The bulk sampling program completed in 2007 calculated a mean grade of 25.48 g/t Au in a sample size approximately 50 times that of the drilling samples. Based on this information and other qualitative evidence, the Company expects that the actual grade of the high-grade portion of the Escondida zone will be significantly higher than the reserve grade.
In addition, recent discoveries in close proximity to the Escondida area indicate that there may be several opportunities to increase the amount of high-grade ore available to mine and process.
Based solely on the proven and probable reserves of the milling ore, the technical report supporting the decision to construct a 500-tonnes-per-day gravity mill confirmed that the development and processing of the Escondida high-grade zone is economically robust. Laboratory test work determined that more than 90% of the coarse high-grade Escondida ore is recoverable in a crushing, grinding, and gravity milling circuit. To further increase gold recovery from the Escondida ore, the mill tailings will be delivered to the agglomeration facility and then stacked on a heap leach pad, where at least another 5% of the gold is expected to be completed for a total of 95% or more.
Key findings of the 500-tonnes-per-day gravity mill scenario include:
- Gravity recovery: >90%
- Gravity plus leach recovery: 99.4% when ground to 88 microns (which is based on laboratory testing results and thus operating results may be less)
- Initial capital cost: $17.5 million (including a 20% contingency)
- Mill operating costs: $12.08 per tonne of ore, which excludes mining costs
