Geologix Explorations Looks Set To Add Significantly To The Mine Life At The Tepal Copper-Gold Project In Mexico
By Chris Cann
minesite.com
More than 10,000 meters of expansion drilling completed during the second half of last year will change the face of at Geologix Explorations’ Tepal copper-gold porphyry project in Mexico. Already the subject of a successful preliminary economic assessment (PEA), Tepal looks likely to grow in size significantly when the full picture, as determined by the drill rigs, becomes clear over the next few months.
It was back in October when SRK Consulting delivered the results from the PEA. This outlined an 8.3 year operation producing close to one million ounces of gold and 350,000 pounds of copper for an upfront price tag just shy of US$300 million. Tepal is predominantly copper-gold sulphide deposit, but also has traces of silver, and a distinct layer of oxide material overlying. The sulphide ore responded well to conventional milling to produce a high quality copper-gold concentrate, while the oxide material has been earmarked for cyanide treatment either in coarse ore heaps or crushed ore heaps to produce gold and some cyanide soluble copper. The only disappointment was uninspiring recovery figures, at 87.4 per cent for copper, and 60.7 per cent for gold. The PEA proposed an open pit development for Tepal, mining higher grade material early on in the mining schedule.
Following the PEA, SRK’s chief recommendations were for infill drilling in preparation for further studies and for the initiation of permitting work in preparation for development. However, Geologix has decided not to go down that road just yet. Instead, it will wait on the results of the expansion drilling that has taken place over the past five months or so. Geologix is anticipating further results to filter in between now and the end of the quarter, and these, according to vice president corporate communications Jeff Wilson, could double the current resource figure.
A big part of these additional resources will be the tonnes identified at the Tizate zone, 1.4 kilometres to the east of the main resource at Tepal. The area under scrutiny at Tizate currently covers 400 meters by 700 meters. The new zone remains open to the northeast, southwest, and to depth, with grades appearing to increase to the northeast and at depth.
Further results are flowing in and once a full set of data is available the resource will be revised and the PEA updated. A significantly larger resource, even if it doesn’t quite double, wouldn’t result in an increase in design capacity, but would instead translate into an extended mine life.
“The first PEA we had prepared already factored in some growth potential”, Wilson told Minesite. “What we’re looking to do is not necessarily to increase the scale of the operation but to push out the mine life. The current PEA calls for a nine year mine life, but we’d like to make that a 15 year, maybe 18 year, mine life so we’re not having to increase our capex. If through our exploration this thing starts looking like something that requires a 50,000 tonne per day operation – that’s a good problem to have.” He said there was also the opportunity to refine the metallurgy, and added that the company may add silver credits in to future economic studies.
Geologix has about C$5 million in the bank, which will see it travel safely through the third quarter. However, revising the PEA and launching a prefeasibility study will require another raising at some stage later this year. Longer term, according to Wilson, the quality of the concentrate to be produced at Tepal is likely to ensure plenty of external interest in the project. Development finance is likely to come from an industry partner in the form of an offtake agreement. “Because this produces such a clean, attractive and saleable concentrate, there’s a strong feeling we can do some sort of offtake agreement to finance this thing”, Wilson said. “That’s if someone comes sailing in and wants to do a deal. If, however, we come through prefeasibility in 12 to 16 months and that hasn’t occurred then we’ll be perfectly placed to proceed with bankable feasibility work.” |
