Vancouver — A scoping study suggests that, even at US$300 per oz. gold,
The study, completed by Denver-based Pincock Allen & Holt, indicates that Estrella could economically produce 100,000 oz. gold annually over 12 years. The zone is part of the the large Mulatos deposit at Salamandra.
The plan envisions total production of 1.2 million oz. gold at an average cash operating cost of US$169 per oz., with initial capital costs amounting to US$34 per oz.
At US$300 per oz. gold, capital costs could be recovered over 2.8-4.3 years. Total initial capital costs ring in at US$40.8 million, including US$3 million for working capital.
The scoping study takes into account a development plan for mining the Estrella zone selectively, followed by heap leaching using 3-stage crushing. Gold recoveries range from 55% for sulphide-rich material to more than 90% for oxides, averaging out at 67% over the life of the mine.
Some 2.7 million tonnes of ore would be processed per year at a stripping ratio of 0.83-to-1.
At US$300 per oz. gold, the proposed Estrella pit contains a measured and indicated resource of 32 million tonnes running 1.77 grams gold. At last count, the total Mulatos deposit contained a measured resource of 43.9 million tonnes grading 1.66 grams gold, plus an indicated resource of 13.1 million tonnes at 1.4 grams gold and a inferred portion of 12.3 million tonnes at 1.37 grams gold.
In early September, a group known as Ejido Mulatos launched legal action in Mexico concerning the amount allegedly owed to them by National Gold under a 1995 surface rights lease agreement over the property. The Ejido Mulatos is a collective group formed to administrate the common agricultural land in Mexico. It claims it is owed US$337,000 plus interest and costs for 2002 and is contesting the validity of the agreement.
National Gold claims the action is without cause because the surface agreement allows for the reduction of the amount of land to be utilized under the lease. In early 2002, the size of the acreage under lease was reduced and the corresponding annual lease payment due to the Ejido was reduced to US$51,000 from US$330,000.
The majors subsequently sold the project to National Gold in March 2001 for $10.5 million, due over four years. In August of that year, the terms of purchase agreement were revised so that all but the $250,000 already paid is deferred until 2008 and 2010 unless the gold price rises above US$300 and US$325 per oz.
Alamos deal
Finding it difficult to raise the necessary financing to advance the project, National Gold inked a deal with
Under the agreement, Alamos can earn a half-interest in the Salamandra project by spending $2.4 million on exploration and development costs, metallurgical test leaching, and any underlying property payments that come due over the next 12 months. Alamos and National Gold would then share equally in future development costs and any additional outstanding payments to Placer and Kennecott. Once the property is placed into profitable production, Alamos would pay a further $2 million to National Gold over the following four years.
The Salamandra property sits within the famed Sierra Madre gold belt and is 400 km south of Tucson, Ariz., and 220 km east of Hermosillo, the capital of Sonora state.
A 1999 feasibility study envisioned a 17,500-tonne-per-day, open-pit operation. Capital costs are pegged at US$120 million, whereas operating costs for the heap-leach operation are estimated to be $5 per processed tonne at a gold recovery rate of 66%.
Delineation drilling
Alamos began delineation drilling in December 2001 in an attempt to boost the grade of the known resource within the Estrella zone. Toward this end, the current drilling campaign is expected to comprise 126 vertical holes varying from 18 to 40 metres in depth, which will be drilled on a 12-metre grid spacing. This subsequently will be closed to a 6-metre spacing if results warrant.
The closely spaced drilling is required to estimate the amount of contained gold that will be mined and stacked on a test leach pad. A bulk heap-leach test will follow the drill program as part of a new feasibility study. The junior is acquiring permits to mine, crush and heap-leach 50,000 tonnes of material.
Meanwhile, with Alamos running the show at Salamandra, National Gold recently inked a deal to pick up six properties in the East Kootenay region of British Columbia.
So far, results are in for 226 rock samples collected on the project. A total of 103 of them returned more than 0.1 gram gold, whereas 39 came back greater than 1 gram gold. Mineralization is hosted in sericitized and silicified sediments, as well as quartz veins in a monzonite stock.
The current program of mapping, chip sampling and heavy mineral sampling is being used to define prospective drill targets.
The price tag for the properties amounts to 250,000 shares, plus a minimum expenditure of $400,000 annually over five years. The vendor retains a 10% net carried interest in each of the properties.
Be the first to comment on "Estrella zone holds promise for National Gold"