San Anton releases scoping study for Cerro Del Gallo

Vancouver – San Anton Resource (SNN-T) has released a scoping study for the Cerro Del Gallo gold-silver-copper deposit in Mexico that outlines a basic mine plan for the large, low-grade, open-pittable resource.

The study investigated the economics of developing an open pit mine and heap leach operation churning through 4 to 5.5 million tonnes of ore annually, or 11,000 to 14,000 tonnes per day. Initial capital costs to develop the crushing and heap leach facilities came in at US$82 million, which could be repaid in a little over two years. Heap leach gold recovery from the weathered rock is estimated at 72-75%; recovery from oxidized rock is lower, averaging 55%.

To add a carbon-in-leach (CIL) plant, which would recover gold from the primary mineralization that underlies the weathered and oxide zones, would cost another US$68 million.

Over a 14-year lifespan a mine at Cerro Del Gallo could produce US$260 million, after repaying capital costs. It should cost US$415 to produce an ounce of gold at the site.

The scoping study pegged the in-pit resource at 69.9 million measured and indicated tonnes grading 0.66 gram gold per tonne and 13.6 grams silver per tonne. The strip ratio would average 0.74 to 1 over the 14-year mine life.

For the first two years the mine would work through 4 million tonnes of ore annually, then an expansion would increase throughput to 5.5 million tonnes per annum. Over its lifespan the operation would produce just over 1 million oz. gold and 11 million oz. silver.

The overall resource for Cerro Del Gallo stands at 461 million measured and indicated tonnes grading 0.27 gram gold, 11 grams silver, and 0.11% copper, using a 0.2-gram-gold cut-off grade. The inferred resource at the same cut-off is 166 million tonnes grading 0.11 gram gold, 7 grams silver, and 0.1% copper. Combined, the resources contain 4.5 million oz. gold, 202 million oz. silver and 1.4 billion lbs. copper.

San Anton, and its parent company Kings Minerals NL (KMN-A), have been developing the property in the state of Guanajuato, central Mexico, since 2004. Goldcorp (G-T, GG-N) has a 36% share in the project, having dropped from 49% when the company declined to fund any exploration on the property in 2007/2008.

The San Anton property covers roughly 23,500 ha. and is made up of 10 contiguous concessions that cover the San Anton mineral field. The property encompasses several old mines worked for high grade, vein-hosted silver gold and is located about 23 km northeast of the historic Guanajuato mining field. The site is well-serviced by roads, power lines and a water supply. The project is roughly 270 km northwest of Mexico City.

The Cerro Del Gallo deposit comprises an elongated felsic intrusion surrounded by strongly altered host rocks. The intrusive and the wall rocks are mineralized, with gold, silver, and copper hosted in disseminations as well as veins and fractures. Gold grades are highest close to the intrusion and decrease moving away; copper grades are the opposite.

Australia-based Kings Minerals created the Toronto-based San Anton in 2006 as a way to generate capital for the Mexican project, earning $17.25 million in an initial public offering. Kings Minerals is now in the process of re-integrating San Anton into its fold, with an all-share takeover of the 28% of shares it does not currently own to be completed by May. Kings Minerals then plans to list itself on the TSX to generate funds for the further development of the San Anton project.

With the completion of the scoping study for Cerro Del Gallo, San Anton is now working towards an initial feasibility study expected to be complete in late 2010.

San Anton’s share price was up 2¢ on the news. The company’s 52-week share prince range is between 9¢ and 38¢; the company has 106 million shares outstanding.