Paramount Gold and Silver can sharply boost mineable material at San MiguelWednesday, November 6th, 2013
Paramount Gold and Silver Corp. (NYSE MKT:PZG)(TSE:PZG) says it can increase the amount of mineable material at its San Miguel project in Mexico significantly, after proving that precious metals at two of the open pit deposits can be recovered economically using inexpensive heap leach technologies.
The company Wednesday unveiled the results of new metallurgical tests that looked at mid-to-lower grade, open pit material that was not included in the preliminary economic assessment from earlier this year.
This is because the PEA determined that the most efficient recovery process for the high grade gold and silver material at the project is a mill circuit, followed by rock cyanide leach and a Merrill Crowe recovery plant, with the higher cost milling scenario requiring a higher cut-off grade that excluded mid-to-lower grade material. As a result, the report did not include a large portion of the project’s global resource, particularly from the bulk-mineable San Francisco and San Antonio deposits.
After commissioning a lab to conduct additional metallurgical tests to rectify the issue, a total of 24 cyanide leach bottle roll tests were done on six samples from near-surface oxide and material that can be extracted through open pit mining.
Gold recoveries were seen at up to 83.8% from a 1/4 inch crush size after 96 hours of cyanide leach time for San Francisco — a gold deposit with lower silver grades — while silver recoveries were seen at up to 50.4% under the same conditions for the silver-rich San Antonio deposit, according to Paramount’s statement.
“Step by step, we are making major improvements to the economics of San Miguel, a project that is already robust at current metal prices,” said CEO Chris Crupi in the release.
“We are rapidly approaching the point at which we can expect to realize value from our investment in San Miguel, given better precious metal prices. Fortunately, we are in no need of funds and we can continue to improve the project while we wait for markets to improve.”
Indeed, the company said the results announced today would not only increase the mineable material through a viable heap leach process at these two deposits, but also reduce the ore-to-waste strip ratios and boost the total contained ounces within the mine plan.
The current mine plan, as per the preliminary economic study, includes a total of 18.5 million tonnes containing 859,000 ounces of gold and 62 million ounces of silver. The San Francisco and San Antonio pits make up just 4.2 million tonnes of this.
Paramount said that resources indicate that at a lower cut-off grade, which can be expected through a heap leach program, tonnes from these deposits could rise almost 10 times to nearly 42 million tonnes, or about 396,000 ounces of gold and 32 million ounces of silver.
As a next step, the company is now selecting a larger set of representative samples for a more comprehensive test to confirm the feasibility of the heap leach scenario, and then update the curret preliminary economic assessment.
The U.S.-based gold developer also holds the advanced stage Sleeper project in Nevada, where a fully funded exploration program is now underway. San Miguel in northern Mexico stretches over 140,000 hectares, making Paramount the largest claim holder in this precious metals mining camp.
Shares were unchanged at $1.25 in Toronto on Wednesday afternoon.