The Don Mario gold project in eastern Bolivia will be one of the lowest-cost producers in South America, according to the final feasibility study.
Cash operating costs for the mine, which would employ both open-pit and underground methods, are pegged at close to US$100 per oz.
“It was a long time coming, but we now have a bankable document, which is essential to moving forward,” says Orvana Chairman Neil Hillhouse.
Mining could begin as soon as a year after a production decision is made, he said, as the company already has secured all construction permits.
Capital expenditures for developing the mine are estimated at US$40.5 million. Orvana will spend another US$8.1 million on preproduction work. Based on a gold price of US$300 per oz., the internal rate-of-return is estimated to range between 24% and 30%.
The mining plan is focused on proven and probable reserves of 465,800 oz. gold in the lower mineralized zone (LMZ). From underground, Orvana expects to mine 667,000 tonnes grading 17.63 grams gold per tonne, equivalent to 377,800 oz. A small portion of the LMZ will be mined from a mini-pit, where reserves are pegged at 329,700 tonnes grading 8.3 grams per tonne, equivalent to 88,000 contained ounces. The stripping ratio at the mini-pit is 6.7-to-1.
Orvana has already tunneled a decline into the hill and drifted along the LMZ. Mineralization is known to occur in easily identifiable zones. In all, the reserves represent 86% of the measured and indicated resource.
Mining would begin in the mini-pit, while Orvana develops the underground portion for production. At 750 tonnes per day, Don Mario is expected to produce up to 130,000 oz. gold during the first few years of operation.
The feasibility study does not cover mineralization found in the upper mineralized zone, which has a resource of about 6 million tonnes grading 1.5 grams gold (290,000 oz.) and 1.5% copper.
Be the first to comment on "PRECIOUS METALS — Don Mario gets thumbs-up"