Leach tests are proceeding at the Cieneguita project in northern Mexico. Glamis Gold (TSE) is earning a 60% interest in the project from Aquiline Resources (VSE) by advancing it through feasibility to a production decision.
Glamis is conducting a 10,000-ton leach test and has finished constructing the pads and pond. The company had hoped to start stacking material on the test pad in August, but heavy rains delayed the work.
Irene Wilson, president of Aquiline, said stacking should begin shortly, with leaching set to start by the end of October. She said the 120-day leach cycle will likely extend to 150 days before all the data can be compiled. Drill-indicated reserves are estimated at four million tons grading 0.05 oz. gold and 0.73 oz. silver per ton.
In addition to the leach tests, Glamis is conducting metallurgical tests on material at the oxide-sulphide boundary to determine its leachability. The known oxide deposit overlies a sulphide-rich gold-silver-zinc-lead body of undetermined size.
Once the feasibility test is complete, Wilson said, permitting and construction would likely take about six months.
Preliminary estimates put the capital cost to bring the project on-stream at US$4 million.
Wilson noted that the company has a decided advantage on the permitting and construction front. The same team that brought into production Eldorado’s 70%-owned La Colorada heap-leach project near Hermosillo, Mexico, will be working on Cieneguita.
The pre-tax operating profit to Aquiline is estimated at US$1.75 million per year over a minimum 5.7-year mine life. That estimate is based on several factors, including a gold price of US$370 per oz., a silver price of US$4.30 per oz., an operating cost of US$6 per ton, an operating rate of 2,000 tons per day, and recoveries of 75% for gold and 20% for silver.
Aquiline has about 4.3 million shares outstanding and about $350,000 in working capital.
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