With thousands of new assays in hand,
Resources now stand at 78.14 million tonnes averaging 58 grams silver and 0.99 gram gold per tonne. The revision is one of many that have followed the original of 1997, though this latest estimate directly reflects a re-assaying program rather than new drilling.
Last summer, Minefinders began resampling all drill core after column-leach tests of material from the Main zone drained 30% more silver than aqua-regia digestion analyses had predicted. (Aqua-regia is not suited to silver halides, which are now thought to occur in abundance throughout the Delores district.)
A total of 8,800 samples from the Norte, North Dome, East Dike and Southwest zones were re-assayed, generating in some cases a fourfold increase in silver grades. Consequently, 6.5 million tonnes of waste has been reclassified as a resource, as have 300 metres of the Southwest zone, which adjoins the Main zone.
The new estimate is based on a cutoff grade of 0.5 gram gold-equivalent, which assumes 75 grams silver is equivalent to 1 gram gold. The previous resource estimate at that cutoff grade assumed a ratio of 60-to-1, giving 67 million tonnes at a grade of 1.02 grams gold and 54.6 grams silver.
“Originally, the model for the cutoff grades was based on heap-leach recoveries,” says Tench Page, vice-president of exploration. “That means that the [ratio] accounts for the metallurgical recoveries of both gold and silver. Since we get more gold recovery than silver, we asked for a higher percentage of silver to be equal to one ounce of gold.”
The increased resource is expected to bode well for the project’s economics. In late 2000, a scoping study that assumed a gold price of US$300 per oz. and a silver price of US$5 per oz. concluded that the Main zone alone could support a 13-year open-pit operation.
Annual production was pegged at 138,359 oz. gold and 6.3 million oz. silver, or 242,900 oz. gold-equivalent.
Cash costs rang in at US$149 and total costs, at US$184 per oz. gold-equivalent.
Capital costs were anticipated at US$77 million, which would generate a 32.7% internal rate of return at a gold price of US$325 per oz. and a silver price of US$5.50 per oz. At metal prices of US$275 and US$4.75 per oz., the return is 22%.
Metallurgical tests suggest that higher-grade mineralization be ground in a conventional circuit and then agglomerated with lower-grade material. Overall recovery rates rang in at 86-89% for gold and 57-65% for silver.
Minefinders is redesigning the pit shell, after which the economic projections will be updated. The company also intends to sink an additional 25,000 metres of infill and definition drilling in preparation for an independent feasibility study.
Minefinders has raised $10.1 million via a brokered private placement of 4.4 million shares priced at $2.30 apiece. A 6% commission was paid to BMO Nesbitt Burns, Canaccord Capital and Jennings Capital in exchange for their assistance.
Be the first to comment on "Minefinders ups Dolores resource (April 22, 2002)"