An engineering and optimization study on the Canatuan massive sulphide deposit on the Philippine island of Mindanao has increased reserves and production rates for TVI Pacific (TVI-T).
The study increased reserves in the gossan (oxidized) zone to 956,900 tonnes grading 3.51 grams gold per tonne and 119.86 grams silver, and in the primary (unoxidized) sulphide zone to 1.5 million tonnes of 1.35 grams gold, 62.12 grams silver, 2.79% copper and 2.03% zinc. As well, production rates during the first stage of mining, which is expected to last about two years, will rise to 1,850 tonnes per day, compared with 1,000 tonnes indicated in a previous feasibility study. Production rates during the second stage, which is projected to last 4.5 years, will remain at the original rate of 850 tonnes per day.
Mill feed for the first stage will come solely from oxidized ore, whereas the second stage of production will involve primary ore only. The new mine life of 6.5 years represents a 1.5-year decrease from previous calculations.
In the first full year of production, 73,542 oz. gold and 2.9 million oz.
silver are expected to be produced at a cash cost of US$214.36 per oz. gold.
The project is expected to generate an after-tax cash flow of US$12 million per year, with initial capital costs pegged at US$27.8 million. As a result of the increase in production of gossan ore, the company has reduced the initial payback of capital to 1.2 years.
TVI is currently running a 50-tonne-per-day pilot plant, which is processing oxidized material grading 6 grams gold and 80 grams silver. In addition to generating US$100,000 per month, the plant is testing a hybrid processing system incorporating both Merill-Crowe and carbon-in-leach methods of gold extraction. This system, which is applicable only to oxidized ore, is expected to achieve recovery rates of 96% for gold and 95% for silver.
The company is awaiting a final permit for construction of the main plant, which is expected to take about one year to build. TVI will continue with exploration programs aimed at defining additional satellite deposits of both gossan and sulphides.
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