Ho Gan gets positive prefeasibility

A prefeasibility study of the Ho Gan gold deposit in central Vietnam has concluded that small-scale production could be profitable.

Consulting firm Micon International, hired by 80%-owner Olympus Pacific Minerals (OYM-V), examined the possibility of mining from shallow open pits, starting at 500 tonnes per day and rising to 800 tonnes after seven months.

Ho Gan is one deposit on the Bong Mieu property, about 80 km south of Da Nang. Olympus Pacific owns 80%, and two local companies, the remaining interest.

The operation has a low capital cost — only US$4.5 million — and is estimated to have an internal rate of return of 86%, assuming a gold price of US$400 per oz. The pits would produce just over 50,000 oz. gold over a mine life of 38 months.

Ho Gan has a measured and indicated resource of 1.1 million tonnes grading 2.2 grams gold per tonne, which Micon modelled as a proven and probable reserve of 858,000 tonnes at 2.4 grams per tonne. The pit designs show stripping ratios near 1.

The proposed plant — a ball mill feeding gravity and flotation circuits, with concentrates from both going to a cyanide leach reactor — is expected to have a recovery rate around 81%. Cash costs were estimated at US$188 per oz.; total costs, at US$210.