EnviroGold Limited (EVG:ASX) - Continues its Run With More Upside to be Realized
ENVIROGOLD TO COMMENCE PREFEASIBILITY STUDY OF 100,000 OZ AU PER YEAR GOLD PROJECT IN VENEZUELA
Mr Brian Johnson, Executive Chairman of EnviroGold Limited (ASX Code ”EVG”) advises that he has just completed a visit to Caracas, Venezuela to meet with senior officials from the Ministry of Industry and Mining, and Government owned mining company CVG Minerven.
The outcome of the meetings is that EnviroGold will commence sampling and metallurgical testwork of substantial refractory gold tailings deposits as well as sulphidic ore in three of Minerven’s operating mines at El Callao in Bolivar State, to determine the suitability of the Albion process technology for the extraction of gold and silver.
The concept for the El Callao project is for Minerven to construct a new dam with an initial capacity of 10mt to receive tailings from a 100,000 oz Au per year Albion plant, which would be fed with existing tailings at the rate of 1500 tpd together with refractory ore blended at 1000 tpd.
Minerven has advised they have sufficient refractory ore grading at around 10g/t, to establish a project life of over 20 years at the planned production rate. The mining company does not have the installed technology to efficiently process their refractory ore.
Tailings going to the new dam from either mined refractory ore or recovered existing tailings will have toxic sulphides, arsenic and other impurities rendered inert in the form of insoluble ferric sulphates and arsenates by the application of the Albion process. The old dams will be progressively emptied and acid mine drainage stopped, with the dams then available for re-use by them.
Following the testwork at Xstrata Technology’s Albion pilot plant in Brisbane, and prefeasibility level financial modelling, EnviroGold and Minerven will negotiate the commercial terms of a 50:50 joint venture to be managed by EnviroGold.
The El Callao joint venture will undertake the recovery of existing tailings by low cost dredging, and Minerven will supply refractory ore to the joint venture at a price indexed to gold content. EnviroGold will not engage in mining operations for the El Callao project.
It is anticipated the capital costs for the process plant on a per oz Au production basis will be lower than EnviroGold’s Las Lagunas project in the Dominican Republic due to the higher grade of concentrate feed requiring reduced milling and tankage capacity for a similar gold production.
Operating costs should also be lower with the 10 Megawatt power requirement for grinding and oxygen production being at a supply price in Venezuela approximately 25% of the rates applicable in the Dominican Republic.
It is planned to progressively advance sampling, metallurgical testwork, feasibility studies and front end engineering design in order to be able to make a development decision by the end of 2010 which, if positive, would result in commissioning the El Callao project in early 2012, twelve months after the Dominican project.
Mr Johnson said that he will be quite comfortable for EnviroGold to invest in Venezuela in a joint venture with a Government owned mining company which requires the technology to process its refractory ore in an efficient and environmentally acceptable manner.
Yours sincerely,
EnviroGold Limited
Ingrid Laudzevics
Company Secretary
Enquires:
Mr Brian Johnson
Executive Chairman
Email: brianjohnson@envirogold.com
Ph: +61 2 4801 0685
Ph: +61 2 4801 0685
Mr James Tyers
Executive Director
Email: jamestyers@envirogold.com
Fax: +61 2 4861 7665
Fax: +61 2 4861 7665
Notice:
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