TVI study says Canatuan gossan feasible (May 26, 2004)

A feasibility study commissioned by TVI Pacific (TVI-T) has determined that the oxide resource at the Canatuan massive sulphide deposit on Mindanao in the Philippines can be mined economically as an open pit.

The study, by Calgary-based consulting firm Norwest, is part of a larger study on the economics of developing both the oxide resource in a surface gossan and the underlying copper-zinc massive sulphide deposit. The second part of the study, expected by the end of June, examines the economics of developing the sulphide deposit after the surface resource is in production.

The proposed mine is an open pit containing a reserve of 1 million tonnes grading 3.1 grams gold and 120 grams silver per tonne (base metals have been largely leached from the oxide zone). The study is based on contract mining at daily rates starting at 125 tonnes and rising to 800 tonnes by the 18th month of production.

Processing would require modification of an existing mill on-site, creating a “hybrid” plant recovering the precious metals using both carbon-in-leach and Merrill-Crowe circuits. Recoveries based on small-scale metallurgical testing would be about 95% for gold and 79% for silver.

The project would have an initial capital cost of US$7.4 million and cash production costs would average US$206 per oz. Discounted cash flow analysis, based on a gold price of US$375 per oz. and a silver price of US$5.50 per oz., indicates a net present value of US$7.9 million after discounting at 10%, and an internal rate of return of 116%.