Manhattan tables Tambo Grande plan

Manhatten Minerals (MAN-T) has released results of an independent feasibility study on its Tambo Grande property in Peru.

The latest study envisages an operation 25% larger than that considered in earlier studies. It proposes the initial mining the TG-1 gold-silver deposit at a rate of 7,500 tonnes per day to produce 260,000 oz. of gold and 3.2 million oz. silver annually at an average cash cost, net of silver credit, of US$83 per oz. gold. The mine’s lifespan is pegged at 3.5 years.

Initial capital cost for the first phase of development is put at US$180 million; mining cost will ring in around US$1.12 per tonne, with processing costs hitting US$ 6.20 per tonne.

Cash flow from the gold-silver operation is expected to provide for a mine expansion and construction of a zinc-copper plant in the third year of development. Initially operating at 10,000 tonnes per day, plant capacity will be doubled in the fourth year, via a conversion of the gold-silver plant’s grinding capacity. Cash operating costs are projected at US49 per lb. of copper, net of zinc and precious metals credits. The base metal portion of the mining plan is to last 9 years. Capital cost for additional mine equipment, the copper-zinc flotation plant and tailings pond expansion for the second phase of operation is US$145 million.

Probable reserves contained in the oxide portion of the TG-1 desposit are set at just under 8.2 million tonnes grading 3.34 grams gold and 58.7 grams silver per tonne. The sulphide portion has probable reserves of 57.8 million tonnes running 1.5% copper, 0.9% zinc, 0.5 gram gold and 25 grams silver.

Included in eth initial capital cost of US$180 million is the cost to resettle a portion of the town of Tambogrande, a small agricultural centre 865 km northwest of Lima, Peru. The town’s population numbers around 16,000.

Earlier this summer, an overwhelming majority of the residents of Tambo Grande voted to reject Manhattan’s plan to develop a mine in a non-binding local referendum.

The project is no stranger to controversy. Last year, a politically motivated group vandalized the property. Manhattan attributed the incident to a group intent on disrupting government and industrial activities in the run-up to a national election. The disruption forced Manhattan to delay its feasibility study on the TG-1 oxide gold deposit, originally expected by June 2001. The feasibility and environmental impact studies are now expected by mid-2002.

Manhattan is earning a 75% stake in Tambo Grande, which consists of 10 concessions measuring 100 sq. km. The company has until May 2003 to decide whether to go ahead with its plan for an open pit mine.

Manhattan’s shares were off 2 at 47 in late-afternoon trade on the Toronto Stock Exchange on Sept. 13.