With proceeds from a recent private placement in hand, Laguna Gold (LGC-T) is set to move ahead with a small open-pit operation at its Rio Chiquito property in Costa Rica.
The company recently completed a private placement for US$6.5 million in corporate notes carrying a 10% interest, and issued warrants for the purchase of 11 million Laguna shares at 4 cents each.
The funds from the placement will be used to upgrade existing processing facilities at Rio Chiquito and resume commercial production. The company operated a small mine near Lake Arenal from 1987 to 1989, producing 3,800 oz. gold and 28,600 oz. silver from 100,000 tonnes of material.
Laguna has since increased its land position to 272 sq. km over 17 concessions and completed 285 holes and 25,000 metres of drilling. The results enabled the company to estimate the resource at 72 million tonnes grading 0.29 gram gold and 4.8 grams silver per tonne, for 670,000 contained ounces gold and 11 million contained ounces silver.
With a new management team now in place, Laguna plans to develop the property using a restricted model that would reduce the resource to 488,000 tonnes grading 3.7 grams gold and 24.8 grams silver, with a stripping ratio of 4.2 to 1. By boosting the stripping ratio to 5.7 to 1, the resource would become 752,000 tonnes grading 3.8 grams gold and 19.7 grams silver.
A study completed by consulting firm Mine Reserve Associates showed that a 1,000-tonne-per-day, open-pit, heap-leach operation could be run at a profit using contract mining and mobile crushing. Such a mine could crank out 32,000 oz. gold-equivalent at a cash cost of US$170 per oz. for two to three years. Production could begin in early 1999. Mineralized material not placed on the pad would be stockpiled in anticipation of an increase in the price of gold.
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