Continental Gold reviews highlights from 2014 2015-03-06 2
Continental Gold reviews highlights from 2014
2015-03-06 20:07 ET - News Release
Mr. Paul Begin reports
CONTINENTAL GOLD REPORTS ON 2014 ACTIVITIES
Continental Gold Ltd. has released highlights for the year ended Dec. 31, 2014, for the Buritica project in Antioquia, Colombia.
Highlights and significant events for 2014:
- On May 13, 2014, the company announced an updated mineral resource estimate for the Buritica project, prepared in accordance with NI 43-101. This estimate covers the Yaragua and Veta Sur vein systems, with a combined measured mineral resource of 990,000 tonnes of mineralized material containing 650,000 ounces of gold grading 20.4 grams per tonne gold, 1.54 million ounces of silver grading 48 g/t silver and 15.0 million pounds of zinc grading 0.7 per cent zinc, and a combined indicated mineral resource of 7.41 million tonnes of mineralized material containing 2.15 million ounces of gold grading 9.0 g/t gold, 6.89 million ounces of silver grading 29 g/t silver and 75.1 million pounds of zinc grading 0.5 per cent zinc. The combined inferred mineral resource is 16.7 million tonnes of mineralized material containing 4.2 million ounces grading 7.8 g/t gold, 13.1 million ounces of silver grading 24 g/t silver and 111 million pounds of zinc grading 0.3 per cent zinc.
- On Nov. 17, 2014, the company released an independent preliminary economic assessment for the Buritica project, set out in the company's technical report entitled, "Buritica gold project, NI 43-101 technical report, preliminary economic assessment, Antioquia, Colombia," dated Dec. 22, 2014, with an effective date of Nov. 17, 2014. The PEA was completed, utilizing the 2014 mineral resource estimate, and was led by M3 Engineering and Technology Corp. of Tucson, Ariz., with contributions from other independent consultants, including Chilean-based NCL Ltda., which was responsible for the development of the underground mine plan for the project. Results included:
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- An 18-year mine life based on 20,055,000 tonnes grading 7.80 g/t gold and 19.35 g/t silver, resulting in 4,777,000 ounces of recovered gold and 7,088,000 ounces of recovered silver. Throughput will begin at a rate of 2,000 tonnes per day and will ramp up to 3,500 tpd in the third year.
- The first five years of production will average approximately 314,000 ounces of gold and 507,000 ounces of silver annually, at a total cash cost of $389 per ounce of gold. Life-of-mine production will average 265,000 ounces of gold and 394,000 ounces of silver annually, at a total cash cost of $431 per ounce of gold, placing Buritica in the lowest-cash-cost quartile globally.
- The after-tax net present value at a 5-per-cent discount amounts to $1.08-billion.
- The after-tax internal rate of return is 31.5 per cent on an initial capital cost of $390.3-million with a payback of 2.8 years.
- Longitudinal bench and fill (long hole) has been selected as the mining method, as both vein systems are steeply dipping and the host rock is competent. Drifts will measure four by four metres, and the benches will be eight metres in height.
- Mining dilution of 58 per cent was calculated under the assumption that all material located outside the hard boundaries of modelled veins is assigned a value of zero g/t gold and silver. However, based on initial channel sampling results announced on Oct. 28, 2014, for the Veta Sur deposit, including 30 metres (true horizontal width) of 9.6 g/t gold and 47 g/t silver, significant potential exists to improve the dilution grade assumption in future economic studies.
All cash cost information is net of silver byproduct credits. The PEA is preliminary in nature and includes inferred mineral resources that are considered to be too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Further, mineral resources that are not mineral reserves do not have demonstrated economic viability.
Exploration
Exploration activities during the year consisted of topographic and geological mapping, geochemical soil surveys and other surface sampling, underground mapping and channel sampling, and diamond drilling at the Yaragua, Veta Sur and Laurel vein systems. Underground drilling from the three access tunnels also commenced during the year with the goal of converting inferred ounces into the measured and indicated categories, as well as increasing the overall mineral resource. Drilling extended several vein sets and identified new veins outside of the current mineral resource.
Drill results in the Yaragua vein system included:
- BUUY191, which intersected 36.48 metres of 9.4 g/t gold and 43 g/t silver, including 1.8 metres of 34.8 g/t gold and 61 g/t silver plus 2.6 metres of 36.3 g/t gold and 47 g/t silver;
- BUUY171, which intersected 1.35 metres of 142.9 g/t gold and 15 g/t silver;
- BUUY210, which intersected 6.9 metres of 97.8 g/t gold and 238 g/t silver;
- BUUY226, which intersected 2.1 metres of 100.7 g/t gold and 53 g/t silver;
- BUUY232, which intersected 2.15 metres of 161.2 g/t gold and 14 g/t silver;
- BUUY222, which intersected 1.35 metres of 190.5 g/t gold and 95 g/t silver;
- BUUY253, which intersected 3.95 metres of 50.2 g/t gold and 26 g/t silver.
Drill results in the Veta Sur vein system included:
- BUSY355, which intersected 0.7 metre of 26.8 g/t gold and 118 g/t silver and 0.5 metre of 44.2 g/t gold and 23 g/t silver;
- BUUY194, which intersected 4.15 metres of 21.7 g/t gold and 19 g/t silver, including 0.5 metre of 158.5 g/t gold and 62 g/t silver;
- BUUY202, which intersected 9.85 metres of 34.4 g/t gold and 111 g/t silver, including 1.13 metres of 110.7 g/t gold and 236 g/t silver plus 1.0 metre of 91.3 g/t gold and 261 g/t silver;
- BUSY363, which intersected 4.0 metres of 218.7 g/t gold and 25 g/t silver;
- BUUY270, which intersected 2.2 metres of 2,615.4 g/t gold and 388 g/t silver;
- BUUY208, which intersected 7.45 metres of 40 g/t gold and 170 g/t silver, including 2.85 metres of 99.8 g/t gold and 406 g/t silver;
- BUUY280, which intersected 1.05 metres of 695.3 g/t gold and 140 g/t silver.
Drill results in the Laurel vein system included:
- BUSY361D01, which intersected 8.3 metres of 6.1 g/t gold and 23 g/t silver, including 1.2 metres of 24 g/t gold and 36 g/t silver;
- BUUY258, which intersected 1.45 metres of 84 g/t gold and seven g/t silver.
Channel sampling in the new Yaragua ramp extended high grades in the Murcielagos South vein family to higher elevations (1,520 metres), with significant intervals including 0.5 metre of 24.7 g/t gold, 215 g/t silver and 8.4 per cent zinc and 1.0 metre of 10.9 g/t gold, 90 g/t silver and 3.7 per cent zinc.
The company also initiated a crosscutting program in both the Veta Sur and Yaragua vein systems with the aim of determining the appropriate precious metal grades for calculating dilution between certain veins in future economic studies. Results were encouraging, including a laterally continuous, very-high-grade zone comprising 3.15 metres (true horizontal width) of 59.7 g/t gold and 139 g/t silver, along 85 metres in the Veta Sur vein system.
Predevelopment
The company completed underground development of the access tunnels in the Higabra Valley and the Veta Sur and Yaragua ramps, meeting the initial goal of utilizing these access tunnels to drill underground.
The company announced the signing of formalization subcontracts with eight small-scale mining associations in 2014, paving the way for the implementation of legal and responsible small-scale mining operations at the Buritica project. Predevelopment activities began at the respective sites shortly thereafter.
During the year, the company continued to work with Corantioquia, the autonomous regional corporation responsible for issuing and controlling environmental permits in Antioquia, to complete the modification process for the environmental impact assessment (submitted on Dec. 23, 2013), which represents the final major permitting step for the Buritica project.
The scientific and technical information contained in this press release has been reviewed and approved by Mauricio Castaneda, vice-president, exploration, of the company, who is a qualified person within the meaning of NI 43-101.
For additional technical information on the Buritica project, please refer to the technical report, available on SEDAR, on the OTCQX and on the company website. Additional details on the rest of Continental's suite of gold exploration properties are also available at the company website.
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