Guyana Goldfields (GUY-T) will release the findings of a definitive feasibility study on its Aurora gold project in late February following a four-week peer review, the company says, and a revised resource estimate will be out before the end of March. Official development and construction is expected to start officially in the second quarter of 2012.
In the meantime, the exploration and development junior says it can confirm some key parameters of its flagship project, which include a combination of open pit and underground mining over a mine life of twenty-two years based on Aurora’s current measured and indicated resource of 47.04 million tonnes grading 3.83 grams gold per tonne for contained gold of 5.71 million ounces.
Surface and open-pit development will begin in the second quarter of this year and continue for 24 months. Production from the open pit is expected to start in the second quarter of 2014 and continue for eight years. The mining operation will include six pits within a square mile with bottom depths varying from 70-315 metres.
Underground development will start in 2015 and capital expenditure will come entirely from cash flow. Commercial production will start in 2019 and last for sixteen years.
A SAG and Ball mill combination will have a design throughput of 8,000 tonnes per day and average annual gold production in the second through ninth years is estimated to be about 250,000 ounces of gold.
On-site heavy fuel oil power generators will be used for power.
The Aurora property is made up of a number of gold deposits on the eastern side of the Aurora zoned intrusion in the Cuyuni greenstone belt of the Guiana Shield in the Amazon Craton.
Guyana Goldfields, which received its mining license for Aurora from the government of Guyana in November 2011, has operated in the South American country since 1996. The company has about $36 million in cash and short-term bank guaranteed investment certificates and no debt.
At presstime in Toronto the company was trading at $7.60 per share within a 52-week range of $6.32-$10.58 and has about 83 million shares outstanding.
Dan Rollins of UBS Investment Research holds a buy rating on the stock with a 12-month target price of $11.25 per share. Adam Graf of New York-based investment bank Dahlman Rose & Company also has a buy rating on the company with a price target of $14.34 per share.
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