AS ITS name would suggest, EnviroGold Limited’s approach to gold production is to use technology that is both beneficial to the environment and able to generate returns to its shareholders by mining and efficiently processing polymetallic and sulfide ores. By Lou Caruana -
The company is on a growth trajectory through the development of exploration and mining assets under its direct control, assisted by its expertise in efficient gold and silver recovery from toxic polymetallic ores using Xstrata Technology’s Albion Process, according to executive chairman Brian Johnson.
EnviroGold is aiming to have an attributable production of at least 150,000 ounces of gold equivalent within three years from operations in the Dominican Republic and Peru, as well as having a number of other gold projects in the pipeline in Latin America and China.
Based on his past record of guiding companies from their conceptual stage through to operations and profitability, and serious increases in market capitalisation, as in the case of Portman and Mount Gibson Iron, Mr Johnson could be expected to be in control of another winner.
The Albion Process involves a patented sulphide oxidation technology utilising a combination of ultrafine grinding and oxidative leach which results in zero sulphur dioxide emissions, remnant metals being left in a stable state, and with generated acid neutralised during the process. The plant operates at relatively low temperatures and at atmospheric pressure, with comparatively low capital costs, and is not sensitive to climatic conditions as in the case of bacterial oxidation.
“We are confident that when our Las Lagunas gold project in the Dominican Republic is commissioned early next year the Albion Process will attract world-wide attention as an attractive technology for the efficient extraction of gold and silver from polymetallic sulphide ores,” Mr Johnson said.
EnviroGold’s current focus is on the construction of its 70% owned Las Lagunas project, which is located approximately 100 km north east of the Dominican Republic capital Santo Domingo. It is also ramping up the development of its gold sulphide opportunity at Trujillo in northern Peru after new data on the regional potential to provide concentrate feed has come to light, and as it strives to increase its resource base in other Latin American nations including Equador and Venezuela.
The existing indicated JORC Resource of 5.137 million tonnes of tailings at Las Lagunas contains gold of an average grade of 3.76 g/t and silver at 38.62 g/t. The tailings result from inefficient treatment of refractory ore from the Pueblo Viejo gold mine between 1992 and 1999.
The tailings have the potential to generate and release over 700,000 tonnes of sulphuric acid as they oxidize if not treated.
Metallurgical testwork undertaken in Brisbane by HydroMetallurgical Research Laboratories using Xstrata Technology’s Albion pilot plant has established expected recoveries of 70.1% for gold and 62.3% for silver and the project is expected to produce around 80,000 ounces of gold equivalent per year.
EnviroGold has completed a bankable feasibility study for the project and received environmental and construction permitting necessary to commence development this month. Commissioning is expected within 12 months.
It is possible that the current project life of 6.5 years could be extended via the toll treatment or joint venture mining of numerous refractory gold deposits located near to Las Lagunas which can not justify a stand-alone treatment plant.
Mr Johnson said the Trujillo Gold Project in Peru was also emerging as an exciting prospect for the company.
“The proposed centralised plant location approximately 36km south east of the coastal city of Trujillo, is in desert conditions ideal for tailings placement from the Albion plant, but with adequate water, low cost power, and a skilled work force available for the project,” Mr Johnson said.
“The low elevation at the site will also reduce the cost of oxygen production for the proposed plant.”
Click here to read Part 2
EnviroGold targets Latin American gold - Part 2
Friday, 30 May 2008
ENVIROGOLD recently advised the market it had received a report prepared by Dr Jorge Paredes, an independent Lima-based consulting geologist, that summarises the metallogenic information on known mineral deposits in the polymetallic sub-province of the northern Andes region of Peru.
The report outlined the economic potential of properties in the region east of Trujillo, including significant sulphidic mineralisation at economic gold and silver grades remaining in a number of closed mines with high levels of arsenic and antimony. Added to this are high-grade tailings that have resulted from ineffective extraction of gold and silver from polymetallic mines.
The prospective sources of feed identified by Dr Paredes within economic haulage distance of the proposed Albion process plant are additional to those in mines at Cascajal and Sayapullo owned by Corporation Minera San Manual (CMSM), a likely supplier of concentrate to the the Trujillo Gold Project.
EnviroGold proposes to undertake the Trujillo Project in two stages with the objective of producing 150,000 ounces of gold equivalent within three years and emerging as a miner in addition to developing its expertise in gold extraction from toxic polymetallic ore bodies.
EnviroGold is at an advanced stage of negotiating option agreements to purchase three of the closed mines identified by Dr Paredes which should be suitable for re-opening and supplying concentrate feed to the first Albion plant at Trujillo.
The Company is confident of formalising these options in the near future and will release details when the properties have been secured, Mr Johnson said.
“The Company has identified sufficient low cost mining opportunities in Peru which, once secured, will require an aggressive exploration program to establish resources, together with metallurgical testwork to determine suitability of the Albion oxidation process and likely recoveries,” said Mr Johnson.
“It is probable this program and the following feasibility study will take until the end of 2008 to complete with the aim of constructing the first Albion plant at Trujillo in 2009 with a target production of 75,000 oz per year of gold equivalent. The second plant is planned for 2010.”
The Company expects to complete a scoping study of its intended developments in Peru within three months after which it will advise the market of capital requirements, source of funds and financial projections for the second phase of its corporate development.
Beyond Latin America, EnviroGold has interests in China. It has signed a Memorandum of Understanding with Shandong Gold Mining Development Company Limited (SGM) in China to jointly (80:20 non contributing) construct a centralized Albion process plant to recover gold from historic high grade acid generating gold tailings deposits scattered throughout Shandong Province.
SGM’s parent company is a State controlled major gold miner listed on the Shanghai Stock Exchange.
The concept is for SGM to make suitable tailings and mine concentrates available to the joint venture at nominal cost but in the expectation that EnviroGold will meet all capital and operating costs, with SGM to receive 20% of after tax profits.
Mr Johnson said “that he was confident EnviroGold’s business plan would have application world-wide and the real challenge was not in identifying investment opportunities or growing gold production but in the Company’s ability to develop a management structure capable of operating successfully in a wide variety of countries at the same time”.
“It is important that the Company emerges as a skilled miner with metallurgical expertise at a steady and realistic rate and therefore our focus in the near term will be on a limited number of locations in Latin America but with the real prospect of becoming a sizeable producer of gold and silver”.
EVG Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
