Parral Tailings Project
Location: Hidalgo del Parral, Chihuahua, Mexico
Status: In Production; Commercial Production Target 2015
Reserves: 35 Million oz Silver Equivalent (50:1)*
Resource (M&I): 12.6 Million oz Silver Equivalent (71:1)**
The 141 hectare Parral Tailings site is host to 21.3 million tonnes of tailings left over from 340 years of mining operations. Located near the heart of the city, the tailings have become a nuisance to residents and an impediment to development. Fortunately, inefficient historic recovery processes left significant amounts of silver and gold in the tailings. GoGold's 2013 pre-feasiblity study defined a reserve of 35 million ounces of silver equivalent (20.3Mt @ 38.4 g/t Ag and 0.31 g/t Au)*. GoGold's heap leach facility was financed and built within 18 months and production began in June 2014. In February 2015, GoGold acquired a nearby tailings property containing an additional 5.77 million tonnes at 49 g/t silver and 0.26 g/t gold for an estimated 12.6 million silver equivalent ounces (Eq71/1)**. Material from the new acquisition will be processed at GoGold's existing heap leach facility.
GoGold's Parral operation continues to ramp up to commercial production of an expected 5,000 tonnes per day with an expected average annual yield of 1.2 million oz. silver and 11,000 oz. gold.
Capex - Construction completed for approximately $32.5 million versus our pre-feasibility budget of $35 million.
Head Grade - Average increase of 20% over the original resource block model grade of the Red Hill material of 69 g/t Ag (“grams per tonne”) as determined in the Pre-feasibility study. The average resource grade for the mined areas of the block model from the report is 65 g/t Ag. The plant head grade as determined by the plant is currently averaging 83 g/t Ag. This represents a significant increase in recoverable metal early in the project.
Agglomerate Quality - The agglomerate quality has been good and percolation through the heap is occurring within expectations.
Reagent Consumptions - All reagents to date are well within the forecast consumptions for the material being treated. The cyanide, which is the major consumable, has been well below forecasted consumption which should represent significant savings going forward. The main by-product which is leached along with the silver is copper. The amounts of copper leached have been within the expected range and have not overly impacted cyanide consumption.
Dore Quality - The dore produced has averaged 85% silver with minor amounts of gold, copper and zinc. The quality falls within the assay range accepted by the refineries. Dore bars totaling 41,223.34 ounces of silver and 76.46 ounces of gold have already been shipped to the refinery for treatment.
Average Cost per Tonne - Mining and processing has averaged $6.50 - $8.50 per tonne which represents a significant reduction from the pre-feasibility study predicted cost per tonne of $12.
† Source: GoGold PR#17-2014
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