Poor metallurgical recoveries at the Libertad gold mine in Nicaragua have convinced Glencairn Gold (GGG-T, GLE-X) that it is time to go big or go home.
Glencairn will shut La Libertad down for two years while it redevelops the operation as a conventional mine and mill. The shutdown will start at the end of March.
La Libertad, an open-pit mine with a heap-leach plant, produced less than 6,000 oz. gold in the third quarter of 2006, at a cash cost of US$884 per oz., making a US$2.6-million operating loss on revenue of US$3.6 million. Recoveries from the heap-leach system were 41% to 45%, and pit stripping, none of which was capitalized, added to the operating cost.
Upgrades to the crushing and screening circuit did not turn the operation around, so Glencairn is now looking to a more radical solution. A 1,000-tonne bulk sample from La Libertad, processed at Glencairn’s Limon carbon-in-pulp mill, a few hours away by road, showed a 90% gold recovery when conventionally milled, with relatively fine grinding (all material below a 0.15-mm grain size).
In contrast, leach testing on successively finer grinds did not show improved recovery, suggesting that any improvements at the front end of the heap-leach system would have little effect on final production.
La Libertad does not hurt for resources; a recent study by consulting firm Scott Wilson Roscoe Postle put the project’s indicated resource at 16.3 million tonnes grading 1.5 grams gold per tonne, plus an inferred resource at 4.2 million tonnes grading 1.7 grams. That resource assumed recovery of 61% and a US$500-per-oz. gold price to arrive at a cutoff grade of 0.6 gram gold per tonne, assumptions that would be conservative given the higher recovery in a conventional mill.
“The mining rate (5,000 tonnes per day) will remain the same, the infrastructure is in place,” said Peter Tagliamonte, Glencairn’s president. “We will simply be upgrading the milling facilities.”
He said government co-operation for permitting had already been assured. In a conference call, he could not be specific about capital costs for a mill and tailings dam, but said, “I’m not expecting any surprises.”
Glencairn has engaged consulting firm AMEC to supervise test milling of a 4,000-tonne sample from Libertad at Limon, to supervise further metallurgical testing at SGS Lakefield in Ontario, and to put together a scoping study, all by the end of March. A feasibility study would follow, with the new mill built and commissioned by sometime in 2009, assuming the studies showed positive economics.
Getting equipment will control the timing of the project, and Glencairn is looking for used machinery to get back in production more quickly. The plan would also offer the possibility of milling low-grade material stockpiled at Libertad.
Libertad, which has not seen any exploration since 1998, will have a slice of a planned $2.5-million exploration program Glencairn announced in late January. Glencairn will have two drills on the property, doing infill drilling on known resources to upgrade them to reserves, and testing structural extensions of the Libertad ore zones.
The company is looking at production of about 100,000 oz. gold in 2007, at a cash cost between US$385 and US$425 per oz., almost all of it now to come from Limon and from the Bellavista mine in Costa Rica.
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