The Represa deposit at the Camino Rojo gold project in Mexico’s Zacatecas state could produce an average of 122,300 ounces of gold and 902,100 ounces of silver a year if it becomes a mine, Canplats Resources (CPQ-V) says.
A preliminary assessment of the deposit, about 50 km to the southeast of Goldcorp‘s (G-T, GG-N) Penasquito mine, indicates Represa would have net cash operating costs of US$340 per oz. including silver credits.
The in-pit resources used in the assessment included only oxide and transitional mineralization within measured and indicated classifications, and excluded inferred resources and sulphide mineralization, which will be the subject of further studies at the Camino Rojo project.
The assessment was based on an estimated in-pit resource of 74.9 million tonnes grading 0.71 gram gold per tonne and 14.2 grams silver per tonne for contained metal of 1.71 million oz. gold and 34.2 million oz. silver.
Using base case prices of US$750 per oz. gold and US$13.50 per oz. silver, the study outlined the scenario of an open pit with a strip ratio of 0.7 to 1 and a lifespan of roughly 10.4 years.
Initial capital costs came in at US$133.8 million. Other highlights included an estimated pre-tax internal rate of return (IRR) of 32.5% and a net present value (NPV) of US$194.9 million at a 5% discount rate. Those numbers jump to a 65.7% IRR and a US$477.2 million NPV if recent metal prices of US$1,036 per oz. gold and US$17.19 per oz. silver are used.
The study envisioned a processing rate of 20,000 tonnes per day. Total operating costs over the lifespan of the mine were calculated at about US$564.8 million with a total capital cost estimate of US$133.8 million.
At a 0.2 gram gold cutoff for oxide and transitional resources and a 0.3 gram gold cutoff for sulphide materials, the deposit’s measured and indicated resources are estimated at 3.45 million oz. gold and 60.7 million oz. silver (163.4 million tonnes grading 0.66 gram gold and 11.56 grams silver).
In the inferred category Represa contains an estimated 0.56 million oz. gold and 7.6 million ounces of silver (31.03 million tonnes grading 0.56 gram gold and 7.63 grams silver).
The deposit is in flat terrain, less than 5 km from a paved highway and high voltage power lines.
The zone’s mineralization starts at surface and consists of a widespread system of gold, silver and base metal mineralization and remains open to the east, west and to depth. Mineralization is hosted by siltstones and sandstones
At presstime Canplats was trading at $2.29 per share. The company has a 52-week trading high of $2.65 and a low of $1.03.