The study, performed by AMEC E&C Services, tested the economics of an open-pit/heap-leach operation. It used a reserve of 35.5 million tonnes grading 68 grams silver and 0.26 gram gold per tonne, which allows for an 8-year mine life at the daily mining rate of 12,500 tonnes.
The capital cost is estimated at US$45 million, including US$8 million in indirect costs and US$5 million for contingencies. Operating cash costs, after credits for byproduct gold, ring in at US$3.25 per oz. The internal rate of return for the project (after tax) is 17%.
The planned pit would have a stripping ratio of 1.08-to-1, and the reserve it encloses was based on prices of US$4.60 per oz. for silver and US$300 per oz. for gold. A planned operating period of 350 days annually would mean that about 4.5 million tonnes would go on the leach pad each year. The study supposes Corner Bay would engage a mining contractor but would itself cover the technical aspects of the operation, such as surveying and grade control.
Lower-grade material mined in the early years of the operation will be stockpiled, then sent to the leach pad later in the mine’s life. Under the proposed mining plan, the pit stripping ratio peaks at 1.74 in the seventh year of mining, at a time when ore grade will also be near its low.
Results from earlier metallurgical work by consulting firm Metcon were used in the study, with some supplementary work directed by AMEC. The final process would have the ore crushed to 6 mm and passively agglomerated while it is conveyed to the leach pads. The material would be pretreated with cyanide solution and calcium oxide before being placed on the pad for cyanidation.
The leach pad itself will have a capacity of 13.5 million tonnes at the start of production but will be progressively expanded to hold 36 million tonnes in six lifts of 6 metres each. A preliminary geotechnical evaluation of the proposed pad site is complete.
Silver recovery is expected to be 71% in the first three years, falling to 51% as material from a more refractory zone of the deposit is mined. Final recovery from the leach solution will accomplished by means of Merrill-Crowe zinc dust precipitation and smelting.
In a deal with
Corner Bay has already submitted an environmental impact statement to federal environmental regulators and arranged for surface rights with local landholders. The company is seeking water rights but so far has not been able to arrange takeoff privileges with existing holders. It expects to have all the necessary permits in place by early next year.
Directors of Corner Bay and
In May, Pan American offered to trade Corner Bay shares for 0.54 share of Pan American and 0.25 share in a new company, which would have held $5 million cash for exploration. The simpler, revised offer was introduced by both companies on in mid-June.
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