To bad Standard could not do a deal with them In Honduras.
They are very close to Zopilote,
geomaque.com
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This is what Standard is facing in Honduras, sounds like new tax law really helped.
During 1998 Geomaque laid the groundwork for the
Company's second mine at Vueltas del Rio in Honduras,
which is projected to increase consolidated annual gold
production by 86% and lower the Company's average cash
costs to $213 per ounce. Construction of the open-pit, heap
leach mine began in December; production is scheduled for
December 1999.
Vueltas del Rio is located near the town of Sula,
approximately 90 kilometres south-west of San Pedro Sula,
Honduras' major industrial city. The paved Pan American
highway bisects the Vueltas del Rio property, and access to
the site is excellent.
Topography is characterized by rolling hills which won't
present any serious obstacles to construction or mining.
While the region has definite wet and dry seasons, average
annual precipitation in the site area is 1.39 metres and
average annual evaporation is 1.48 metres, resulting in a net
evaporative climate. Process water is plentiful on site.
The 10,000 hectare Vueltas del Rio property was obtained
in January 1997 through 54,861 the acquisition of Milagro
Minerals Inc., and all necessary permitting and land
acquisition has since been completed.
Work by previous operators indicated a heap leachable gold
resource of approximately 250,000 ounces at the Vueltas
del Rio deposit. Geomaque began drilling in February 1997
with an emphasis on reserve definition. By mid-1998, a total
of 360 large-diametre diamond drill holes, or approximately
30,000 metres of drilling, had been completed, and the total
resource stood at 727,000 ounces.
LOW PRODUCTION COST
The success of Geomaque's drill program led to a feasibility
study by Kappes Cassiday and Associates, and a positive
production decision was made in November. Based on a
$300 gold price, the feasibility study estimates mineable
reserves at 410,000 ounces and an average grade of 2.51
g/t, and projects cash costs will average $169 per ounce
over a five-year mine life.
The impact of the high 2.51 g/t grade on the project's
economics cannot be under-estimated. While 70% fewer
tonnes of ore will be processed annually at Vueltas del Rio
than at the San Francisco Mine, gold production is expected
to average 60,000 ounces per year, or 86% of the 70,000
ounces at San Francisco.
The project's attractiveness was enhanced when a new
Honduran mining law was passed by Congress in
December 1998. The replacement of a 3% federal net
smelter royalty (NSR) with a 1% municipal NSR, and
elimination of a 12% sales tax and import duties on mining
equipment, materials and supplies have the net effect of
raising the internal rate of return projected by the feasibility
study to 30%.
Gold mineralization is hosted in a sericite schist which has
been subjected to tropical weathering, oxidizing the host
rock to a depth of approximately 40 metres from surface
(oxide zone). Beneath this lies mixed oxide/sulphide
mineralization (transition zone) and more competent schist
(sulphide zone).
Metallurgical testing indicates rapid leach times in all ore
types. Weighted average gold recovery after 180 days is
projected at 74% based on recoveries of 88% from oxide
ore, 81% in the transition zone and 59% from sulphide ore.
Pre-production direct capital costs are estimated to be
$14.4 million, including a $1.5 million contingency. A leased
fleet of front-end loaders and 50-tonne trucks will haul ore
to a two-stage crusher. Ore will then be cement
agglomerated, transported by conveyors and stacked on the
permanent leach pad.
Geomaque has been extremely successful at bringing
resource ounces into reserves at the San Francisco Mine,
and will benefit from this experience at Vueltas del Rio.
Significant potential for further resource and reserve
increases exists adjacent to known mineralization, along
strike, and also at depth as the deposit has not been
systematically explored below 100 metres.
Vueltas del Rio Feasibility Study Highlights
(at $300/oz gold price)
Ownership
Geomaque 100%
Mining/processing
Conventional open
pit/heap leach
Mineable gold reserves (Dec. 31, 1998)
410,000
Reserve grade
2.51 g/t
Stripping ratio
3.4:1
Total gold resource
727,000
Mining rate
3,000 tonnes per day
Gold production rate
Approx. 60,000 oz./year
Current mine life
5 years
Average gold recovery (180 days of
leaching)
74%
Pre-production capital cost
$14.4 million
Operating cost
Without rent/lease
costs
$140
Including rent/lease
costs
$169
Payback period
29 months
Internal rate of return (excluding spent
costs)*
30%
*Under new mining law passed by Congress in Honduras in
December 1998.
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