Full-scale construction is underway at Glamis Gold‘s (GLG-T) El Sauzal gold project in Chihuahua State, Mexico, now that key permits are in hand.
The change of land use permit authorizing construction and operation of El Sauzal followed the recent completion of an environmental impact statement at the project.
Glamis is currently expanding camp facilities, preparing the mill site and setting up workshop and administration buildings. Construction of the 92-km-long access road to the project is on schedule.
Mill commissioning and initial gold production from the open-pit, conventional oxide milling operation is slated for late 2004; commercial production should begin during the first quarter of 2005.
El Sauzal is expected to produce 190,000 oz. of gold per year for 10 years at a cash cost of US$110 per oz., based on a mill capacity of 5,500 tonnes per day. At an estimated capital cost of US$101 million, including US$10 million in contingencies, the project’s internal rate of return comes in at 25%, based on a gold price of US$300 per oz.
El Sauzal’s proven and probable reserves stand at 18.5 million tonnes grading 3.37 grams per tonne, for 2 million oz. of contained gold. The reserve calculation is based on a gold price of US$300 per oz. and a cutoff grade of 0.8 gram per tonne.
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