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Minera pushes ahead with Peru plans

Posted by: Admin | Posted on: July 21st, 2014 | 0 Comments

Minera Gold Ltd has agreed to acquire the San Santiago gold-copper processing plant in southern Peru, which it currently leases, and expects to begin gold shipments this week.

The Australian-listed company said it would pay US$4.5 million cash and assume US$1 million of existing debt in exchange for the gold-copper mill and leases of more than 9,000ha of surrounding mining rights.

Silverstream SEZC, which has an existing gold streaming agreement with Minera to fund expansion of the Torrecillas gold project in Peru, will fund US$3 million through a second streaming deal. It will be delivered equivalent to 100% of the silver produced from the copper circuits at San Santiago for a period of 15 years, and will be entitled to purchase between 4,000-7,500oz/month at US$6/oz.

The balance of the acquisition is being negotiated with commodity traders and debt financiers, Minera said.

Minera is targeting full ownership by late-September 2014. By owning the entire plant instead of leasing the carbon-in-pulp gold processing circuit, it expects to save US$1 million/y, reducing all-in cash costs for nearby Torrecillas from US$780/oz to US$700/oz.

Ore from Torrecillas is being used in the current commissioning of the refurbished San Santiago plant, from which Minera hopes to achieve an annualised gold production rate of at least 18,000oz by year’s end. Minera said dry commissioning of the crushing and grinding circuits was running “as planned” ahead of first gold shipments.

“The upside benefits, risk mitigation and diversification from owning and optimising the high-grade vein copper-gold-silver mining from the acquired mining rights to a very large tract of prospective and productive acreage surrounding the plant can’t be ignored,” managing director Ashley Pattison said.

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