The 100% owned Las Lagunas project involves the reprocessing of high grade gold/silver refractory tailings from the Pueblo Viejo mine located approximately 105km to the north of Santo Domingo, the capital of the Dominican Republic in the Caribbean.
The tailings were derived from open pit operations at the mine between 1992 and 1999, and are impounded in a purpose-built valley-catchment dam. The Pueblo Viejo mine has recently been redeveloped by Barrick Gold Corp at a cost in excess of US$3.5 billion.
The tailings were originally generated through the processing of refractory ores by Rosario Dominicana S.A, a State owned mining corporation. The refractory nature and metallurgical complexity of the ore resulted in poor recoveries (<30%) of gold and silver when treated by the conventional carbon-in-leach/cyanidation process plant in place for oxide ore that had been mined earlier. This resulted in significant tonnages of refractory tailings with +3.5g/t gold being deposited in the Las Lagunas dam.
PanTerra Gold's subsidiary, EnviroGold (Las Lagunas) Limited, was successful in an international tender and signed a Contract with the Dominican State in 2004 granting it the right to reprocess the tailings under a profit sharing arrangement with the Government.
Under this arrangement, EnviroGold (Las Lagunas) Limited is exempted from income tax in the Dominican Republic, but will share 25% of its operating profit with the Government from 2016, after the Company has recovered approximately US$70 million of direct investment for process plant construction.
The project involves the reclamation of the existing tailings by dredging, ultrafine grinding, concentration of gold bearing sulphides through flotation followed by sulphide oxidation using the Albion process, prior to extraction of gold and silver utilising standard carbon-in-leach cyanidation.
Extensive feasibility studies were carried out in 2005-2007 followed by detailed engineering of the Albion/CIL plant which was designed to process 800,000tpa of tailings for 6.5 years. The project had a JORC Indicated Resource of 5.137mt of ore grading 3.8g/t gold and 38.6g/t silver prior to commencement of mining in mid-2012.
Since signing the agreement with the Dominican State, the PanTerra Gold Group has spent approximately US$100 million on the project, including resource definition, metallurgical test work, pilot plant studies, feasibility studies, engineering, site works, procurement of mechanical and electrical equipment, plant construction, project management, administration, holding costs, and acquisition of a minority interest in the project.
The project was funded by a US$37.5 million loan from Macquarie Bank Limited, and facilities totalling US$7.5 million from BanReservas (Dominican Republic Government-owned Bank). Macquarie Bank also paid the PanTerra Gold Group US$7.5 million to purchase a 3% gold royalty for the life of the project, which was advanced to the development.
Since plant construction was completed in mid-2012, the project has suffered from deficiencies in design and equipment supplied for the Albion oxidation circuit and as a result the process plant has not yet reached originally anticipated gold and silver recoveries. The technology providers have recently advised the requirement to increase retention time in the Albion circuit by installing additional tankage, in order to achieve maximum recoveries. Based on pilot plant test work, performance to date, and recently advised plant modifications being installed by mid-2014, production in 2014 has been budgeted at 45,000oz Au and 372,000oz Ag.
With the issues encountered in the first-off use of the Albion oxidation process for extraction of precious metals from refractory ores having been resolved, production should be increased to approximatley 58,000oz gold and 480,000oz silver in 2015.
The Company's aim is to extend the life of the Las Lagunas project beyond March 2019 by sourcing feed from local or foreign projects, and to pursue investment opportunities where it can apply IP gained from the Dominican project.
Photographs updated September 2012
The information in this document that relates to Indicated Resources at the Las Lagunas project is based on information compiled by Rick Adams, BSc MAusIMM MAIG, Director Geological Resource Services for Cube Consulting, who is a consultant to PanTerra Gold Limited. Mr Adams is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ?Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves?. Mr Adams consents to the inclusion in the document of the matters based on information in the form and context in which it appears.
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated to comply with the JORC 2012 on the basis that the information has not materially changed since it was last reported.