Name and Location
Eagle Mountain gold project, Guyana.

Client
Goldsource Mines.

Project Description                  
Eagle Mountain hosts about 3.9-million tonnes, grading 1.49 g/t gold, for 188 000 oz in the indicated category, and 20.6-million tonnes, grading 1.19 g/t gold for 792 000 oz in the inferred category.

About 40% of the project’s overall ounces comprise saprolite, or weathered ore, which could enable Goldsource to fast-track operations through low-cost gravity processing.

A preliminary economic assessment (PEA) completed on the Eagle Mountain project in 2014 envisages standard opencut mining using conventional mining equipment.

For Phase 1, excavators, bulldozers and wheel loaders will excavate in situ soft weathered rock (saprolite) at a rate of 100 t/h and deliver the material to the in-pit grizzly, scrubber and screens, with sub-2 mm material being delivered by slurry line to the processing plant.

Material larger than 2 mm will be stockpiled for potential processing in the future.

No blasting or truck hauling will be required for mineralised saprolite and no blasting will be required for waste. Waste material will be loaded hauled by truck to a nearby storage facility. The strip ratio has been estimated at 0.9:1 (waste:mineralised saprolite). Top-soils will be prestripped and stockpiled near the opencuts for future reclamation purposes.

A single 1 000 t/d Sepro 10K gravity processing plant is envisioned for Phase I.

Generally, the plant consists of a grizzly, scrubber, screens and Falcon gravity concentrators.
Gold concentrate from the gravity concentrators will be further concentrated using a shaking table and refined on site for the production of doré bars.

Upon successful completion of Phase I, three similar plants will be sequentially installed to increase production to between 3 500 t/d and 4 000 t/d by year four.

Coarser-grained (larger than 2 mm) saprolite will be screened out and stockpiled. Opportunities to increase production by crushing or milling stockpiled oversized material is possible, depending on further testwork. Additional testwork on potential flotation and cyanidation might also increase production.

The PEA estimates that the project will process about 7.3-million tonnes of ore at a head grade of 1.2 g/t, producing about 168 700 oz of gold at cash costs of $480/oz over the project’s life.

The conceptual approach entails yearly output over four years of 5 600 oz, 14 400 oz, 21 600 oz and 28 800 oz of gold respectively.

Goldsource will have an inventory of about 162 000 oz of gold in its settlement ponds, owing to the gravity processing, which could potentially be milled at a later date.

Net Present Value/Internal Rate of Return
The project has a base case pretax net present value, at a 5% discount rate, of $69.4-million and a pretax internal rate of return of 84%.

Value
Phase I was initially estimated at $5.9-million, this has been revised to between $4-million and $5-million.

Total capital costs, including the proposed Phase II, III and IV expansions, and sustaining capital, are estimated at $24.2-million.

Duration
The project declared commercial production in June 2016.
 

Latest Developments
Goldsource has reported that it is gaining momentum at its flagship Eagle Mountain mine, where it poured 145.2 oz of gold and sold 200.3 oz during the second quarter ended June 30. The company recorded an average realised price of $1 264/oz.

During the period, Eagle Mountain processed 48 098 t of ore, averaging 641 t/d, and for 30 continuous days before June 20, processed an average of 916 t/d near the Phase 1 boilerplate capacity of 1 000 t/d.

The estimated gravity recovery to concentrate averaged 47% for the second quarter, up from 40% in the first quarter.

Goldsource has advised that the average grade dropped from 0.91 g/t to 0.37 g/t during the quarter, as planned, while the company is optimising the plant using lower-grade material.

The company expects higher-grade material in the third quarter. According to Goldsource, the average estimated grade starting in July was about 0.80 g/t gold, at a 0.0:1 strip ratio, which is expected to transition to more than 1 g/t gold in August.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Goldsource Mines investor relations, Fred Cooper, tel +1 604 694 1760, fax +1 604 694-1761 or email info@goldsourcemines.com.