping ratio is 0.4-to-1 (waste-to-ore).
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