Companies like Eagle Mountain find near-surface deposits offset dismal markets
by Greg Klein
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Gold at surface—it’s an explorer’s dream and the attraction for several companies working in Guyana. Notwithstanding thick jungles, heavy rain and limited infrastructure, the country inspires optimism among juniors working to overcome pessimistic capital markets.
And it’s here that one company found not only a project but also an in situ team that might transform the explorer into a producer. To do so, Eagle Mountain Gold TSXV:Z has set an ambitious timeline with hopes of bringing 2014 production to its eponymous project in central Guyana.
Certainly president/CEO/director Ioannis (Yannis) Tsitos sounds confident. “First of all, we’ve got a board and management team that has put projects into production. Secondly, we’re looking at a robust gold price and my view and all the macro-economic analysis suggest this will continue. In terms of operating in Guyana, we can run this with decent costs. I don’t see why we should follow the formula of building up a company just to sell it.”
The company holds 50% of the project, with an option to pick up another 45% from IAMGOLD TSX:IMG for $1 million in cash and/or shares by April. The Guyanese government holds the remainder.
This year’s schedule looks busy, with more drilling to build the resource, work on the environmental impact assessment and a PEA, which is slated for Q2. Tsitos then plans to skip the pre-feasibility stage to reach full feas in 2014. Should economics, permitting and financing fall into place, open-pit gold production could begin the same year, he says.
Ambitious as it is, the schedule’s cost-effective, Tsitos maintains. “This plan calls for minimum dilution because the capex would be smaller. We’d first focus on the easiest parts of the deposits, which are the oxide parts, effectively mining the top 25 metres over a very extensive area. Later we’d expand into mining hard rock with a bigger mill and power requirement. Our approach is a phased development, therefore the timeline is aggressive but viable.” He foresees the mine expanding to several open pits feeding a central processing facility.
Last November’s resource update for the Zion and Kilroy zones uses a cutoff of 0.5 grams per tonne gold, showing:
- an indicated category of 3.92 million tonnes averaging 1.49 g/t for 188,000 gold ounces
- an inferred category of 20.63 million tonnes averaging 1.19 g/t for 792,000 gold ounces.
The deposit remains open in three lateral directions and at depth, the technical report states. Mineralization so far covers just 300 hectares of the 5,050-hectare property.
To offer perspective on the strategy of phased development, the resource gives separate numbers for oxidized rock, or saprolite, and for non-oxidized “fresh” or hard rock underneath:
- the indicated category includes 74,000 gold ounces in saprolite material and 114,000 ounces in fresh material
- the inferred category includes 306,000 gold ounces in saprolite material and 486,000 ounces in fresh material.
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