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UPDATE - Patagonia Gold updates resource on El Tranquilo projects

Published: 13:19 30 Mar 2015 BST

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Patagonia Gold (LON:PGD) has updated the resource estimate at its two main projects on the El Tranquilo block in Argentina.

Earlier this month, Patagonia said it needed to find more oxide ore to make the Cap-Oeste project viable.

Oxide resources at the project now comprise 146,000 ounces of gold and 237,000 gold equivalent according to the update, which was carried out by CUBE Consulting.

Indicated gold equivalent ounces at Cap-Oeste rose by 98,000 to 1,295,000, while there is high grade mineralisation containing 75,000 ounces of gold and 3,533,000 ounces of silver that would be amenable to cyanide leaching.

At nearby COSE, the indicated gold equivalent ounces rose by 19,165 to 83,000.

Patagonia said the underground mine design at COSE will be tailored to recover the maximum possible of contained metal.

In total, indicated and inferred resources for Cap-Oeste, COSE, Manchuria and Lomada rose by 213,183 ounces to 2,089,183 ounces of gold equivalent.

As well as exploration, Patagonia said it would carry out more test work at COSE to evaluate the possibility using a gravity tails product for inclusion with the Cap-Oeste oxide ore.

Broker Cantor said with the “COSE” style mineralised section at Cap-Oeste cyanide leachable gold equivalent is around 406,000 ounces.

The company expects the optimisation work and project redesign to take around six months, so this next six months should see important news flow from Cap-Oeste and the existing mine at Lomada, where the focus is on maximising cash flow.

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