Lyon Lake works toward startup at Beta Vargas

The first company to get a production permit from the Costa Rican government in 11 years is Montreal-listed Lyon Lake Mines, which can now develop its Beta Vargas gold project.

Beta Vargas, 150 km west of San Jose, has reserves, in all categories, of 2.9 million tonnes grading 1.3 grams gold per tonne. Feasibility work has settled on an open-pit design with a stripping ratio of 2-to-1. The company hopes to begin production is six months.

The deposit is metallurgically uncomplicated and testing has achieved recoveries in the 77-85% range, though some recoveries have rated more than 90%. The operation will employ heap leaching, and the feasibility study by Kilborn SNC Lavalin has assumed a conservative gold recovery of 80%.

Production costs are expected to be around US$235 per oz.

The project, which is 3 km from the Inter-American Highway (Central America’s main drag), has electrical power on site. The company has an option of buying a 900-tonne-per-day mill from a local mine. The plant has an expansion capacity of 1,800 tonnes.

The property also offers exploration potential with a small gold deposit to the west, and geophysical and geochemical targets along strike from the main deposit.

“The biggest concern was the permitting,” says Guy Hebert, Lyon Lake’s president. Environmental concerns caused the government to place a moratorium on mining permits, but permits were still not being granted, even after the suspension was lifted. “We have to do everything right,” says Hebert, recognizing the importance of the operation’s environmental performance.

The mine provides a good foundation for Lyon Lake’s interest in Costa Rica.

Apart from Beta Vargas, the company has the Esperanza property in the northeastern part of the country, near the Nicaraguan border. That property adjoins the western boundary of Placer Dome’s (TSE) Las Crucitas property, where the major is outlining a major gold deposit. Barrick Gold (TSE) is working to the west of both Lyon Lake and Placer Dome.

Elsewhere in Costa Rica, Minera Rayrock (TSE) has received a feasibility study for the Bellavista gold project. Development plans are based on a combined open-pit and underground operation.

The project hosts almost 2 million oz. gold contained in 37.4 million tonnes grading 1.63 grams gold per tonne, using a 0.7 gram cutoff grade. Minable reserves total 905,000 oz. gold-equivalent, contained in 13 million tonnes grading 2.1 grams gold.

Rayrock has filed an environmental impact study and optimization studies are under way to improve project economics. Canarc Resource (TSE) holds an 18.3% net profits carried interest in Bellavista.