Great opportunity at this price25 Oct 2017 13:14
Metminco moves on Miraflores finance
THE early-morning mist swirls over Quinchia, a quiet mountain town in Risaralda, Colombia, near where Australia�s Metminco (AU:MNC) aims to build a gold mine at its Miraflores deposit. From Metminco�s camp above the town you can make out the city of Manizales perched on the mountain ridge across the Cauca valley to the east, while to the north is the sheer white mass of the long-dead volcanic heart of Batero mountain rising out of the greenery. By Paul Harris at Quinchia
Exploration drilling at Miraflores in Colombia
TOPICS (select for more information):
GoldMetminco Miraflores William HoweColombia
Miraflores was one of the early highlights of Colombia�s Mid-Cauca porphyry belt exploration, a project that ignited investor�s imagination in 2010 when former operator Seafield Resources achieved the record for most shares traded on the TSXV in a single day after releasing a drill intercept of 449m grading 1.29g/t Au, including a 23.95m segment grading 9.18g/t Au. Seafield traded some 70 million shares that day.
Having slipped from prominence during the exploration market downturn, Miraflores is re-emerging with a new feasibility study and, possibly, a fast track to production. The company is eyeing annual output of 45,000 ounces of gold and 22,600oz of silver over about 9.5 years from a 1,300 tonnes per day plant for a capital cost of US$71.8 million, excluding a contingency of 7.67% (or $6.1 million) based upon an EPCM approach whereby Miraflores assumes general risk.
The FS gives estimated LOM cash operating costs of $599 an ounce and LOM all-in sustaining costs US$643/oz using a $1,300/oz gold price that would position Miraflores in the first cost quartile of gold operations globally. An additional $18.5 million in sustaining capital is required over the life-of-mine (LOM).
The project yields an after-tax net present value of $72.3 million at an 8% discount rate (as per JORC requirements, compared to the 5% discount rate that Canadian juniors typically use) and an internal rate of return of 25%.
Together with the FS, Metminco declared a maiden JORC and NI 43-101 compliant proven and probable ore reserve estimate of 2.98 million tonnes grading 4.35g/t Au and 3.08g/t Ag for 417,000oz Au and 295,000oz Ag using a $1,200/oz gold price and a 1.53g/t Au cut-off grade. The resources are based on 25,884m of drilling in 73 diamond drill holes and 236m of underground channel samples.
Over LOM, the Miraflores plant would process 4.33Mt of ore grading an average of 3.29g/t Au and 2.56 g/t Ag for total production of 421,241 oz Au and 210,815 oz Ag.
�We are delighted with the positive FS outcome which is further vindication of the company�s decision to pursue an underground-only development option at Miraflores as a means of reducing capital costs and shrinking the mine footprint. The study delivers robust returns and with this now in hand, we can focus on arranging the r
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