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Orosur Mining's Fowler "pleased" with the results of Pantanillo Norte preliminary assessment

The payback on the project is predicted to be 45 months, while the total cash cost of mining the gold is predicted to be in the order of US$581 an ounce. Output, meanwhile, is slated to be 97,000 ounces a year.

The capital and operating costs of Orosur Mining’s (LON:OMI) Pantanillo Norte project in Chile will be in the order of US$178 million, according to a Preliminary Economic Assessment of the planned gold mine.

Prepared by AMEC E&C Services, the study ascribes a net present value of US$32.2 million to the development and an internal rate of return of 17 per cent at an 8 per cent discount rate.

The payback on the project is predicted to be 45 months, while the total cash cost of mining the gold is predicted to be in the order of US$581 an ounce. Output, meanwhile, is slated to be 97,000 ounces a year.

The figures were compiled on the basis of a US$1,200 an ounce gold price. 

Chief executive David Fowler said: “We are pleased to announce a preliminary economic assessment for the Pantanillo project in Chile which has been independently prepared by AMEC. 

“This PEA is based on the existing resource at Pantanillo Norte and demonstrates Pantanillo development potential. 

“We believe that further exploration has the potential to significantly enhance the project and a number of initiatives will be pursued through development in an effort to reduce capital expenditure further.”

Pantanillo Norte is part of the wider Pantanillo property, which is located 125 kilometres east of the northern Chilean city of Copiapo in the productive Maricunga gold belt of Chile and covers 11,750 hectares. It has a measured and indicated resource of 1.05 million ounces.

In a separate statement, the group gave a quarterly trading update which it confirmed that production is on target for 57-60,000 ounces of gold equivalent a year.

Orosur produced 11,916 ounces of gold in the three months ended November 30, marginally down on output this time last year of 12,576 ounces.

The cash cost was US$1,007 per ounce, while the cash received was US$1,717. Revenues for the period were $20.99 million, while net income was US$2.57 million. The company’s debts as at November 30 were just over $5 million. 

Fowler said: “Production for 2012 is expected to be on target at 57,500 to 60,000 ounces despite a delay in receiving permits to commence production from Arenal Deeps. 

“This has affected production for the quarter. However, excellent progress is now being made in the development of Arenal Deeps."

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