Using the Joe Mann gold mine in Quebec as its production cornerstone, Campbell Resources (CCH-T) has met with considerable success in its efforts to seek and develop new opportunities in Central America.
The Toronto-based company currently operates the Santa Gertrudis mine in Mexico, and has a third gold mine under development in Panama which is scheduled to start production late this year.
Campbell acquired the Cerro Quema gold project, situated 150 miles southwest of Panama City in Las Santos province, for US$8.9 million and 1.4 million shares in March 1996.
In November of last year, the company released the results of a positive feasibility study for an open-pit, heap-leach mine targeted to produce 50,000 oz. gold annually over a mine life of six years.
Earlier this year, Campbell announced it had received final approval and all necessary permits to proceed with development of Cerro Quema.
Capital costs are estimated at US$32.8 million, including provisions for contingencies. The project will be funded by operating cash flows and the completion of a US$22-million financing in early 1996, which contributed to year-end working capital of $65.5 million.
The feasibility study was based on minable reserves of 8.7 million tonnes grading 1.16 grams gold per tonne (0.034 oz.), or about 330,000 contained ounces. These reserves are within two deposits, La Pava and Quema-Quemita, which are about 1 mile apart.
Minable reserves have an average stripping ratio of 0.64-To-1, and mining will be carried out by means of conventional open-pit methods, using front-end loaders and a fleet of 40-Tonne articulated haulage trucks.
The ore will undergo single-stage crushing and partial agglomeration before being trucked to a valley-fill, permanent leach pad. The ore is highly oxidized and metallurgical tests indicate recoveries of at least 86%, with most of the gold recovered within the first 20 days. Cash costs are estimated to be US$180 per oz. gold produced.
The gold deposits at Cerro Quema are hosted in a sequence of Upper Cretaceous volcanic rocks. The host rocks exhibit extensive and zoned alteration to quartz-pyrite-clay assemblages, which are characteristic of high sulphidation epithermal gold systems.
The favorable altered volcanic horizon extends in an east-west belt, about 12 km long by 2 km wide. And while several exploration targets have been identified in this belt, they have yet to be drill-Tested. Campbell intends to launch an exploration program to test these targets and find new ones once the mine infrastructure is in place.
The access road has been upgraded, mine construction is under way and preproduction mining is to begin in the third quarter.
Santa Gertrudis
Campbell’s other gold operation in Central America is Santa Gertrudis, an open-pit, heap-leach operation in Mexico’s Sonora state.
Gold production last year was 54,400 oz., compared with 55,600 oz. in 1995.
Grades were somewhat lower in 1996, whereas stripping ratios were higher, resulting in cash operating costs increasing to US$227 from US$205 in 1995.
At last report, proven and probable reserves at Santa Gertrudis stood at 1.6 million tonnes grading 1.79 grams gold per tonne (0.052 oz. per ton), plus 1.1 million tonnes of 1.99 grams (0.058 oz. per ton) in the possible category.
An average of 3,000 tonnes is mined per day, 365 days a year, using hydraulic shovels, front loaders, drills and a fleet of 50-Tonne haulage trucks. Two 85-Tonne haulage trucks were acquired last year to allow for more efficient prestripping of new deposits.
Campbell recently launched a $4.3-million exploration program to explore for new discoveries on its 87-sq.-mile property. This work will include at least 30,000 metres of drilling to follow up several gold zones identified last year, as well as continue property-wide exploration.
Campbell plans to spend a total of $5.9 million on exploration this year, chiefly in areas near its existing operations.
In 1996, the company produced a total of 124,800 oz. from its mines in North and Central America, up 4% from the 1995 level of 120,100 oz. Average cash operating costs were US$252 per oz. last year, compared with US$247 in 1995.
Campbell expects its annual production rate to reach 180,000 oz. once Cerro Quema achieves production in 1998.
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