Placer wins Pueblo Viejo bid

Vancouver — Placer Dome (PDG-T) has won the right to negotiate a deal to operate the large Pueblo Viejo gold project in the Dominican Republic.

“We believe such a property fits our stated strategy of selective, quality growth through investment in properties with the potential to become world-class assets,” says Jay Taylor, Placer’s president.

Negotiation of a letter of intent with the Dominican government is expected to begin shortly. This will be followed by a firm contract, which will be subject to congressional approval.

Placer and Australian-based MIM both submitted bids to take control of Pueblo Viejo, which is regarded as one of the largest gold deposits in the world and is owned and operated by the Dominican government.

The project hosts an estimated 6 million tonnes grading 2.22 grams gold and 5.67 grams silver per tonne, plus 0.81% copper. It is believed to host an undeveloped sulphide resource in excess of 200 million tonnes at an average grade of about 3 grams gold per tonne.

Rosario Resources began open-pit mining of the oxidized portion of the deposit in 1975, processing the ore in a cyanidation mill.

The government nationalized the mine in 1979 and full-scale mining continued up until 1993. By that time, virtually all the oxide and transitional ore reserves had been depleted. It is estimated that, from 1975 to 1993, more than 50 million tonnes were mined, averaging 4 grams gold and 20 grams silver per tonne.

Due to the refractory nature of the sulphide ore, the project is expected to offer technical challenges.

“We have the technical skills, the financial resources and the commitment to social and environmental issues to make a challenging project like Pueblo Viejo a success,” says Taylor.

Pueblo Viejo occurs in the upper part of the Los Ranchos formation, a laminated carbonaceous siltstone and sandstone. Local conglomerate layers grade downward into a diatreme breccia. The gold-silver mineralization forms in funnel-shaped, graphite-rich siliceous zones containing sulphides that consist predominately of pyrite along with localized sphalerite and enargite.

Originally thought to mark a maar-diatreme complex, the system is now considered a near-vent volcanic breccia.

In an attempt to kick-start gold production in the Dominican Republic, the government put out to tender the 25-year concession to operate the mine. Seven major mining companies reportedly took a look at the project. Only two submitted bids.

A firm agreement is expected by the end of the month.