Cerro Resources is presenting at the Toronto Mining Investment Show during the first week of March.
Also approaching it`s company making Bankable Feasability Study.
Cerro del Gallo on the DFS trail; not a time for investors to yawn
Cerro Resources NL has been quietly progressing its flagship Cerro del Gallo silver-gold mine (Cerro’s interest 66%) in Mexico. Important activities underway include testing the processing parameters with ore to ensure maximum metal recovery. While activities appear to be less compelling for investors at Cerro, a programme of drilling has commenced at Namiquipa.
Cerro del Gallo is the company’s major focus where activities to complete the definitive feasibility study (DFS) are well underway. A programme of 433 holes totalling some 114,000 metres has been completed at Cerro del Gallo. The drill programme has allowed the
company to define a mineral resource for Cerro.
The Cerro del Gallo deposit has a current Canadian National Instrument 43-101 compliant mineral resource estimate of 4.5 million ounces of gold, 202 million ounces of silver and 1.4 billion pounds of copper.
Crushing occurs at the very front-end of processing, with testing indicating that better silver- gold recovery is possible from heap leaching a finely ground ore. A schematic of the stage one processing flow follows.
Current testing of the ore through the heap leaching process has resulted in a decision to insert high pressure grinding rolls in the preliminary crushing process.
Under stage one processing Cerro del Gallo has a reserve of 32.2 million tonnes of proven and probable ore reserves showing 0.69 grams per tonne gold (g/t) and 14.8g/t silver.
The stage one resource will support a mine with an initial life of eight years. The plant will process 4.5 million tonnes per annum to produce some 450,000 ounces of gold and 532,000 ounces of silver. The plant would have an operating cost of US$491 per gold equivalent ounce. The capital cost is estimated at US$88 million.
Through the DFS, the company is currently testing the heap leaching process with the inclusion of a carbon-in-leach or stage two upgrade. Upgrading the leaching process will add an additional 45 million tonnes of measured and indicated resource to Cerro del Gallo.
The optimising of the leaching process will improve the investment matrix of the proposed plant. Annual processing will increase to 7.5 million tonnes per annum and increase production to 682,000 ounces of gold and 4,730,000 ounces of silver. Operating costs would as a result of the additional leaching process, rise to US$541 per ounce of gold equivalent ounce. The life of the mine would also step-out to 14 years. The additional capital cost is expected to be US$83 million.
Production from Cerro del Gallo is scheduled to commence in 2012/13.
There are three prospects the company will focus on that are in close proximity to its Cerro del Gallo project; these are the Carmen-Providencia system, the Ave de Gracia system and the San Luis Rey epithermal system.
We have been encouraged by the early results from the company’s near mine drilling. Some of the better intersections include 4.6 metres showing 428g/t silver and 3.52g/t gold and six metres showing 243g/t silver and 1.7g/t gold. These are significant silver intersections.
Looking ggod!
CJO Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
