San Anton Sketches Out Mine Plan For Cerro Del Gallo

VANCOUVER — San Anton Resource (SNN-T) has a scoping study in hand for the Cerro Del Gallo gold-silver- copper deposit in central Mexico that outlines a mine plan for the large, low-grade, open-pittable resource.

The study looked at the economics of developing an open-pit mine and heap-leach operation churning through 4 to 5.5 million tonnes of ore annually for 14 years, or 11,000 to 14,000 tonnes per day. Initial capital costs to develop the crushing and heap-leach facilities came in at US$82 million, which could be repaid in a little over two years. Heap-leach gold recovery from the weathered rock is estimated at 72- 75%; recovery from oxidized rock is lower, averaging 55%.

To add a carbon-in-leach (CIL) plant, which would recover gold from the primary mineralization that underlies the weathered and oxide zones, would cost another US$68 million.

It would cost US$415 to produce an ounce of gold at the site.

The scoping study pegged the in-pit resource at 69.9 million measured and indicated tonnes grading 0.66 gram gold per tonne and 13.6 grams silver per tonne. The strip ratio would average 0.74 to 1.

For the first two years, the mine would work through 4 million tonnes of ore annually, then an expansion would increase throughput to 5.5 million tonnes per annum. Over its lifespan, the operation would produce just over 1 million oz. gold and 11 million oz. silver.

The overall resource for Cerro Del Gallo stands at 461 million measured and indicated tonnes grading 0.27 gram gold, 11 grams silver and 0.11% copper, using a 0.2-gram-gold cut-off grade. The inferred resource at the same cut-off is 166 million tonnes grading 0.11 gram gold, 7 grams silver and 0.1% copper. Combined, the resources contain 4.5 million oz. gold, 202 million oz. silver and 1.4 billion lbs. copper.

San Anton, and its Australianbased parent company Kings Minerals NL (KMN-A), have been developing the property, in Guanajuato state 270 km northwest of Mexico City, since 2004. Goldcorp (G-T, GG-N) has a 36% share in the project, having dropped from 49% when the company declined to fund any exploration on the property in 2007-08.

The San Anton property is 235 sq. km and constitutes 10 contiguous concessions that cover the San Anton mineral field. The property encompasses several old mines worked for high-grade, vein-hosted silver and gold and is located about 23 km northeast of the historic Guanajuato mining field. The site is well-serviced by roads, power lines and a water supply.

The Cerro Del Gallo deposit comprises an elongated felsic intrusion surrounded by strongly altered host rocks. The intrusive and the wall rocks are mineralized, with gold, silver and copper hosted in disseminations as well as veins and fractures. Gold grades are highest close to the intrusion and decrease moving away; copper grades are the opposite.

Kings Minerals created the Toronto-based San Anton in 2006 to generate capital for the Mexican project, raising $17.25 million in an initial public offering. Kings Minerals is now in the process of re-integrating San Anton into its fold with an all-share takeover of the 28% of shares it does not currently own, to be completed by May. Kings Minerals then plans to list on the TSX to generate funds to further develop San Anton.

San Anton is now working to complete an initial feasibility study of Cerro Del Gallo, in late 2010.

San Anton’s share price was up 2¢ on the scoping study news. The company has a 52-week trading range of 9¢ to 38¢, and 106 million shares outstanding.