In less than a year, San Martin in southern Honduras has graduated from the exploration stage to approved-mine status with a 1.5-million-oz. gold resource.
“With its low cash and total costs, San Martin is a robust project even at recent low gold prices,” says Glamis President C.K. McArthur. “At $300 [per oz.] gold, it is expected to provide strong earnings.”
The project’s cornerstone is the Rosa and Palo Alto hot-spring epithermal deposits, which have a combined proven and probable reserve of 39.3 million tonnes grading 0.86 gram gold per tonne, equivalent to 1.1 million contained ounces. A gold price of US$275 per oz. was used to calculate the reserves, and the waste-to-ore stripping ratio is a low 0.4-to-1.
Capital costs are pegged at US$27 million; total cash costs, at less than US$210 per oz. At a gold price of US$275 per oz., the project would have a 22% rate-of-return, whereas, at US$300, this rises to 29%. Glamis will fund development with existing cash reserves.
At startup in 2000, the mine will produce at the annual rate of 14,000 oz., though, at full operation, this is expected to increase to 80,000 oz. derived from 4 million tonnes.
The deposits contain three distinct types of ore:
- a blanket of highly-altered schist, which represents 68% of the contained ounces and has a recovery rate of 73%;
- an altered schist, which represents 29% of the contained ounces with a recovery rate of 60%; and
- an unoxidized schist, which represents only 3% of the contained ounces with a recovery rate of 40%.
The Rosa deposit hosts proven and probable oxide reserves of 20.9 million tonnes grading 0.9 gram gold, equivalent to 600,000 contained ounces. The waste-to-ore stripping ratio is 0.18-to-1, with a pit area of about 750 by 750 metres.
Palo Alto, 700 metres to the west, hosts proven and probable reserves of 18.4 million tonnes grading 0.82 gram gold, equivalent to 500,000 contained ounces. The waste-to-ore stripping ratio there is 0.66-to-1, with a pit area of 1,500 by 500 metres.
Additional reserve potential has been identified west of Palo Alto in the newly discovered Palo Ralo zone, and Glamis reports that the processing mill can be easily expandable to increase throughput if additional reserves are developed.
The company does not anticipate any difficulty obtaining permits and is proceeding with site preparation and ordering of equipment. Construction of the mill will begin later this year.
Glamis is currently exploring in Honduras, Guatemala, Panama and El Salvador, while operating the Rand and Picacho mines in California and the Marigold, Dee and Daisy mines in Nevada. Total production is expected to exceed 200,000 oz. next year and 250,000 oz. in 2001.
San Martin is about 55 miles north of the Honduran capital, Tegucigalpa.
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