Austral to combine Chilean projects

PERTH (miningweekly.com) – A technical report by dual-listed Austral Gold has shown that combining the companies Guanaco and Amancaya projects, in Chile, would prove profitable for the company.

Guanaco is currently producing at a rate of around 50 000 oz/y, and is projected to continue at this rate for the next five years according to the life-of-mine plan.

ASX- and TSX-listed Austral purchased the Amancaya project in 2014, and since completing an infill drilling programme in 2016, the company has been assessing the possibility of running the two projects as a combined operation, with all production to be treated at the new processing plant built at Guanaco in 2016.

Since the capital cost for the new mill was incurred in 2016, start-up costs would be minimal, Austral told shareholders on Tuesday.

The Guanaco and Amancaya underground operations are designed to produce around 1 000 t/d and 800 t/d of ore respectively, while the openpit operation at Amancaya will deliver an additional 400 t/d of ore. The operations would overlap to produce an average mill feed of around 1 000 t/d during peak production in 2017 and 2018.

The technical report has found that the combined operation would have an after-tax net present value of $71.3-million, and would have a mine life of around five years, based on the current ore reserves, delivering a combined 53 000 oz of gold and 370 000 oz of silver annually.

Average operating costs over the mine life have been estimated at $111/t, with life-of-mine sustaining capital costs estimated at $66.4-million, including reclamation and closure.

Austral CEO Stabro Kasaneva said on Tuesday that the completion of the technical report was a significant step for the company in executing its focus on high-margin production growth.

“Once the new processing plant enters operation, the company plans to transport the high-grade Amancaya production, currently being stockpiled at Amancaya, to the new plant.

“We hope to see the efficiencies of the new plant positively impact our cash flow, with gold recoveries expected to improve by at least 25%.”

Kasaneva said that the company was hoping to complete final commissioning of the new plant shortly, and start combined operations thereafter.