Eldorado breaks ground for second gold mine in Mexico

Construction is under way at the Trinidad gold project in Mexico’s Sinaloa state.

The mine, a 51-49 joint venture between Eldorado (TSE) and Almaden Resources (VSE), is expected to produce 30,000 oz. gold in its first year of operation, dropping to 22,000 oz. per year for the remainder of its 4-year life.

Minable reserves in the Taunus deposit are estimated at 2.3 million tons grading 0.058 oz. gold per ton, based on a cutoff grade of 0.015 oz. gold with a stripping ratio of 1.68-to-1.

The capital cost of the heap-leach project is estimated at US$6.1 million. Startup is expected by the third quarter, with cash costs projected at US$242 per oz.

Financing for the mine (including Almaden’s share) will be drawn down from a US$20-million credit facility Eldorado arranged through NM Rothschild & Sons.

Including its interest in Australian miner Croesus Mining, Eldorado expects its consolidated gold production to total 165,000 oz. in 1996 at an average cash cost of US$264 per oz.

The company expects to produce 51,000 oz. per year from its wholly owned Colorada mine, also in Mexico, and 6,000 oz. from its Trinidad mine. From the Sao Bento mine in Brazil, Eldorado will crank out 100,000 oz. per year; and from the Binduli mine in Australia, 8,000 oz.

The Sao Bento is one of the assets the company will acquire through a deal with Gencor Group, whereas the Binduli mine is held by 19%-owned Croesus Mining.