Con

Metallica Resources (MR-T) has drawn up a simplified mine/mill plan for its 50%-owned Cerro San Pedro gold-silver project in central Mexico.

The simplification entails eliminating the crushing circuit and sending run-of-mine material directly to the heap-leach pads.

At a gold price of US$275 per oz. and a silver price of US$5.25 per oz., the deposit is estimated to contain 45 million tonnes of material grading 0.56 gram gold and 23.3 grams silver per tonne, equivalent to 815,000 oz. gold and 33.6 million oz. silver at a stripping ratio of 1.4-to-1. Gold recoveries are pegged at 73%; silver, at 38%.

The total cost of such an operation is estimated to be US$41.9 million, significantly less than an earlier estimate of US$67.8 million. The mine would produce an average of 100,000 oz. gold and 2.1 million oz. silver per year at cash operating costs of US$135 per oz.

Metallica’s new partner on the project is Reno, Nev.-based Glamis Gold (GLG-N), which recently bought all the Mexican assets of Cambior (CBJ-T), including a half-stake in Cerro San Pedro.

Glamis intends to do its own internal feasibility study, though it is believed to favour the run-of-mine option.

In 1999, Cambior completed a feasibility study, which incorporated a 3-stage crushing plant. Proven and probable reserves under the plan were 64 million tonnes grading 0.62 gram gold and 24.5 gram silver at a stripping ratio of 1.5-to-1. Cambior used a gold price of US$300 per oz. and a silver price of US$5.50 per oz. for calculating reserves. The study estimated cash operating costs at US$140 per oz.

In May, the joint venture received the land use licence from the state of San Luis Potosi.