Eldorado tables study of Efemcukuru — US$45 million to build 800-tpd underground mine and mill

By tabling a prefeasibility study, Eldorado Gold (ELD-T) has moved one step closer to developing its wholly owned Efemcukuru gold project in western Turkey.

The study indicates that the internal rate-of-return will be 32% before taxes and 19.1% after taxes, with an after-tax net present value (NPV) of US$35.84 million, using a 0% discount rate. Capital costs are pegged at US$45 million.

“This study clearly demonstrates the economic potential of the Efemcukuru deposit,” says President Hugh Morris. “The company can now turn its full attention to the tasks of permitting, financing and detailed engineering.”

Mining is to be carried out by cut-and-fill and longhole methods at the daily rate of 800 tonnes, or 250,000 tonnes per year.

Ore will be processed through a flotation and gravity circuit, with gravity concentrates processed on-site and flotation concentrates shipped off for final recovery. In doing so, Eldorado will avoid having to use cyanide, currently a sensitive practice in parts of Turkey.

The mine life has been estimated at 10 years with average yearly production of 87,000 oz. Average cash costs are been pegged at US$176 per oz.; total operating costs, at US$61.76 per tonne. This includes mining costs, estimated at US$24.55 per tonne, and milling costs, estimated at US$13.33 per tonne. Overall gold recovery is estimated at 86-88%.

The resource was calculated by Micon International, mining studies were performed by H.A. Simons, and the process plan layout, as well as costing analysis, was conducted by Kilborn Engineering Pacific. Tailings studies were performed by Klohn Crippen Consultants.

The prefeasibility study was based on a three-dimensional geological model, and the total measured, indicated and inferred resource now stands at about 2.5 million tonnes averaging 13.71 grams gold per tonne. This tallies to a contained resource of 1.11 million oz. gold.

Proven and probable reserves stand at 1.8 million tonnes grading 13.14 grams gold, or 748,000 contained ounces. In performing the calculation, Eldorado used a cutoff grade of 6 grams gold per tonne and a gold price of US$300 per oz. The company also included a 10% dilution rate at 2 grams per tonne and a minimum mining width of 1.5 metres.

Three oreshoots — the South, Middle-North and North — have been defined over a strike length of 1.1 km and a vertical extent of 300 metres.

At the South shoot, the measured and indicated portion of the estimate weighs in at 859,000 tonnes averaging 12.69 grams gold, or 350,414 contained ounces. The inferred portion stands at 448,000 tonnes grading 11.25 grams gold, or 161,998 contained ounces.

At the Middle-North shoot, the measured and indicated resource totals 934,000 tonnes averaging 16.09 grams gold, or 483,231 contained ounces. The inferred portion was calculated to be 142,000 tonnes averaging 15.92 grams gold, or 72,703 contained ounces.

The North shoot contains a measured and indicated resource of 81,000 tonnes averaging 9.75 grams gold, or 25,381 contained ounces. The inferred resource has been set at 61,000 tonnes averaging 9.75 grams gold, or 19,124 contained ounces.

Gold mineralization is epithermal and associated with pyrite and base metal sulphides in quartz and rhodonite. The vein system reaches widths of up to 20 metres but averages about 4 metres and remains open at depth.

The project is in the permitting process. Once the go-ahead has been given, the company will begin a US$2.5-million bankable feasibility study, which will include infill drilling, further metallurgical testing, and engineering and environmental studies.

Meanwhile, Eldorado Gold has tabled updated total reserve and resource calculations for its mining operations and development projects. The reserves were calculated using a gold price of US$325 per oz. at the Sao Bento mine in Brazil and US$300 per oz. for all other operations. Eldorado considers Sao Bento a long-life asset and therefore used a higher gold price to calculate its reserves.

When compared with resource data from 1997, the company noted an 18% increase in its proven and probable reserves and a 13% decrease in its resources. All 1997 resource estimates were based on a gold price of US$350 per oz.

Proven and probable reserves at Sao Bento are pegged at 2.52 million tonnes averaging 9.18 grams gold per tonne, or 743,800 contained ounces. Measured, indicated and inferred resources are set at 4.49 million tonnes grading 10.85 grams gold (1.56 million contained oz.).

In 1997, the mine had proven and probable reserves of 3.3 million tonnes averaging 9.02 grams gold, or 957,400 contained ounces. Measured, indicated and inferred resources were 5.24 million tonnes averaging 10.93 grams gold, or 1.84 million contained ounces.

This year, Eldorado plans to carry out 12,000 metres of exploration and development drilling at Sao Bento.

Proven and probable reserves at the La Colorada mine, in Mexico, are pegged at 6.89 million tonnes averaging 1.03 grams gold, or 228,100 contained ounces. The measured, indicated and inferred resources are 27.7 million tonnes averaging 0.96 gram gold, that is, 854,100 contained ounces.

The 1997 proven and probable reserve estimates were 7.75 million tonnes averaging 1.27 grams gold, or 315,700 contained ounces. Measured, indicated and inferred resources totalled 32.9 million tonnes of 0.97 gram gold, or 1 million contained oz.

The reduction in reserves was mainly caused by the mining of 59,744 oz. gold in 1998. Exploration and development drilling on the Gran Central and La Colorada structures significantly increased confidence in the reserve.

The Kaymaz project in western Turkey has a measured, indicated and inferred resource of 1.1 million tonnes averaging 6.25 grams gold, or 218,200 contained oz., whereas the Kucukdere project has a resource of 1.4 million tonnes averaging 6.43 grams gold, or 292,400 contained ounces.