Gold explorer Exeter resource has announced its latest resource estimate for its Caspiche gold/silver/copper project in the Maricunga region of Chile and the figures are big by any standards. The resource is low grade, but bulk mineable and drilling to date has shown a NI 43-101 compliant inferred resource of 1,117 million tonnes grading 0.55 g/tonne gold, 3.81 g/tonne silver and 0.22% copper. As the company points out this makes the in-situ metals amounts of 19.6 million ounces of gold, 137 million ounces of silver and 4.84 billion pounds of copper which the company relates as 33.7 million gold equivalent ounces using assumed metal prices of US$800/ounce for gold, US$12/oz for silver and US$2/pound for Copper.
Talking to Mineweb in Denver, Exeter chairman Yale Simpson said he reckoned this to be one of the biggest low grade gold deposits found in recent years and expressed some surprise that it had been down to Exeter to uncover it given prior drilling close by by two majors, and the location of the deposit almost midway between Barrick’s Cerro Casale gold deposit and Kinross’s Refugio mine
In a statement Simpson says “This updated resource estimate places Caspiche firmly among the world’s largest gold-copper discoveries in recent years and clearly supports our decision to aggressively drill the property, despite the global economic decline.
“We expect that the very substantial copper and silver credits will be extremely important, and will markedly impact the potential viability of Caspiche. Specifically, using metal prices of US$2.00/pound copper, US$800/ounce gold and US$12/ounce silver, the 4.84 billion pounds of copper and 137 million ounces of silver are equivalent to 12.1 and 2.0 million ounces of gold respectively.”
“Our recent drilling has defined what appears to be a coherent higher grade central zone associated with a definable early stage diorite intrusion. We expect this zone will be important in developing various mining and economic models for the project.
But Exeter is still drilling the deposit to expand the resource estimate further to the southeast and at depth and to upgrade the higher grade central zone to the indicated category,
“Exeter intends to enhance the value of Caspiche” says Simpson “by continuing to de-risk the project through ongoing exploration, metallurgy, engineering, water and environmental studies. These studies will continue through the next 12 months and will lead to a conceptual development study. A timeline for the release of that study is presently being formulated. The project budget for the next 12 months is C$14 million.”
Caspiche is way too big a deposit for Exeter to go it alone. Not only is it very large and low grade requiring huge scale operations to generate profit through economy of scale, it is also at altitude which creates not insuperable problems of its own. Mine development would probably be beyond even a mid-sized gold miner’s capability of raising finance so Exeter will be looking to other majors, or perhaps the Chinese, to help develop this huge orebody. But meantime it also has its high grade Cerro Moro deposit in Argentina which could be brought to production relatively quickly and at relatively low cost.