With cash costs estimated to be just US$331 per gold ounce equivalent, the Las Lagunas Gold-Silver Project is expected to deliver a net present value (10%) of US$218 million.
The plant has achieved an intentional steady state operation for the past week of 75% of the designed feed rate of 100 tonnes per hour which will climb to 85% next week.
Feed of high grade refractory tailings from the Pueblo Viejo mine will increase to 100% the following week, ahead of schedule for this stage of the planned ramp-up.
PanTerra is focused on optimising oxygen distribution within the refractory concentrate and improving the levels if oxidation during the three month ramp-up period.
This is expected to be achieved through modifications to the oxygen lances within the Albion oxidation tanks, and to the shape of the agitator blades.
PanTerra is now just a few days from the removal of activated carbon from the CIL tanks, followed by stripping of the adsorbed gold and silver, and pouring of doré bars.
Increase in Working capital
The company is currently in the process of transitioning to a gold and silver producer, and has arranged access to an additional A$8 million in working capital to support the early stages of production.
This makes the project exceptionally robust financially at current gold prices and will allow it to easily handle higher borrowings that form part of the additional working capital it is seeking.
Las Lagunas production
The Las Lagunas project is expected to produce about 69,000 ounces of gold and 630,000 ounces of silver per annum.
Pilot plant testwork demonstrated expected recovery of 435,360 ounces of gold and nearly 4 million ounces of silver over a six and a half year mine life utilising a standard CIL plant together with Xstrata Technology’s Albion oxidation process.
This will generate free cash flow of nearly US$100 million within 18 months, in addition to repaying Macquarie Bank’s $37.5 million project loan.
Another bonus for PanTerra is the company will recover its investment in the project of around $90 million to 30 June 2012 under the profit sharing agreement with the Dominican Republic Government.
The Government will then receive 25% of operating profits, but PanTerra will not pay any income tax on its profits.
At a gold price of around US$1,400 per ounce and a silver price of about US$28 per ounce, Las Lagunas could generate around $300 million in surplus cash over the next six and a half years.
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