Int’l Minerals mulls options at Gaby

A prefeasibility study for International Minerals’ (IMZ-T, IMZLF-O) Gaby open-pit gold project in Ecuador found that all four processing options tested would be too costly at a base case gold price of US$650 per oz.

The most sustainable option, whole-ore grinding followed by a carbon-in-leach (CIL) circuit, would only be feasible at a gold price of US$850 per oz. or more. It would yield an 89% gold recovery rate, with no copper.

Three process options considered a 20,000-tonne-per-day mining operation while one, a heap-leach cyanide option, considered a 25,000-tonne-per-day operation.

The study suggested that the economics could be improved by building a plant with significantly greater capacity than 20,000 tonnes per day.

Vice-president of investor relations Wendy Yang says the study is a starting point.

“What we were trying to show is that at 20,000 tonnes per day, it doesn’t break even until US$850 oz. gold, but if we scale up our plan, we can improve economics quite a bit,” Yang says.

The prefeasibility included an updated resource calculation for Gaby, which is about 62%-owned by International Minerals. A government agency and a private owner hold the remainder, but the company is in negotiations to increase its stake to a full 100%.

Measured and indicated resources now stand at 308 million tonnes grading 0.63 gram gold per tonne and 0.1% copper, containing about 6.2 million oz. gold and 284,000 tonnes copper.

Inferred resources measure in at 122 million tonnes grading 0.65 gram gold per tonne and 0.08% copper, for nearly 2.6 million oz. gold and 95,000 tonnes copper.

A cutoff grade of 0.4 gram gold per tonne was used.

Yang says the company will now look at mining up to 50,000 tonnes per day using whole-ore grinding with CIL; copper recovery won’t be considered.

“The copper didn’t make enough of a difference,” Yang says. “With the price of copper, we feel the better option is to scale up the gold recovery.”

At 20,000 tonnes per day, the company could produce 2.3 million oz. gold over 14 years. Initial startup capital is pegged at US$432 million and total costs, including capital, would be about US$783 per oz.

The project consists of two de-good, posits, Main Gaby and the Papa Grande deposit, 1.5 km east.

The property is next to the Pan- American Highway and is about 130 km south of Guayaquil port.

International Minerals plans to finish an optimization study by mid-year and if the results are the company will go ahead with a feasibility study to be completed by mid-2009.

In the meantime, the company will work on upgrading and increasing resources.

International Minerals, which has been operating in Ecuador since 1993, says it is one of a few selected companies having discussions with the government about the country’s new mining royalty, announced in December (T.N.M., Feb. 4-10/08) and other issues that will be included in the new mining law.