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Patagonia Gold Sees Resource Expansion Potential At Cap-Oeste And La Manchuria

South American gold miner Patagonia Gold(LON:PGD, TSE:PAT) expects 2013 to see "significant" milestones after the company transformed into a gold producer last year.

The firm poured its first gold ingot from the Lomada de Leiva heap leach project in Santa Cruz, Argentina in November 2012.

The first two pours totalled 2,811 ounces of gold and generated proceeds of US$4.6 million, US$0.8 million of which was received in December last year.

This cash flow enabled the development and construction of the main heap leach to be internally fully funded to commercial production.

The company is maintaining its guidance of production cash costs below US$500 per ounce of gold from Lomada, it confirmed today.

In addition, its internal cash reserves will be used to continue developing its main Cap-Oeste and COSE projects.

So far, it has delineated gold equivalent indicated resources of 1.478 mln and inferred resources totalling 398,000 ounces AuEq on the Cap-Oeste, COSE, Manchuria and Lomada deposits.

"There remains considerable potential for resource expansion with mineralisation at the Cap-Oeste and La Manchuria projects remaining open in all directions and mineralisation at COSE open down plunge," the firm said.

For the 12 months, it posted a loss before tax of US$21,251 (2011: loss of US$33,167). As at Dec 31 last year, it had cash of US$4,663.

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