Andean Announces Positive Feasibility Study Results for its Cerro Negro Gold Project
Andean Resources (ASX/TSX: AND) is pleased to announce the positive Feasibility Study (FS) results of its 100% owned Cerro Negro high-grade gold and silver project in Santa Cruz, Argentina. The FS was completed based on the previously released gold and silver mineral resource estimates at the Eureka West and Bajo Negro deposits, along with the new resource for the Vein Zone deposit. The FS was compiled by Ausenco Ltd., with the participation and contribution from industry consultants. The study defines an operation based on sequential mining of the three deposits by underground and open pit mining, along with milling and refining of the ore on site. The mine will operate at a production rate of 1,850 tonnes per day, producing an average of 200,000 ounces (oz) of gold over a 10 year mine life, at an average cash cost of about $168/oz (based on silver by-product credits of $14/oz).
Highlights of the Feasibility Study include:
For the first five years, Cerro Negro would produce up to a rate of 285,000 oz of gold per year at an average cash cost of $60/oz (inclusive of silver by-product credits), making Cerro Negro one of the lowest-cost undeveloped gold projects in the world
A significant internal rate of return using $850/oz gold (Au) and $14/oz silver (Ag) on an initial capital investment of $275 million
Probable reserves of 2.1 million oz of gold and 20.6 million oz of silver based on mining the indicated resources only at Eureka West, Bajo Negro and Vein Zone
Inferred resources at Eureka West, Bajo Negro and Vein Zone have been excluded from the FS. In addition, the newly discovered veins at San Marcos, Mariana Norte and Mariana Central have also been excluded. The mineralization excluded from the FS will be included in subsequent plans
Mine life of 10 years with direct employment of 533 employees
A sustainable development fund to invest 1% of after-tax profits into the local communities
Overall metallurgical recoveries have improved to 95% for gold and 86% of silver
International Cyanide Management Code compliant design
Significant upside remains:
o Converting the significant inferred gold resources to indicated status with infill and step-out drilling, thereby allowing these resources to be included in a future mine plan
o Further defining the size and potential of the latest discoveries at the San Marcos, Mariana Norte and Mariana Central deposits with the intent to incorporate these into future mine plans
o The Eureka West deposit remains open to the west and at depth, with exploration to resume once the current underground development is sufficiently advanced
o The Bajo Negro deposit remains open along strike and at depth, with exploration to re-commence later this year
o Further exploration potential at other Cerro Negro deposits
AND Price at posting:
$3.15 Sentiment: LT Buy Disclosure: Held
