Gran Colombia Gold (GCM-T) expects to nearly double production at its Segovia gold operation in Colombia to 130,000 oz. in 2012, targeting an annual output of 200,000 oz. by 2014.
Last year, the operation churned out 68,704 oz., accounting for 75% of the company’s total production. Consolidated cash cost for the year came at US$1,254. The junior aims to lower costs to less than US$900 per oz. by 2014.
The company says the increased output would come from the company’s growing resources, mill expansion, and new mine.
Today, the junior producer reported a new resource estimate for the Carla mine, which is part of the Segovia complex. Carla has 59,000 oz. gold from 250,000 tonnes grading 7.5 grams gold per tonne in the indicated category. It has another 54,000 oz. from 340,000 tonnes at 4.9 grams gold in inferred.
The resource, which the company says was in-line with its expectations, is based on 9,200 metres of diamond drilling and 32 underground channel samples.
It brings measured and indicated resources at Segovia to a total of 292,000 oz. gold based on 750,000 tonnes averaging 12.1 grams gold per tonne. Inferred resources now stand at 1.14 million oz. from 2.60 million tonnes at 9.9 grams gold, at a 3-gram cutoff.
The Segovia operation is located in the country’s Antioquia Department and along with the underground Carla mine include the Providencia, Sandra K and El Silencio mines and the Las Aves vein system project.
To further upgrade the existing resource, the junior had budgeted US$13 million on a 51,000-metre drill program for the year, which will include 147 holes.
Along with expanding resources, the company is increasing its Maria Dama mill’s capacity to 1,000 tonnes per day this quarter, with further expansion to 1,500 tonnes per day in the third quarter.
Around this time, the company plans to start building a mine at the Las Aves project, with production targeted in late 2013.
At its Marmato gold project in Colombia’s Department of Caldas, the company is carrying out a prefeasibility study, assessing the potential of developing a modern bulk-tonnage mine. The study should be done by July.
For now, in the near-term, the existing underground mine at Marmato is slated to generate 25,000 oz. gold a year.
If the company builds a new mine, it expects to ramp up Marmato’s output to 340,000 oz. gold by 2016.
The company’s shares closed at 45¢, down a per cent
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