In addition to its Oronorte mine, now producing in Colombia, Greenstone Resources (TSE) expects to have another two Latin American gold mines up and running by year-end.
Indeed, the first gold has already been poured at the company’s 75%-owned La Libertad gold mine in Nicaragua. Libertad is within a 120-sq.-km concession and is mined by open-pit methods at 150 tonnes per day. Greenstone expects to produce 5,000 oz. gold this year and is taking steps to increase annual production to 7,500 oz.
Greenstone plans to spend US$500,000 exploring two dozen epithermal gold targets. The program will include 1,300 metres of trenching at the Mojon, Azul and Tres Amigos development zones, as well as the newly identified Gran Britannia, Esmeralda-Victoria and Mojon S.W. exploration zones. This will be followed by 4,500 metres of reverse-circulation drilling to develop detailed reserve calculations for a feasibility study.
Meanwhile, at Greenstone’s wholly owned Santa Rosa gold mine in Panama, mining operations at the Alto de la Mina open pit have started. Over the next few weeks, construction and commissioning of the 3-stage crusher facility will be completed and the leach solution processing plant will be assembled.
Santa Rosa will have its first gold pour in December. At full production in 1996, it is expected to produce 60,000 oz. annually.
Most of the $8.9 million being raised by Greenstone will be used as working capital for its Santa Rosa gold mine in western Panama.
The company arranged a European private placement for $6.2 million and a secured working capital facility for US$2 million.
The placement consists of just over 2.5 million common share units priced at $2.40 each. A unit will be composed of one common share and a half common share purchase warrant. Each full warrant will entitle the holder to buy a Greenstone common share for $2.85 until March 25, 1996. Should all warrants in this placement be exercised, an additional $3.7 million will be raised and 1.3 million additional shares will be issued. The placement is expected to close shortly.
The working capital facility, secured through an international metals merchant group, will have an initial term of six months. After this period, it will likely be converted into a hedging and gold-in-process financing line of credit. The merchant group will also buy all the gold produced at the Santa Rosa for a 2-year period, as well as help develop and implement a gold price-hedging program.
A portion of the proceeds will be used to reduce the US$4-million balance of a note payable to Freeport-McMoRan (NYSE).
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