Toronto-based Sikaman Gold Resources (TSE) is stepping up its exploration and development activities on two placer gold properties in the Province of Neuquen, Argentina.
In early May, the company secured a $2 million credit facility from the Royal Bank of Canada to finance production at the Cerro Mayal placer mine. In 1992 and early 1993, Sikaman and its partners completed a feasibility study which estimated gold reserves for the deposit at 1.28 million oz. of which 380,000 oz. are in the proven and probable category.
Gold production at the Cerro Mayal mine is expected to commence in the fall of this year with an initial output of 28,800 oz. gold rising to 57,000 oz. gold in 1994. Cash operating costs, including all royalties, are estimated at US$133 per oz.
Under the terms of the loan agreement, $1.7 million will be applied to the project with the balance applied towards interest and costs. The loan is to be repaid within 18 months and will bear interest at a rate of prime plus 1%. Sikaman is also planning to develop the Neuquen River placer gold property. Based on previous work, the company has calculated that the property may contain up to 12 million oz. of recoverable gold. Annual production is estimated to be between 30,000 and 60,000 oz. gold.
Sikaman and its joint venture partners are planning to carry out a detailed exploration program on the property within the next two months.
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