Platoro project placed on hold

The Platoro gold property in Colorado is being placed on a care-and-maintenance basis by its two owners, Panorama Resources (VSE) and a subsidiary of Belgium-based Union Mines, until there is an improvement in the price of gold.

To date, Union has spent US$18 million and Panorama US$5.7 million on the project near Galactic Resources’ Summitville gold mine.

Panorama originally had the right to earn a 60% interest by spending US$8 million, but a recently revised agreement will result in Panorama giving up control and a dilution of its current 42.4% interest to about 41%. The Platoro project is reported to host preliminary reserves in all categories of about 1.2 million tons averaging 0.17 oz. gold and 5.96 oz. silver per ton. Based on a preliminary feasibility report, capital costs of about US$8-10 million would be required to establish production at 450 tons per day with US$325 oz. gold as a break-even point.