MK Gold advances Las Cruces

Now that mining has ended at the Castle Mountain operation in California, MK Gold (MKAU-O) is focusing all its efforts on permitting and financing the Las Cruces copper project in Spain’s Iberian Pyrite belt.

Closure and reclamation activities are under way at Castle Mountain, a joint venture owned 25% by MK and 75% by Viceroy Resource (VOY-T). The open-pit gold mine began operations in 1992 after undergoing rigorous environmental permitting.

MK Gold says Las Cruces was designed to a high standard of environmental care with the help of Bechtel, which produced the bankable feasibility study, and FRASA Ingenieros Consultores, which produced the environmental impact study.

Las Cruces will be an open-pit mine exploiting reserves of 15.8 million tonnes grading 5.94% copper. An average of 1.2 million tonnes will be mined and processed each year, for at least 13.5 years, producing more than 834,000 tonnes of cathode copper.

The environmentally safe hydrometallurgical facility is based on a ferric leaching process developed by Dynatec. Ore will be crushed and ground using conventional technology, followed by leaching and solvent extraction-electrowinning (SX-EW) to produce cathode copper of London Metal Exchange-grade quality.

The plant can produce up to 72,000 tonnes of cathode coppper per year, though annual production is expected to average 63,000 tonnes over the mine life. Capital costs are estimated at US$289 million; cash operating costs, at US33 per lb.

Plant tailings will be filtered, producing a nearly dry material that will be progressively encapsulated in marl (clay and calcium carbonate). This system eliminates the need for a conventional tailings dam with the associated risk of failure. After mining ends, the open pit will be partially backfilled with marl, and then filled with run-off water to create a permanent lake. The remaining overburden will be carefully contoured and re-vegetated throughout operations and after the mine closes.

On the financial front, MK Gold reported a net loss of US$338,000 on revenue of US$3 million for the second quarter ended June 30, compared with net income of US$614,000 on revenue of US$4.7 million a year earlier. The company’s attributable share of gold production was 5,260 oz. for the quarter, compared with 7,659 oz. in the second quarter of last year. Current gold production is from residual leaching, as reserves are exhausted at Castle Mountain.