Vancouver — The results of several studies have prompted
The Vancouver-based company received a bankable feasibility study and an “initial optimization” study by an independent engineering firm. Both studies envision a large-scale, open-pit, heap-leach mine, which Minefinders hopes to start building later this year.
The feasibility study was for a base case of 25,000 tonnes per day, whereas the other study examined the “initial optimized” rate of 18,000 tonnes per day. Both call for 3-stage crushing and the Merrill-Crowe process for metal recovery after heap leaching.
The base case was predicated on proven and probable reserves of 78.7 million tonnes, containing 1.9 million oz. gold and 104 million oz. silver, using a gold price of US$375 per oz. and a silver price of US$5.75 per oz.
At a daily production rate of 25,000 tonnes, annual production would be about 160,000 oz. gold and 5.8 million oz. silver, based on a mine life of nine years. The waste-to-ore stripping ratio would be 3.3:1. Total production costs are estimated at US$230 per oz. gold-equivalent (at US$400 per oz. gold and US$6 per oz. silver), providing a pre-tax rate of return of 13.5%.
Direct and indirect capital costs for the larger mine are estimated at US$172.2 million. The smaller mine would incur a total capital cost of US$131.1 million. This alternative scenario is based on higher-grade reserves of 72.5 million tonnes grading 0.84 gram gold and 44.5 grams silver. The smaller mine would have a higher stripping ratio (3.7:1.) but a longer life, at 12 years. Total production costs are projected at US$218 per oz. gold-equivalent.
The alternative plan offers a 20.5% rate of return, which the company believes could be enhanced by ongoing studies as engineering continues at the project.
The ongoing studies will examine total resources at Dolores, which stand at 101 million tonnes grading 0.84 gram gold and 40.8 grams silver in the measured and indicated categories. This resource includes reserves and uses a cutoff grade of 0.3 gram gold-equivalent. The project also hosts an additional 28.1 million tonnes in the inferred category.
The final optimization study for Dolores will include a study of quaternary crushing and mill options that could benefit present reserves, as well as additional resources, including tonnage amenable to underground mining techniques.
If all goes as planned, Minefinders expects to achieve full production at Dolores in the second quarter of 2007.
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