Net Present Value of the 25% equity stake in the Peruvian gold plant is ~4.2 million
The Peru JV has identified, evaluated and moved into advanced negotiation to acquire or invest in a number of exciting projects across Peru:
Puno Gold Placer Mine – The JV is establishing an operating company to conduct placer mining operations in a well known world class placer deposit in mountainous northern Peru. Agreement has been made with a local miners cooperative to acquire 75% of the project by operating an existing gravimetric plant to process auriferous gravels mined at an initial rate of 3,000m3 per day at a conservatively low average grade target of 0.25g/m3. Studies and permits to commence operations is expected to take up to one year, within which the operating company will move to acquire similar scale projects in the immediate area. Importantly this project is seen as a bridgehead onto this world class placer deposit.
Huaraz Silver Mines – The JV is in the final stages of negotiating a farm-in based staged investment for increasing equity and operational control of two separate silver mining operations in the highlands of central Peru. These two mines are currently in production. The JV aims to initially optimise existing operations before conducting targeted internal exploration to identify mineable reserves and subsequent upscaling of mining operations, including installation of a flotation processing plant. In addition to high grades of silver (Ag), both of these deposits contain significant lead (Pb) and zinc (Zn) mineralisation with some samples reporting ore grades of copper (Cu), gold (Au) and antimony (Sb).
Piura Gold-Silver Exploration – The JV has reached the final stages of negotiating sole access to 17,000 hectares of very prospective ground in northern Peru. This highly mineralised area is prospective for epithermal and porphyry system deposits and is the focus of a number of major international mining companies. The initial phase of the project is seen as a bridgehead into the area and will include the construction of a small cyanide/flotation processing plant on a 50/50 ownership basis between the JV and the local community association. Access to prospective mining ground underwritten by support from the community is seen by the JV as removing a critical project risk, vis-à-vis opposition from community groups (an issue in parts of Peru). A JV operational subsidiary company set up to accommodate this project will also be actively seeking other high grade projects in the immediate area.
It should be noted that these advanced projects have been progressed to the point of executing binding Memoranda of Understanding (MOU), after lengthy geological, engineering, legal and financial due diligence by the Peru JV team in both Lima and Sydney. The actual names of these projects, mining operations and localities has not been disclosed herein in order to protect business advantage at this late stage of final negotiations with our prospective partners.
CGU Price at posting:
4.5¢ Sentiment: LT Buy Disclosure: Held
