Marlin begins production (December 02, 2005)

Glamis Gold‘s (GLG-T, GLG-N) contentious Marlin gold-silver mine in western Guatemala has weathered Hurricane Stan and sometimes violent protests to hit its commercial stride.

The mill is currently running at the design rate of 220 tonnes per hour with gold recoveries at 90%. Operations at the US$150 million mine cranked up in late September following 18 months of construction.

The Reno, Nev.-based miner expects Marlin to produce some 20,000 oz. of gold during the balance of the year. Beginning in 2006, the mine is slated to annually produce 250,000 oz. of gold and 3.5 million oz. of silver over 10 years. Total cash costs (net of byproduct silver credits) are pegged at less than US$90 per oz. of gold.

During its initial year, the operation will source ore primarily from the open pit, where grades exceeding 6 grams gold per tonne are currently being encountered in near-surface ore zones. The mine’s underground component is to make a significant contribution by mid-2006.

At the end of 2004, Marlin was home to proven and probable reserves of 15.1 million tonnes averaging 4.8 grams gold and 74.7 grams silver per tonne, for 2.3 million ounces of contained gold and 36.3 million ounces of contained silver. The estimate is based on a gold price of US$350 per oz. and US$6 per oz. of silver. Overall, resources amount to 20.1 million tonnes running 4.4 grams gold and 73.3 grams silver, based on a cutoff grade of 0.2 gram gold.

Meanwhile, in eastern Guatemala, Glamis recently updated the resource estimate at its Cerro Blanco project. Based on drilling in 2005, indicated resources at Cerro Blanco total 1.27 million oz. at an average grade of 15.7 grams gold, with another 670,000 oz. of inferred resources at an average grade of 15.3 grams. The estimates are based on a cutoff grade of 8 grams gold-equiv. Indicated silver resources come to around 5.9 million oz. at an average grade of 72 grams; inferred resources total 2.6 million oz. at an average of 59.6 grams.

The new resource includes results from drilling along 900 metres of strike length to a depth of 350 metres. The deposit remains open to the north and south and at depth, with surface sampling suggesting a possible 1.5-km extension to the north and an unknown distance to the south beneath valley fill.

Earlier this year, Glamis identified a new mineralized zone immediately north of the known resource. In all, some 11,400 metres worth of drilling has been completed; assay results are in for 34 holes.

Glamis says the grades and mineralization encountered are similar to those of the existing resource. The mineralization is described as quartz veins with free gold and electrum. Conventional milling techniques have yielded recoveries exceeding 90% at a nominal 200-mesh grind size.

Drilling with 8 rigs continues, as does environmental baseline work, permitting, hydrology studies, facility scoping and metallurgical testing. The work is in anticipation of a feasibility study of a proposed underground mine. The study is due out in late 2006; pending a positive outcome and development, production could conceivably begin by late 2008.