Goldcorp gets green light to double-up Cerro Negro gold production

Authorities in Argentina have approved Goldcorp’s (TSX: G) request to increase the scope of its Cerro Negro project in Santa Cruz state.

Goldcorp’s Cerro Negro project is now set to start up as a 4,000 tonne per day operation pumping out 550,000 ounces gold a year, more than double the output the major gold miner originally planned.

The approval is fundamental to Goldcorp’s future as its five year vision for growth – 60 percent slated to come from Cerro Negro – was dependent on the expanded gold mine.

Now if all goes as forecast in about two years Goldcorp’s total gold production will climb well beyond three million ounces gold a year when Cerro Negro comes online.

Construction at Cerro Negro is already underway as Goldcorp, based on earlier approvals, had started to develop underground workings in the Eureka vein that would have supported an 1,850 tonne per day underground mining operation. But with the expanded permit Goldcorp can bring two more veins, Mariana Central and Norte, into the production fold.

Further construction to accommodate and develop the two new veins would start “immediately,” Goldcorp stated.

That construction, when it’s all finished, is expected to cost Goldcorp $750 million, according to a 2011 feasibility study. The proposal is for a 12-year mine that would produce 340,000 ounces gold a year, life of mine, at a $290 per ounce gold cash cost.

The first five years of mining, however, look especially good. Goldcorp estimates cash costs at $200 per ounce gold with production at the higher rate of 550,000 ounce gold a year.

In terms of reserves Cerro Negro holds 13 million tonnes @ 10.19 g/t gold for 4.26 million ounces gold found primarily in high-grade, near surface veins.

What is now a core asset for Goldcorp, it is worth remembering, was only a little over a year ago caught in the middle of a quick but multi-billion dollar bidding war. Goldcorp swooped in on Eldorado Gold, outbidding it with a $3.6 billion offer for Cerro Negro, which was then owned by Andean Resources. – Mineweb

Tags: Cerro Negro gold production, Gold, Gold mining, Gold mining companies, Gold mining industry, Goldcorp

Posted by admin on Dec 17 2011. Filed under Gold mining. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry