Eco Oro takes second look at Angostura’s underground option

Vancouver — Eco Oro Minerals (EOM-T) has announced an initial resource on its Mongora target and an updated underground scoping study on its Angostura project as company tries to revive its fortunes in Colombia.

The company, which changed its name from Greystar last August, is looking into an underground operation at Angostura because the Colombian government rejected its open pit gold project as it violated rules protecting the high-elevation paramo ecosystem.

The updated study on Angostura outlines a 10-year mine life processing 6,000 tonnes per day with total recovery of 2.7 million gold equivalent oz., compared with a 14-year, 4,000-tonne-per-day mine producing 1.9 million oz. gold and 7.7 million oz. silver in its initial 2011 underground study. The new study also switches to bio-oxidation as the method of choice, after finding roasting to be the best choice in the last study.

The after-tax net present value, based on a 5% discount and US$1,200 per oz. gold, came in at US$344.5 million and the internal rate of return at 14.8% for the latest study using bio-oxidation. The study showed that bio-oxidation adds fully US$141.3 million to the after-tax NPV compared with roasting, while the 2011 study, showed roasting came ahead by US$45-million in pre-tax analysis.

Initial capital costs are estimated at US$529 million and sustaining capital costs of US$117 million, with payback in 5.5 years. Over the life of mine cash costs should be roughly US$494 per oz. including silver by-product credits, or US$702 per oz. total.

Meanwhile the company’s resource estimate for its Mongora deposit, sitting 3 km south of Angostura, came in at 3.1 million inferred tonnes grading 2.86 grams gold and 4.62 grams silver for 283,000 oz. gold and 457,000 oz. silver at a 1.5 gram gold cut-off. Eco Oro stated that the Mongora deposit remains open to expansion along strike and at depth.

In August 2011 the company stated that it expected to have an updated resource out on Angostura and its Mongora resource out by the end of 2011. While the Mongora resource is out the company still has yet to release an updated Angostura resource.

The company has also yet to find a permanent replacement for its president and CEO after Rafael Nieto Loaiza stepped down in September 2011 only a few months into the job. Anna Stylianides has been interim president and CEO since then. In November 2011 the company also announced that David Heugh, its chief operating officer, would step down at the end of February 2012.

Eco Oro’s share price moved up as much as 14¢ to $2.44 in the days following the updated PEA, but then started to move down, closing at $2.05 on the Mongora estimate. The company has a 52-week share price range between $1.35 and $3.62 and 84.2 million shares outstanding.