Wednesday, 24 July 2013

Patagonia Gold: Pre-feasibility will assess viability of combining Cap-Oeste and COSE development

Patagonia Gold (LON:PGD) (TSE:PAT) is to assess the economic viability of combining the development of its two main deposits in Argentina - Cap-Oeste and the COSE - through a pre-feasibility study.
Newfields of Nevada has been contracted to lead the study after work had shown benefits of combining the development, including significant reductions in operational and capital costs.
It came in a progress update on the projects, which said a potential new high grade shoot, which remains open, had been found 250 metres along strike of the main Cap-Oeste ore body.
In May this year a single hole hit 42.50 metres at 2.12 g/t (grams per tonne) gold and 57.41 g/t silver from 374.4m down hole.
At the La Manchuria project, 50km southeast of the El Tranquilo block, where Cap-Oeste and COSE lie, a re-evaluation of the existing resource is underway.
Patagonia said it believes "significant" potential exists to substantially grow the resource through a change of focus to lower grade bulk tonnage from narrow high grade vein previously.
Highlights from the current drilling at the property include an intercept of 3.95 metres at 15.97 grams per tonne gold and 41.60 g/t silver.
Meanwhile, at new prospect La Manchuria South, which lies 15km from La Manchuria, encouraging results have been found from channel samples.
Highlights included 1.10m at 14.46 g/t gold and 234.17 g/t silver plus 1m at a grade of  4.50 g/t gold and 18.50 g/t silver.
Earlier this week, Patagonia revealed its Lomada heap leach operation is now generating US$2mln cash per month, which will be used to fund further development of its flagship projects.
Lomada started production only recently, but with its contribution Patagonia expects to report profitability for the first time by the end of this year.
Across its Cap-Oeste, COSE, La Manchuria and Lomada projects, the firm has delineated a total indicated resource of 1.477 million gold-equivalent ounces.

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