Partners pour gold at Magistral in Mexico

Equal partners Queenstake Resources (QRL-T) and privately held Midwest Mining have shipped their first gold bar from the Magistral project in Mexico’s Sinaloa state.

Weighing 254 oz., the bar was sold at US$316.10 per oz.

Production at Magistral is expected to increase gradually over the next few months so as to meet the annual target of 40,000 oz. gold. The mine’s production is not hedged.

Over its 8-year lifespan, the operation is expected to average a gold recovery rate (over a 240-day leach cycle) of 73%. The gold will be recovered in the adsorption and stripping circuits. Operating cost are expected to come in below the US$180 per oz. outlined in the feasibility study, thanks to the recent discovery of some additional reserves.

Highlights of a 8,500-metre drill program include the following:

n hole 744 — 34.5 metres grading 6.47 grams gold, including 21 metres of 9.45 grams gold.

n hole 736 — 33 metres of 6.61 grams gold, including 21 metres of 9.99 grams gold.

n hole 748 — 40.5 metres grading 5.01 grams gold, including a 25.5-metre section of 7.02 grams gold.

At last count, Magistral’s proven and probable reserves were pegged at just less than 7 million tonnes grading 2.07 grams gold per tonne, equivalent to 465,100 contained ounces of gold.

The company plans to carry out more exploration, funded by Magistrals’s cash flow, in an attempt to increase reserves further. The company also plans to shop around for more producing gold assets.