“We bought this asset from Lundin Mining Corporation TSX:LUN last year. Lundin acquired it from Rio Narcea Gold Mines Ltd, which was one of the main exploration development players in Spain. Lundin acquired Rio Narcea primarily for the Aguablanca Mine in Spain along with a bunch of other gold assets. We acquired Corcoesto from Lundin for $8 million. At that time it had about 300,000 ounces gold measured and indicated. So we commissioned an updated resource calculation by Alan Noble. He had done the original resource calculation at a $350-gold price in 2006. So we started the new resource calculation using a bit more of an up-to-date gold price. Incorporating some additional drill holes we’d done, we came up with about 315,000 ounces in measured and indicated but with an additional 880,000 ounces in inferred, making that $8-million acquisition cost extremely low on a per-ounce basis.
“We kicked off a 12,000-metre drill program in October last year, and we saw some opportunities where there looked like there was open-ended at depth and along east and west strike lengths. We have been drilling since then doing some infill and step-out, and today’s drill hole was a nice 100-metre step-out hole with great gold intercepts. It looks like we can start to build on the known resource now. We’ve got three drills turning there now—this is on our three exploitation sessions (or licences) that are permitted for small scale mining. It was thought by Rio Narcea to be a small scale operation that was going to be heap-leachable. But today, with the size of the resource growing, and also with the metallurgical testing that they’d done in the past that showed heap-leach was only about a 60% recovery, we thought it probably better to look at seeing how much bigger we can get and then look at a conventional milling operation.
“We’ve got an experienced team, in-country, that is native to Spain—that previously worked with Rio Narcea on a project—that knows this project extremely well. A great team. Already they’ve had extensive meetings with local government officials.
“Galicia is an autonomous region. The main town is about 35 kilometres away—with a population of 250,000. We’re close to tide water. We’ve got power and roads right over top of the concession. And on the permitting front we’re not going to be faced with any big opposition, largely due to the fact that this is an agricultural area; it’s got no cathedrals, no heritage on site that we need to worry ourselves about. And Spain is obviously very pro-development right now with the state of the economy and the unemployment rates. So we’re pretty encouraged with this development and think it’s only going to get better.
“The plan is, first, to finish the drill program, but also to complete a new up-to-date resource calculation. And we’re hoping to have that done before the end of the first half of this year. At that point in time, depending on how things develop, we will look to commence a scoping study, then move into feasibility from there. I think this year in going to be pretty busy with a lot of developments on the project.”
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