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PanTerra Gold To Achieve Nameplate Capacity At Las Lagunas This Week

PanTerra Gold (ASX: PGI) expects its Las Lagunas gold-silver project in the Dominican Republic to be running at nameplate capacity from this week as the company continues to work on optimising recoveries.

Gold and silver in the form of doré bars valued at about US$0.9 million were shipped to refiners in the first week of this month.

Total value of production for April is expected to be between US$3.5 million and US$4 million.

Monthly income should rise to around US$6 million per month by June 2013 with a target of US$7 million to US$8 million per month when the plant operations are fully optimised during the following quarter.

PanTerra's monthly cash outflow for project operating costs, financing costs, and overheads, has stabilised at about US$2.5 million per month.

Brian Johnson, chief executive officer, said that now the company's operations and cash flow were steadily improving, the primary focus would be on securing additional feed sources for the Las Lagunas plant.

This will be done from either within the Dominican Republic or from outside the country to extend the six year life of the project.

Subject to grade and metallurgical characteristics, concentrate produced from mining of refractory ores could be transported from distant locations.

This remains a commercial proposition for gold and silver extraction, utilising the existing plant and infrastructure, particularly while projected average operating costs remain in the US$350 to US$400 per gold ounce range.

The estimated Net Present Value (NYSE:NPV) of the Las Lagunas Project is currently estimated to be about US$173 million, based on a 10% discount rate and an average gold price of US$1,400 per ounce.

The estimate takes into account overheads, financing costs, royalties, government profit share, and hedging commitments.

The NPV will be substantially higher if the project can source additional feed.

PanTerra held around A$7.5 million in cash at the end of the December quarter 2012.

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