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Monday November 30, 7:41 am Eastern Time
Geomaque Explorations announcement/study
(Full text of press release from Canada NewsWire)
Geomaque announces positive feasibility study, financing for Vueltas del Rio
Feasibility projects cash costs of $169/oz, pre-production capital of $14.4 million, 25% IRR
TSE Symbol: GEO
(All figures quoted in US$)
TORONTO, Nov. 30 /CNW/ - Geomaque Explorations Ltd. is pleased to announce the completion of a positive feasibility study on its Vueltas del Rio gold deposit in northwestern Honduras, and that financing for the project has been arranged with Standard New York Trading Corp. and Standard Bank London Limited (Standard Bank).
Projected pre-production direct capital costs are $14.4 million, including a $1.5 million contingency. The study is based on a $300 gold price. The project has a 2.51 g/t reserve grade, a 25% internal rate of return and life-of-mine average cash operating costs of $169 per ounce (including mining fleet lease and maintenance costs). Average gold recovery rate is 74%. The feasibility study was completed by Kappes Cassiday and Associates of Reno, NV.
Concurrent with the positive production decision, the Company has entered into an agreement for a loan facility of up to $15 million with Standard Bank, subject to legal and technical due diligence.
At an annual mining rate of 1,080,000 tonnes, Vueltas del Rio will produce an average of approximately 60,000 ounces of gold per year. The project is permitted for mining, and construction of the open pit heap leach mine is scheduled to start in January 1999. Gold production is expected to begin in December 1999.
Vueltas del Rio is a robust project, and one of the few operations which can justify a positive production decision at $300 gold,'' said John Paterson, President and CEO of Geomaque. In the current gold price environment when high-cost mines are being shut down, Geomaque is reducing its average production cost by putting a low-cost mine into production at Vueltas del Rio. With its existing operation, the San Francisco Mine, and Vueltas, Geomaque has one million ounces of reserves and anticipates total production of 130,000 ounces per year at an average overall cash cost of $213 per ounce.''
The Measured & Indicated Vueltas del Rio resource, as estimated by Mine Development Associates of Reno, NV, is 727,000 ounces of gold. An additional 87,000 ounces have been classed as inferred. Based on a $300 gold price and an internal cutoff grade of 0.35 g/t for oxidized ores and 0.50 g/t for transition/unoxidized ores, mineable reserves are 5,070,000 tonnes grading 2.51 g/t for a total of 410,000 in-situ ounces with a waste-to-ore ratio of 3.4:1. Of the reserve tonnes, approximately 64% are oxidized with a projected recovery rate of 88% after 180 days of leaching.
Mineable reserves are estimated on data from Geomaque's 360 diamond drill holes on 20-30 metre centres. Drilling was completed in September 1998, with the majority of the holes drilled to less than 100 metres in depth.
The most significant factor regarding the reserves is the grade of 2.51 g/t, which is very high for a heap leach operation and translates directly into low operating costs,'' said Phillip Walford, Vice-President, Exploration. There is good potential to extend the mine life at Vueltas del Rio by adding to reserves. The strike extensions of the ore body need further work. In addition, the current pit has a maximum average depth of only 70 metres, and little drilling has been done below 100 metres.''
The mine will be a conventional open pit heap leach operation. As at the San Francisco Mine, mining will be accomplished with a leased and maintained fleet of front-end loaders and 100 tonne haul trucks. Minimal pre-stripping will be required, and due to the heavily weathered nature of the deposit from surface to a depth of approximately 40 metres, little drilling and blasting will be necessary in the oxide and transition ores.
The mine will use two-stage crushing to produce minus 25mm ore, which will be drum agglomerated. Ore will be loaded on the permanent leach pad using a conveyor/stacker system. A standard carbon gold recovery plant is specified in the study.
Highlights of the feasibility study are included in the attached table.
Geomaque Explorations Ltd. is an international gold mining and exploration company which is producing gold from its 100%-owned San Francisco Mine in the State of Sonora, Mexico, developing the Vueltas del Rio gold deposit in Honduras, and exploring for gold in Latin America.
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Vueltas del Rio Feasibility Study Highlights
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Gold Price $300
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Production Approx. 60,000 oz/year
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Mineable Reserves
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Tonnes 5,070,000
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Grade 2.51 g/t
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Stripping Ratio 3.4:1
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Mine Life 5 years
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Mining Rate 1,080,000 tonnes per year
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Gold Recovery (180 days of leaching)
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Oxide 88%
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Transition 81%
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Unoxidized 59%
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Weighted Average 74%
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Capital Cost
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Direct Pre-Production Capital Cost $10.6 million
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EPCM and Owner's Cost $3.8 million
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Total Pre-Production Capital Cost $14.4 million
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Working Capital $1.9 million
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Operating Cost
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Per Ounce Gold (w/o Rent/Lease Costs) $140
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Per Ounce Gold (incl. Rent/Lease Costs) $169
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Payback Period 29 Months
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Internal Rate of Return(x) 25%
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(x) Based on current Honduran mining law. A proposed new mining law, which would have a positive impact on the project's IRR, is currently before Congress in Honduras.
/For further information: please visit our website at www.geomaque.com, or contact: Sean Stokes Manager, Investor Relations (416) 956-7470 e-mail: sstokes(at)geomaque.com/ |
