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Austral set to restart Casposo gold-silver mine on positive mine plan

Austral Gold Ltd. is set to restart full operations at its Casposo gold-silver project in Argentina following positive results of an updated mineral resource and ore reserve estimate, it said Sept. 27.

The proven and probable ore reserves, as of June 30, stood at 972,000 tonnes at 2.53 g/t of gold and 231 g/t of silver containing about 79,000 ounces of gold and 7.2 million ounces of silver.

Measured and indicated mineral resources, including ore reserves, totaled 1.4 million tonnes at 3.0 g/t of gold and 238 g/t of silver containing about 136,500 ounces gold and 10.8 million ounces silver.

The life of mine plan for Casposo estimates an after-tax net present value, discounted at 5%, of US$37 million.

The average annual gold production is estimated at 21,000 ounces of gold and 1.7 million ounces of silver during a four-year mine life.

Life of mine capital totals US$41.7 million, including reclamation and closure costs, and operations are proposed to be funded from Austral's existing and other internal cash resources.

Average production is expected to be 800 tonnes per day from underground, about 300,000 tonnes per year, at all-in sustaining costs of US$1,038 per gold equivalent ounce.

According to Austral CEO Stabro Kasaneva, "the plan supports the viability of moving to small scale underground mining methods and optimization of the process plant."

Austral entered an agreement in March to acquire the Casposo project from Troy Resources Ltd. through a staged divestment process.