The 100% owned Santa Rosa gold project is an intrusive hosted structurally-controlled quartz stockwork system within the prolific Antioquia Batholith. Gold mining within the Santa Rosa project pre-dates the 17th century when an estimated 30 million tonnes were mined. The San Ramon gold deposit (a single shear zone within the Santa Rosa project) trends east-west, dips 70o to the north, extends over 2 kilometres, is up to 50 metres in width and is mineralised from surface. Preliminary metallurgical results give 93% gold recoveries through CIL processing. 45,000 metres have been drilled to date to a vertical depth of over 500 metres with mineralisation remaining open at depth.
The high potassic alteration, anomalous geochemistry and drill results all confirm and are coincident with the historic workings. Other than the San Ramon deposit, numerous additional drill targets have been identified within the Santa Rosa gold project.
Geology within the Santa Rosa gold project is dominated by hornblende-biotite diorite and quartz diorite of the Antioquia batholith. The batholith is a calc-alkaline, plutonic intrusive complex belonging to an early- to mid-Cretaceous magmatic arc. Basement geology is a complex elongated mosaic of Palaeozoic and younger autochthonous and allochthonous terranes that were accreted to the South American continent and subjected to transpressional tectonics and episodic subduction-related magmatism. Mineralisation is contained within numerous mesothermal veins and stockworks structurally related to east-west and north-north-west corridors.
Exploration to date has entailed:
The October 2013 Preliminary Economic Assessment ("PEA") outlines a 1,000 tonne per day operation producing an average annual production of 51,000 ounces over a 10 year mine life. Cash costs are $540/ounce or $76/tonne. The average fully diluted processed grade over the first 5 years of mine life is 5.38 grams gold per tonne. Processing will be whole ore carbon-in-leach with 93% recoveries. Capex is estimated at $73 million plus an $11 million contingency and $7 million of recoverable VAT.
Assuming a long-term forecast gold price of $1,300/ounce gold: pre-tax Net Present Value (5%) is $152 million, Internal Rate of Return is 47% and payback is 1.4 years.
The PEA is considered preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.