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PanTerra Gold (ASX: PGI), formally known as EnviroGold, is a near term gold producer at its Las Lagunas project in the Dominican Republic with construction scheduled for completion in December 2011. The project has an expected life of seven years at an annual production rate of 65,000 ounces of gold and 600,000 ounces of silver.
PanTerra Gold is also active in Ecuador with the advanced Azuay Gold Mining project and the San Gerardo Gold Mining prospect. At the Azuay project, construction is targeted to commence in mid 2012.
EnviroGold buoyed by construction progress at Las Lagunas gold silver project
EnviroGold (ASX: EVG) is progressing construction on its Las Lagunas gold/silver project in the Dominican Republic with the key modular oxygen plant having been shipped by the supplier ahead of schedule.
The project remains on schedule for early 2012 start-up of gold and silver production and is set to benefit from high gold and silver prices.
After experiencing substantial delays to the implementation of the project caused by third parties, Envirogold is now bullish about Las Lagunas.
The company is planning gold and silver production of 65,000 ounces gold and 600,000 ounces silver per year in January 2012 at significantly higher metal prices than originally budgeted.
Envirogold is constructing an Albion/CIL Plant for this purpose and has reported that it will reprocess 5.137 million tonnes of refractory tailings from the Pueblo Viejo mine grading 3.8 g/t gold and 38.6 g/t silver (JORC Resource of 621,000 ounces of gold and 6,400,000 ounces of silver) with an estimated production cost of US$313 per ounce of gold.
Spot gold last traded at $1546.60 an ounce after setting a new all-time high of $1,577.40. Spot Silver last traded at $43.99 an ounce.
The company said that if current prices prevail for the next two to three years, annual after tax profits from the first two years of production should be in the order of US$45 million to US$48 million.
In addition, Macquarie Bank’s US$37.5 million project loan would be repaid within 18 months of commissioning. Macquarie Bank is a substantial shareholder of EnviroGold with 5.95%.
The Las Lagunas project has an expected life of approximately seven years at and Envirogold has arranged equity and debt financing of US$81,000,000 for the project.
Recently, EnviroGold flagged an intention for a dual listing on the Toronto Stock Exchange in two to three months. The proposed listing is expected to coincide with a placement of around 7% of the company’s shares (30 to 40 million) to Canadian investors to create initial liquidity in the local market.
Companies listed on the Toronto Stock Exchange with projects in Latin America tend to trade at higher valuations given the understanding of political issues, geological potential, and the widespread activity of Canadian mining companies in Latin America.
EnviroGold has been under the radar in Australia but this looks likely to change as North American investors become aware of its valuation increasing Las Lagunas project as it moves toward production.
