Construction of Infinito Gold’s Crucitas project expected in 18 months

Costa Rica lifted its 2002 moratorium on open-pit gold mining in March and foreign miners in the country are heaving a collective sigh of relief.

The moratorium did not apply to Infinito Gold‘s (IG-V) grandfathered, 1,200-hectare Crucitas project in north-central Costa Rica, but the lifting of the ban is good news nevertheless as the Canadian junior holds a large, 18,000-hectare block of exploration concessions surrounding Crucitas on three sides.

The presidential decree banning open-pit mining was reportedly designed to protect Costa Rica’s environmentthe mainstay of its tourism industryand halted all new exploration and mining projects awaiting government approval. The law applied only to new projects, however, and previously acquired legal rights, such as the Crucitas project, were respected.

Construction at Crucitas is expected to be completed in about 18 months and the payback period will be less than two years, according to a final feasibility study released on July 17.

The study updates the first feasbility report completed in February 2007 and incorporates a revised geological model, mining plan and updated capital and operating costs for the project.

At a cutoff grade of 0.5 gram gold per tonne, Infinito’s 100%-owned Crucitas deposit contains an indicated resource of 1.24 million oz. gold and an inferred resource of 1.21 million oz. gold.

The feasibility report outlined mineable reserves of 1.01 million oz. gold at average cash costs of US$342.50 per oz. gold net of silver credits.

Initial capital costs are estimated to be in the range of US$66.2 million. An additional US$13.7 million in sustaining capital over the life of the mine for tailings dam raising and infrastructure item replacement is also expected.

At a gold price of US$750 per oz. and a silver price of US$13.50 per oz., the study indicated that the project’s internal rate of return should be about 35.1%.

The Canadian junior, which changed its name from Vanessa Ventures several months ago, received environmental approval for the project in February. The approval allows Infinito to mine the entire ore body, including the weathered saprolite material overlying the deposit and the underlying hard rock material.

Crucitas lies in Costa Rica’s Alajuela province, about 105 km north of the capital of San Jos De and 16 km north of the small town of Coopevega.

Total indicated resources above the 0.5 gram gold per tonne cut-off grade are estimated to be 28.22 million tonnes at an average grade of 1.37 grams gold per tonne.

Inferred resources at the same cut-off grade are estimated to be 29.42 million tonnes at an average grade of 1.28 grams gold per tonne. This includes both saprolite and hard rock zones in the Botija and Fortuna pit areas.

In terms of silver, Crucitas holds an estimated 28.22 million tonnes in the indicated category at an average grade of 3.6 grams silver per tonne (at the same cut-off grade used for gold) for a total of 3.27 million oz. silver. In the inferred category, the deposit has an estimated 29.42 million tonnes at an average grade of 3.9 grams silver per tonne for a total of 3.69 million oz. silver.

Infinitio purchased the mills required to grind the rock before gold recovery in 2006. They consist of a 1,750 HP SAG mill and a 3,000 HP ball mill. The mills operated at the former McLaughlin mine in California and are now being shipped to site.

Expected average recoveries over the course of the mine’s life are 92.8% for gold and 58% for silver.

The tailing facility will create a storage area of approximately 165 hectares with capacity to contain 23 million tonnes of tailings and roughly 8.7 million tonnes of waste rock.

Gold cathode production, including the contained silver, will be smelted on a periodic basis and transported to San Jos De.

Currently Infinito is trading at about 68 a share. Over the last year, it has traded in a range of 39.5-79 a share. The junior has 120.9 million shares outstanding.

Apart from its holdings in Costa Rica, the Calgary-based company has properties in Guyana and Brazil.