11th Nov 2014 09:46
LONDON (Alliance News) - Patagonia Gold PLC Tuesday said production from its Lomada mine in Argentina increased for the third month in a row and reported significantly lower cash costs during October.
In October, the Lomada mine produced 3,900 ounces of gold, the third straight month of increased production with the months of August through to October contributing 10,495 ounces of gold in total.
For the year to date, production from Lomada stands at 24,186 ounces of gold and the company expects to achieve its revised annual production target of 26,900 ounces of gold by the end of November, down from its original target of 33,000 ounces, it said in a statement.
The average grade has also increased to above 3 grammes of gold per tonne as mining focuses on the central high grade section of the pit.
The increase in production and grade has also been complemented by a lower cash cost during the month. The all in cash cost in October was USD699 per ounce, compared to USD826 per ounce, including USD122 per ounce for plant depreciation, for the six months ended September.
The Cap-Oeste heap leach project, also in Argentina, is in the last stages of test work on the oxide material from the prospect, with preliminary results confirming previously estimated recoveries by recovering 80% of the gold and 40% of the silver over an 18 day period.
The company reiterated its annual production rate target for the project to be between 40,000 ounces and 50,000 ounces of gold equivalent. Patagonia also expects to understand the capital requirements for the project by the end of the first quarter in 2015, expected to be in the range of USD30 million to USD35 million.
The pre-feasibility study for its COSE project, also in Argentina, is expected to be completed within the next eight weeks and a small plant is being designed for the project to produce high grade gold-silver Doré, said Patagonia.
A full mining permit will be applied for once the final pre-feasibility and updated environmental impact statement are completed and financing options for the construction of the mine are currently being evaluated, it added.
Patagonia shares were down 1.1% to 4.70 pence per share Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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