LONDON (Alliance News) - Patagonia Gold PLC Wednesday said it has decided to proceed with the Cap-Oeste project after the success of its Lomada heap leach mine, where it will accelerate an increase in production.
In an operational update, the company said it has decided to reschedule the Lomada mine plan and will increase production from the nameplate to 33,000 ounces a year, from 21,000 ounces currently, in the second quarter of this year. It says the move will further reduce its production costs.
"The new plan will require minimal expansion of the mining fleet with no alterations to the processing plant and gold room, both of which have a design capacity of 40,000oz/annum," it said.
It is also planning to start near mine exploration and drilling in the second half of this year so it can work out resource replacement and a life of mine extension.
Patagonia said the Lomada trial heap leach produced 1.944 ounces of gold in December, bringing fourth-quarter production to 5,178 ounces. Cash costs for the quarter were USD678 an ounce and all-in costs were 856 an ounce. Average gross sales receipts were USD1,263.32 an ounce.
It said costs will be lower in the first quarter as it realises the full benefits of its newly commissioned plant.
"In light of the overall success of its Lomada heap leach mine, the company has decided to move forward with the Cap-Oeste project adopting a two stage development plan," it said in its statement.
"The oxide resource of approximately 200,000 ounces gold equivalent will be developed as a heap leach project similar to, but considerably larger than the Lomada Mine, targeting first production in 2015,2 it added.
Patagonia Gold shares were up 2.5% at 12.3 pence Wednesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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