DIAMOND PAGE — Holmer boosts potential at Loma Hierro

A feasibility study on the Loma Hierro silver project in western Cuba has concluded that a mine there could produce nearly 5 million oz. in two years.

The project is owned equally by Holmer Gold Mines (HGH-T) and a Cuban state mining agency. According to the study, tabled by Rescan Engineering and Hatch Associates, an open-pit mine could produce 4.8 million oz. silver from a reserve of 280,000 tons grading 16.6 oz. per ton over 2.1 years. Silver would be won through cyanide leaching with an estimated recovery rate of 80%.

The project’s capital cost is pegged at $7 million, with the payback period set at one year. The internal rate-of-return is estimated at 57%; cash production costs, at $2.20 per oz.

Holmer discovered the deposit in 1994, since which time extensive drilling has been conducted, including 164 diamond drill holes. About 380 tons of bulk samples were also collected. Silver mineralization is said to be hosted in laterites and saprolites.

The company is negotiating financing to develop the project, with government approval expected. The company also owns a half-interest in the Los Mangos polymetallic deposit in central Cuba, with the Cuban state holding the remainder.

As of 1998, resources at the deposit, calculated from 23 drill holes, stood at 594,000 tonnes of “yellow” ore grading 1.94% zinc and 1.44% copper, and 442,000 tonnes of “black” ore grading 4.51% zinc, 2.19% copper and 125 grams silver. (These ore descriptions are based on Japanese models. Yellow ore is rich in chalcopyrite; black ore is rich in sphalerite.)