TSX, AIM and Lima listed Minera IRL has been eking out positive cashflow over the past six or so years from the fairly small, and supposedly short-life, Corihuarmi heap-leach gold mine in Peru. As an example of how to get the most out of an ultra short life project has few peers and it now looks as though Corihuarmi’s mine life could be extended further beyond its current 2015 expected closure date, with the finding of new heap-leach grade mineralisation through exploration diamond drilling very close to the existing mining operation.
And, what is more, for the first time at Corihuarmi, the drilling has, in two holes, intersected what the company describes as narrow bonanza gold grades which could lead to a new exploration focus in that area given the company has not found such high-grade material in the past.
As Minera IRL points out, Corihuarmi continues to generate sound cash flow. In 2014, the mine is forecast to mine and treat 2.5 million tonnes at an average grade of 0.3g/t Au. Gold production in Q1 2014 was 5,834 ounces at a cash site operating cost of $737 per ounce (total cash cost of $831 per ounce sold). Moving forward, the company notes, new Peruvian government regulations have been enacted to streamline and speed up the approval process and facilitate development of new mining areas such as those found at Corihuarmi.
Drilling has been focused on the Laura, Cayhua and Cerro Rojo prospects, all located within about a km of the existing Corihuarmi heap leach pads and potentially economic gold mineralisation, at similar grades to that currently being mined and treated by heap leach, has been intersected in new zones at the Laura and Cayhua prospects. In addition, the bonanza-grade gold mineralisation has been intersected at the Cerro Rojo prospect.
The latter is obviously of particular interest and while the widths recorded are fairly narrow, the grades are particularly high – 1.1m grading 53.4g/t gold (including 0.6m grading 87.9g/t Au) and 1.3m grading 90.9g/t gold.
The company will thus be continuing with its exploration drilling programme around Corihuarmi to further delineate the new material with a view to defining sufficient ore to continue the heap leach operations and, at Cerro Rojo, to investigate further the high grades encountered there.
In commenting on the new results, Mineral IRL’s Executive Chairman, Courtney Chambaerlain, noted: “The drilling program has been highly encouraging on two fronts. These substantial leach grade gold intersections, particularly at the Laura Zone, have the potential to extend the life of the Corihuarmi Mine. Also, for the first time, Minera IRL has drilled bonanza-grade intersections in two holes below an outcropping silicified structure at the top of Cerro Rojo which opens up a new exploration model for us to pursue.”
Any extension of positive cashflow from Corihuarmi will be invaluable for Minera IRL which is currently involved in raising finance to build its flagship Ollachea gold project, also in Peru, where it has defined a low-cost underground mining operation containing gold reserves of approximately 1 million ounces, with a big additional inferred resource too. The project has received the necessary Environmental and Social Impact permits, and is now awaiting the final Construction permit which is expected any time now.
The company also has extensive highly prospective land holdings in the Deseado Massif area of Argentina and is involved in bringing one of these, Don Nicolas, into production. Here it has negotiated a deal with Argentinian company, CIMINAS, which is investing sufficient funds to bring a mine on stream leaving Minera IRL’s Argentinian subsidiary with a 51% stake in the holding company for the project. Construction commenced here at the beginning of the current year and production at a rate of around 50,000 oz/year gold equivalent, of which half will be attributable to Minera IRL, is expected to begin early 2015.