Monday, 25 July 2011

EnviroGold new Chinese substantial shareholder Sinom Investments

EnviroGold (ASX: EVG) has a new substantial shareholder in the Chinese based Sinom Investments, which now holds 29 million shares in Envirogold - or 5.4%.

The interest from Sinom in EnviroGold is no doubt due to the company moving closer to the first gold pour at the Las Lagunas gold project in the Dominican Republic.

Earlier in the month EnviroGold announced at the project that the assembly of the modular oxygen plant is expected to be completed by the end of August.

Construction of the CIL/Albion processing plant is then due to be completed in December 2011, providing the first gold pour in the March quarter of 2012.

Las Lagunas is a gold tailings project wholly owned by EnviroGold.

The project will be reprocessing high grade refractory tailings from the Pueblo Viejo gold mine to produce around 65,000 gold ounces and 600,000 silver ounces annually for 6.5 years.

The Inferred JORC Resource is; 5.137 million tonnes of tailings at 3.8 grams per tonne (g/t) gold and 38.6g/t silver, for 621,000 gold ounces and 6.4 million silver ounces.

The tailings resulted from inefficient gold recovery by Government-owned Pueblo Viejo mine processing refractory ore (1992-1999) without changing installed technology (suitable only for previously mined oxide ore) - stored in purpose-built dam for later processing with appropriate technology.

EnviroGold has provided US$36 million of project equity, with Macquarie Bank (ASX: MQG) advancing US$7.5 million for a 3% gold royalty and providing a US$37.5 million project loan (expected 18 month payback).

The forward gold sales of 30% total project production (126,000 ounces) have been effected at US$1358 per ounce less fees, with anticipated operating costs US$302 per gold ounce equivalent.

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