Andean to develop significant new gold/silver mine in Patagonia
Argentinian officials have said that Australian miner Andean Resources, which has a TSX quote, will be going ahead with a $200 million gold/silver mining operation with construction starting in the second half of 2010.
Posted: Friday , 08 Jan 2010
TSX and ASX listed Australian miner Andean Resources (TSX, ASX: AND) will invest $200 million to bring a new gold/silver mining operation into production in Argentina's mining friendly province of Santa Cruz (which encompasses Patagonia). The province is becoming potentially a major gold producer with AngloGold's Cerro Vanguardia operation being expanded and moving underground, Hochschild's San Jose silver/gold project also expanded recently and a number of important potential new mines being investigated by companies like Exeter Resource, Minera IRL and Mariana/IAMGOLD among others.
The news was broken by Reuters, which quoted Argentina's Planning Ministry as saying "Annual production is expected to reach 300,000 ounces of gold and 3 million of silver" following a meeting between Andean's President, Wayne Hubert and Argentinuian government officials. Work on the new mine - Cerro Negro - is due to commence in the second half of this year.
Cerro Negro is an advanced stage high grade gold exploration project on the low level Patagonian plains, not far from Hochschild's San Jose operation. Andean reckons project infrastructure is excellent with access to the property via 54 km of bitumen and 80 km of gravel roads from the nearest provincial town of Las Heras (110km NE) which provides the local on-shore oil fields located in Santa Cruz with basic manufacturing and service facilities. The main regional centre of Comodoro Rivadavia (pop. 140,000) has port and airport facilities and is situated 160km north east of Las Heras.
Within the Cerro Negro project boundary (comprising 25,000 hectares) are ten currently identified prospect areas with manifestations of epithermal gold mineralization. Only two of these, the Vein Zone and the Eureka West prospects, have been subject to systematic drilling by Andean. Within the overall Cerro Negro project, there are at least five zones of known epithermal mineralization.
The latest full resource figures give Measured and Indicated at 3.6 million tonnes at 15.24 g/t gold and 179 g/t silver for a contained 1.77 million ounces of gold and 20.8 million ounces of silver plus an additional inferred resource of 962,000 tonnes at 8.91 g/t gold and 79 g/t silver for a further 276,000 ounces of gold and 2.4 million ounces of silver, although resources on the Eureka vein have been significantly upgraded since these resource figures were published. The company already talks of more than 2.5 million ounces of gold and as exploration continues this is likely to be extended further. There has been substantial drilling since these figures were issued, for example, including the outlining of the new high grade Bajo Negro vein system with a new resource estimate expected in the first quarter of the current year. A Bankable Feasibility Study has been in progress and presumably the Argentinian announcement is based on the preliminary results of this, although the study is not due for completion until June, having been extended for the inclusion of the Baja Negro vein which involved a new mining plan and plant location.