Troy Resources turns out first gold and silver dore at Casposo

Troy Resources(TRY-T, TRY-A) has built a plant and poured its first gold in sixteen months at its Casposo mine in Argentina’s San Juan province.

Construction began in August 2009 and the first pour of gold and silver dore had been anticipated in September, but delays in the delivery of new equipment and some quality-control issues pushed back the start-up date. Troy expects to ramp up to full production in the March quarter.

The company is still commissioning the concentrate and tailings vacuum filters and refinery but expects to complete this over the next few weeks. The installation of plant automated process controls will be finished in early December.

“The front half of the plant; crushing, grinding and leaching have already proven they can operate at above planned rates,” Paul Benson, Troy’s president and chief executive, outlined in a press release. “This, combined with a growing stockpile of more than 70,000 tonnes at an average grade above 9 grams gold-equivalent per tonne, means that once the entire plant is fully commissioned and operational, we expect to ramp up to full production very quickly.”

Casposo is a typical low-sulphidation, epithermal style gold-silver deposit where mineralisation is hosted within rhyolite-andesite flows and breccias. The property is about 150 km from the city of San Juan and the nearest town, Calingasta, is a community of about 2,000 people, 20 km to the southeast.

According to an updated mine plan released in May, the low-cost, high-grade Casposo gold and silver mine will see 320,800 oz. gold and 9 million oz. silver produced over a six-year mine life.

On the exploration front, the company has started drilling at Casposo Norte and Castano Neuvo and has completed high definition geophysics to identify drill targets.

Troy has budgeted A$7 million (US$6.9 million) for exploration at Casposo and Castano in fiscal 2011.

Ongoing surface mapping and sampling has identified good mineralisation in the Lucia Vein with a peak result of 3.3 metres grading 11.67 grams gold-equivalent per tonne, the company says.

The Lucia sampling results are some of the best both in terms of width and grade for an outcropping vein on the property outside the Kamila vein, which is the site of the initial open cut.

Diamond core drilling at Castano Nuevo and reverse circulation drilling at Casposo Norte is underway and a second rig will start work at Casposo in early December.

At Casposo Norte, drilling began during the first week of November. Ten holes were planned to test the east-west striking, 400 metre-wide outcropping vein target, at shallow depths of 25 metres-50 metres.

Drilling at Castano Nuevo began in October, with three holes completed at the Dios Protege Vein (CASS-10-01 -03) and four holes at the San Agustin Central Vein (CASS-10-04 to CASS-10-07).

Ground magnetics and induced polarization were completed in late October. Mapping and rock chip channel sampling of the northern targets at Casposo is well advanced with several veins mapped in detail and systematically channel sampled. Vein targets will be ranked once the sampling program is completed to define drilling priorities.

At Ladera South, 500 metres south of Oveja Negra and northwest of the Cerro Norte target, exploration focused on the north-south striking Lucia Vein exposed over 750 metres of strike length.

The Lucia Vein strikes north-south, dips between 60 degrees to 70 degrees to the west, and consists of two parts, north and south, separated by a northwest-southeast trending structure.

Thirty-two rock chip channel samples spaced about 50 metres apart were collected at the Lucia Vein.

Historic rock chip grab sampling by the previous explorer yielded assays of 3.68 grams gold per tonne and 21 grams silver for the southern portion of the vein and 1.46 grams gold per tonne and 36 grams silver in the northern portion of the vein.

Highlights from Troy’s recent rock chip channel sampling included 3.3 metres at 11.67 grams gold-equivalent per tonne; 1.2 metres at 6.52 grams gold-equivalent per tonne; 1.6 metres at 6.10 grams gold-equivalent; 1.8 metres at 4.4 grams gold-equivalent; 3.65 metres at 2.77 grams gold-equivalent, and 1.5 metres of 2.65 grams gold-equivalent.