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Patagonia shares higher as reaches nameplate production at Lomada

Shares in Patagonia Gold edged higher on Thursday as it revealed it had reached nameplate production at its Lomada mine and development of its flagship Cap-Oeste was advancing apace.
Patagonia shares higher as reaches nameplate production at Lomada

Shares in Patagonia Gold (LON:PGD) edged higher on Thursday as it revealed it had reached nameplate production at its Lomada mine and development of its flagship Cap-Oeste was advancing apace.

The Lomada heap leach operation has now produced an average of 1,807 ounces of gold for the last four months - with nameplate production being 1,750 ounces - with operating efficiencies improving all the time, the firm revealed.

Patagonia is increasing production to 33,000 ounces for 2014 at Lomada, up from the slated 21,000 ounces, and the company said orders have now been placed for the expansion of the mining fleet. These are for two new hauling units and an excavator at a total cost of US$2.1mln, which is included in current fleet financing.

Turning to Cap-Oeste, also in Argentina, the firm said both plant and heap leach pad designs are advancing rapidly for the first stage of the Cap-Oeste oxide project development.

This will see the exploitation of the estimated 200,000-ounce oxide portion of the deposit, ahead of the sulphide part.

Notably, test work has thrown up "excellent" results showing recoveries of more than 97% for gold and silver through a standard flotation and cyanidation of the concentrate.

The total capital expenditure for stage 1 is estimated at US$33.7mln with US$11.7mln required for pre-production capital.

An early timeline for construction at Cap-Oeste was also set out today, kicking off in the third quarter of this year.

The total estimated construction time is around six months with first production earmarked for the first quarter of 2015.

These timelines may vary depending on permits and the delivery of long lead items, the firm acknowledged.

Patagonia shares are 2.56% higher at 10p each.

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