Greystar releases positive scoping study for Angostura underground operation

Marketwire | May 2, 2011 | 6:08 pm Base Metals Precious Metals Latin America Copper Gold Silver 

Greystar Resources Ltd. (TSX:GSL)(AIM:GSL) is pleased to announce receipt of a positive scoping stage Preliminary Assessment under National Instrument 43-101 (“Scoping Study”) for an underground only operation at its 100%-owned Angostura gold-silver project in northeastern Colombia.

The technical report, entitled “Mineral Resource Estimate and Preliminary Economic Assessment for Underground Mining, Angostura Gold-Silver Project, Santander, Colombia” prepared by Rodrigo Mello, MAusIMM, Carlos Guzman, MAusIMM (NCL Ingeniería y Construcción Ltda.), John Wells, FSAIMM, Giovanny Ortiz, MAusIMM (Greystar) and dated April 25, 2011, is available for viewing under the corporate profile of Greystar at www.sedar.com.

The Scoping Study, which evaluated roasting, bio-oxidation (“BIOX”) and pressure oxidation (“POX”) processing treatments for the production from Angostura underground resources, estimated that 1.9 million ounces of gold, 7.7 million ounces of silver and 228,316 pounds of copper could be produced over a 14-year mine life.

Highlights of the Scoping Study include:

  • All three processing routes produce positive returns with roasting being the most economically beneficial method evaluated
  • Average annual production for the first seven full years of 209,458 gold equivalent (AuEq) ounces, which is comprised of 197,840 ounces of gold and 582,079 ounces of silver
  • Total cash costs of $455 per ounce over the life of mine, net of silver and copper by-product credits
  • Pre-tax internal rate of return (IRR)* of 21.4%
  • Estimated initial capital cost of $301.6 million
  • Pre-tax net present value (NPV)* (5% discount) of $400.2 million
  • Mineable Resource (“In Stope Inferred Mineral Resource”) of 2.4 million ounces of gold in 13.98 million tonnes grading 5.35 grams gold, 29.61 grams silver per tonne and 0.091% copper based on 3 gram gold per tonne cut-off grade
  • Mine life of 14 years at a planned production rate of up to 4,000 tonnes per day
  • Potential Economic Enhancements
    • Mineable Resource Expansion – Study does not include mineral resource estimates defined outside of the stopes, which comprise an additional indicated mineral resource of 1.44 million ounces of gold and an additional inferred mineral resource of 1.0 million ounces of gold, at 3 gram gold per tonne cut-off grade.
    • Mineable Resource Expansion – Optimizing cut-off grade to enhance tonnage and contained ounces of gold/silver.
    • Mineral Resource Expansion – Mineralization remains open at depth with deep drilling program on going.
    • Improved mine design and mineral recovery through on going optimization work
    • Potential to increase production scenario and/or enhance mine life from further exploration and development of known areas of mineralization.

*based on a gold price of $1,170 per ounce and a silver price of $18.25 in the first two years followed by a life of mine price of $1,015 per ounce for gold and $15.85 per ounce for silver.

“The Scoping Study results clearly demonstrate the viability of developing the Angostura deposit as an underground only operation with all three processing routes yielding positive returns,” stated Greystar’s Chief Operating Officer, David Heugh. “The company is excited by the prospects of further enhancing the positive economic potential and the future growth leverage offered through resource expansion and mine optimization.”

Read the full press release here

Image by Greystar Resources Ltd.

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