New mine plan cuts Gold Reserve’s costs at Las Brisas

By modifying its mine plan, Spokane Wash.-based Gold Reserve (GLR-T) has reduced estimated cash operating costs by as much as 24% at the proposed Las Brisas copper-gold producer in southeastern Venezuela.

The modifications are part of a study that is intended as a supplement and follow-up to the prefeasibility study, which concluded the deposit was uneconomic.

The supplementary study is based on a gold price of US$335 per oz., compared with US$375 in the prefeasibility study of last March, and a copper price of 90 cents per lb., compared with US$1.

An increase in the cutoff grade to 0.5 from 0.4 gram gold per tonne has had the effect of reducing the deposit to 5 million oz. gold contained within 200 million tonnes grading 0.77 gram gold and 0.14% copper.

Although daily throughput of 55,000 tonnes remains unchanged from the prefeasibility study, annual gold production would actually increase to 363,000 from 335,000 oz.

The stripping ratio climbs to nearly 2-to-1 from 1.7-to-1, whereas the proposed mine life drops to nearly 12 years from just over 14 years.

All these changes have combined to reduce cash operating costs to US$206 from US$222 per oz., representing a modest change of 7%.

Gold Reserve took the next step and included an on-site copper processing circuit, reducing costs further to US$169 per oz. The company proposes to treat concentrates from Las Brisas with a hyrdrometallurgical process developed by Cominco Engineering Services.

Gold Reserve’s president, Rockne Timm, says the revised cash operating costs would place Las Brisas among the lowest-cost gold mines in the world.

Capital costs, however, are expected to increase. The on-site copper production circuit would add US$45 million to the capital cost, and the new mining plan would add US$6 million.

Projections for initial capital costs have increased to US$344 million from US$293 million in the prefeasibility. Also, an additional US$20 million will be required for working capital.

Meanwhile, Gold Reserve continues to carry out metallurgical testing and ore reserve modelling. A final feasibility study is to be completed in 1999.