Tarachi Gold awaits delayed Magistral met test results Tarachi Gold awaits delayed Magistral met test results
2022-07-12 12:33 ET - News Release
Mr. Lorne Warner reports
TARACHI PROVIDES CORPORATE AND PROJECT UPDATES
Tarachi Gold Corp. has provided an update on the progress of its Magistral mill and tailings project in Mexico as well as other continuing corporate development initiatives.
Magistral
The final stages of metallurgical test work, to support engineering and design of the planned modifications to the existing Magistral mill, are nearing completion at SGS Lakefield. Results were originally expected by the last week of June, however, due to delays at the laboratory, those results are now scheduled for mid-July with a final report by Ausenco Engineering Canada Inc. anticipated within the next few weeks.
The work currently under way at the lab is specific to the SART (sulphidation, acidification, recycling and thickening) circuit that Tarachi intends to add to the existing facility which is consistent with the development plan outlined in the preliminary economic assessment (see press release dated Dec. 13, 2021). The addition of the SART circuit will not only allow for more efficient recovery of gold from the pregnant leach solution but will also reduce cyanide consumption and generate a high-grade copper concentrate byproduct.
The company anticipates that design and engineering activities will commence upon receipt of the final metallurgy work with Ausenco. Submissions of permit amendments and updates are also pending the final design information and are expected to follow later in the year.
Project financing
Discussions with potential providers of capital to finance Magistral's development and possible offtake partners are continuing with the majority of the interested parties awaiting the results of the final metallurgy work. Those results will determine the final quantity and quality of gold and copper products as well as validate the assumptions used in the PEA.
Tarachi's board and management are confident that a financing package will be assembled in the near term for Magistral. Despite a recent pullback in commodity prices, the company anticipates Magistral will be a high-return, high-margin gold producer with the following metrics from the $1,600 base price PEA:
All-in sustaining cost of $705 per ounce gold (after copper byproduct credits);
After-tax internal rate of return of 85 per cent;;
After-tax payback period of 12 months.
Corporate development initiatives
In addition to plans for deploying some of Magistral's expected future cash flows to the company's prospective land package in Sonora, where 2021 drilling intersected 6.9 grams per tonne over 63.4 metres at the Jabali concession (May 6, 2021, press release), the company is actively searching for additional opportunities in Mexico.
For the past six months, the company's management team has been busy reviewing potential new projects in Mexico to add to the portfolio. The focus has been on projects that may complement existing assets in Durango or Sonora and fit in with the company's plans to develop a project pipeline for growth beyond Magistral's expected production. Management has narrowed down its search to a few key assets and, while there are no guarantee negotiations will conclude successfully, the company is working toward transacting on one or more of those assets in the medium term.
About Tarachi Gold Corp.
Tarachi Gold is a Canadian-listed junior gold exploration company focused on exploring and developing projects in Mexico. Tarachi acquired the Magistral mill and tailings project in Durango, Mexico, in 2021. Magistral includes a 1,000-tonne-per-day mill and access to a tailings deposit with measured and indicated resources of 1.26 million tonnes at a grade of 1.93 g/t Au. The company expects to bring the asset into production in early 2023.
The company is also exploring on its highly prospective mineral concessions in the Sierra Madre gold belt of Sonora, Mexico, in close proximity to Alamos Gold's Mulatos mine and Agnico Eagle's La India mine.
Qualified person
Lorne Warner, PGeo, vice-president, exploration, and director of the company is a qualified person as defined by National Instrument 43-101 and has reviewed and approved the scientific and technical disclosure in this news release.