The Las Cristinas project in southeastern Venezuela is more economically viable than previously believed, according to a revised feasibility study by
Total cash costs are now estimated to be US$190 per oz. over the life of the mine. During the first five years, costs are pegged at US$130 per oz., compared with the previous estimate of US$144.
The new study calls for owner-operated mining, whereas the 2003 study recommended contract mining. There are also plans to expand the operation to 40,000 tonnes per day from the initial 20,000 tonnes.
The capital cost estimate has increased 9.5% to US$266 million; however, the pretax and unleveraged internal rate of return has increased to 15.7% at a gold price of US$325 per oz.
Most of the saprolite ore will be mined in the first 10 years, when average mining costs are estimated to be US$1.82 per tonne milled (down from US$2.76 per tonne). The cost reduction over the 10 years totals US$70 million, whereas the upfront mining capital cost is US$5.4 million higher, owing to in-house mining.
Total life-of-mine operating costs are estimated at US$6.46 per tonne, and mine operating costs have been reduced to US$2.70 per tonne.
Design changes required for the additional 20,000-tonne-per day future expansion will likely add US$5.9 million to the initial cost. There has also been a US$2-million increase in the estimated cost of insurance premiums during construction.
Last year, proven and probable reserves were estimated at 246 million tonnes grading 1.29 grams gold per tonne, or 10.2 million oz., using a gold price of US$325 per oz.
The reserves have been calculated within a 3-by-1-km pit with a vertical depth of 350 metres.
Infill drilling
In mid-June, Crystallex completed an 18-hole drill program totalling 7,120 metres. The holes were designed to increase the confidence level of the resource from inferred to indicated. Results from five holes (36% of the total program) have been released, and the highlight was an intersection grading 4.59 grams gold per tonne over 27.3 metres. The intercept is included in a larger intersection grading 1.92 grams gold over 128.7 metres (all widths are estimated true width).
Another hole intersected 3.5 grams gold over 22 metres, within a larger intersection of 2.22 grams gold over 104 metres (or 1.57 grams gold over 174.6 metres). Two other holes contained grades of 1.09-1.5 grams over 109.5-120.7 metres. One hole intersected two intercepts, one of which graded 1.56 grams over 61 metres and the other, a 39.5-metre intercept grading 0.86 gram gold per tonne.
Based on results to date, the company believes the reserves will increase.
Crystallex is awaiting an arbitrated decision under the Canada Venezuela Bilateral Investment Treaty regarding its rights to mine the Las Cristinas properties.
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