TWST: We would like to begin with a brief historical sketch of the company and a picture of the things you are doing at the present time.
Mr. Shrake: Pacific Rim Mining Corp. is an exploration and development company whose sole mission is to become an intermediate level gold producer with low cost production. We recognize that the gold mining sector today is rewarding those companies with the largest margins that are capable of producing at least 150,000 to 200,000 ounces per year. So that is the strategy of the company and at this point in time we have a fairly clear path to achieve that goal.
TWST: Would you tell us about the path?
Mr. Shrake: We are in the process of drilling up some additional resources at the project that we own, our premier project, which is El Dorado, located in the country of El Salvador. In January of this year, we did a pre-feasibility study for the 500,000 gold ounce Minita deposit, looking at mining Minita at a rate of 80,000 ounces per year. It was about a $50 million capital outlay.
The most important outcome of the pre-feasibility study showed that we can produce gold on the site for about $163 an ounce, all in operating costs, which is very low cost and in the lowest quartile worldwide. So immediately upon completion of this pre-feasibility study, we rendered it obsolete with the discovery of two new gold zones on the El Dorado project. We are currently drilling off one of those targets, the South Minita gold zone, right now and are getting ready to quantify the ounces we discovered at South Minita by calculating a resource estimate in the first quarter of 2006.
We also discovered another part gold target called Nance Dulce, which is located a little bit further away from the main ore body, which we will probably do a resource calculation on as well. It probably only has enough drilling detail to calculate an inferred resource but certainly, at some point in the future, we will do more drilling there and increase the resources to a higher category or convert them to reserves. So we are in the process of accomplishing two things. One is to increase the El Dorado resource in the near term and re-work the economic analysis of the project. Once we finish the South Minita drilling, by early 2006, we will do a resource calculation for South Minita followed by a scoping study that shows stakeholders the rewards of an expanded operation based on Minita and South Minita together. We are looking at increasing throughput to 2 times the pre-feasibility levels, so that would be 160,000 ounces per year. We think that we have identified the resources that will get us to that production rate, but, as I say, we are in the process of completing the drilling at South Minita necessary to define those ounces. Once we have the South Minita resource and the scoping study completed, hopefully by mid-2006, we'll launch a feasibility study for the project.
Our Minita pre-feasibility study was very detailed. The only aspect of the study that did not meet feasibility requirements was the detailed underground mining engineering, which we will increase the quality of in this next study and most of the other work is done. So we anticipate being able to complete that fairly quickly.
The other path we are on is we are stepping on the gas pedal on the exploration front. We have been on-site at El Dorado now for about four years. Earlier in this year, we made some key breakthroughs with respect to our understanding of the geology on-site, specifically regarding the timing of the bonanza gold mineralization. We are very much a science-based exploration outfit and we've made significant advances this year. Since the beginning of the year, probably, half the drill holes that we have drilled have been potential ore grade intercepts. Based on this breakthrough, we identified some really important new targets on the project and we think we have the goods to really push the resources up to another level. So we have doubled the number of drill rigs on-site and we are looking to step on the gas with respect to the exploration drilling in the coming year.