Flagship Minerals managing director Paul Lock said: “Pantanillo presents a compelling opportunity, the project is de-risked on a number of levels, including geology, geography, jurisdiction, metallurgy and permitting precedents.”
Management is looking at a reduced cut-off grade from 0.3g/t gold to between 0.15 to 0.3g/t to increase the mineral resource. Additionally, it says several stunning drill hits at site were not included in the 2010 pit shell.
Thick intersections that graded more than 1g/t gold include 161m at 1.23g/t from 60m, 142m going 1.13g/t from 310m and an 82m hit of 1.13g/t.
A further interval stretching 116m at 0.85g/t from 312m added to the impressive series of hits.
Flagship revealed last week that previous metallurgical testwork undertaken on oxide material at Pantanillo identified a potential low-cost operation with significant recoveries of up to 85.5 per cent gold.
Management says previous column leach testwork on the oxide material, using cyanide on crushed material, recovered up to 85.5 per cent gold, with 80 per cent recoveries after 25 days.
It says the rapid and elevated level of recoveries on Pantanillo’s oxide material is highly promising, as the average oxide recoveries among its peers typically range from 50 to 70 per cent.
Encouragingly, the company says about 98 per cent of the resource at Pantanillo is amenable to heap leach processing.
The company believes the metallurgical results warrant further testing of coarser particle size material before it begins a pilot testwork program. The program will oversee confirmatory heap leach testwork for input into the project’s future financial modelling and ongoing optimisation testing.
It will also focus on assessing particle size against gold recovery and leaching time as well as the cost benefits of dump-leaching.
The testwork will provide vital information to conduct trade-off studies.
The company’s processing options include a low-capital, low-cost heap leaching operation that removes the need for crushing equipment and the resulting crushing and processing operations. The simpler process places ore on a heap leach pad and irrigates it with a leaching solution to dissolve the gold for recovery.
Heap leaching is considered more cost-effective from a capital investment basis than a traditional crushing and milling process, as it does not require a tailings dam and benefits from lower energy and water consumption. However, the process usually results in a lower gold recovery rate.
Due to the difference in initial and ongoing costs, Flagship needs to assess the trade-off between the two different pathways before deciding on the best option.
Many of the world’s largest gold players operate heap leach operations due to their simplicity and high margins, even when the grade of gold is between 0.5–1 per cent and, in some instances, below 0.5g/t gold.
Barrick Gold’s Veladero operation, with a 0.68g/t gold-equivalent grade, Kinross Gold’s Fort Knox deposit at 0.34g/t gold-equivalent and Newmont Corporation’s Cripple Creek grading 0.45g/t gold-equivalent utilise heap leaching to extract gold.
Flagship recently inked a final five-year option over Pantanillo with a local Chilean entity. It paid a US$100,000 (A$155,000) deposit during the due diligence period. After satisfying itself of the project’s merits, Flagship paid an additional US$100,000 to the vendor, which will be followed by four further annual payments totalling US$1.4M.
Flagship can buy Pantanillo outright for a final US$11M payment on the fifth anniversary of the deal. There are no minimum spend or drill requirements.
The Maricunga region hosts more than 65M ounces of gold and is home to several mammoth gold deposits. Pantanillo, itself, is near a series of monster gold plays, each with more than 10M-ounce resources.
If its drilling program proves successful, Flagship may be on a path to unveiling its own little monster in the future.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
