Trend Mining to buy Andacollo gold mine

Trend Mining (TRDM-O) has signed a letter of intent to buy the Andacollo gold mine in northern Chile from Pacific Rim Mining (PMU-T).

Trend intends to buy the corporate subsidiaries, which own the mine for a total purchase price of US$5.4 million.

The open pit, heap-leach mine, 800 km northwest of Santiago, began production in 1996 and has been kept on a care and maintenance basis since 2000.

The purchase price is due in installments over a 2-year period. The company has paid US$300,000 to Pacific and an additional US$2.7 million is due on closing. Closing is expected within one month’s time.

Trend has plans to mine 12 million tonnes of ore with an average grade of 0.88 gram gold per tonne over a six-year period beginning in the fourth quarter of this year. Cash operating costs, including reclamation and closure costs, are estimated at US$315 per oz. gold.

The company expects to spend US$4.6 million on the project before it achieves full production. Just over one-third of that will be spent on the construction of new heap leach pads.

Shares in Trend Mining rose 14% on the news.