Vancouver — A recent $60- million bought-deal financing combined with cash and cash equivalents of $23.1 million should allow Viceroy Exploration (VYE-T, VCRYF-O) to advance its Gualcamayo gold project to feasibility this year.
Gualcamayo is situated in San Juan province, Argentina. The company spent $10 million there last year to explore and develop three main zones of mineralization. A preliminary economic assessment was also completed for the largest and most advanced of these, Quebrada Del Diablo.
At last report, Gualcamayo hosts measured and indicated resources containing 1.43 million oz. gold, plus another 611,000 oz. classified as inferred. This estimate was announced in late 2004, and does not include results from subsequent exploration programs.
An updated resource estimate is expected shortly; the update will include the results of more recent drilling, including a 127-hole, 27,000-metre drill program completed earlier this year. A previous preliminary economic assessment will also be updated in advance of the feasibility study scheduled to begin this year.
The independent preliminary assessment completed in early 2005 focused on the Quebrada Del Diablo zone, and examined the feasibility of an open-pit, heap-leach mine at Gualcamayo. The study concluded that the project had potential to produce 96,100 oz. gold annually over a 10-year mine life, based on an 80% recovery rate. The average cash costs were estimated at US$133 per oz., while the project’s after-tax internal rate of return was 32.3%, based on a US$400-per-oz. gold price.
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