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PanTerra Gold Set To Double Las Lagunas Gold, Silver Production In June Quarter

PanTerra Gold (ASX: PGI) is expecting to double gold and silver production from its Las Lagunas Project in the Dominican Republic in the June quarter of 2013 over the March quarter production of 4,100 gold ounces and 41,330 silver ounces.

Further increases will result with the plant throughput now at design levels and the optimisation of operations to be completed in July/August 2013.

PanTerra said the March quarter production did not reflect the potential of the project as the process plant was still undergoing rectification of mechanical equipment for the majority of the period.

Plant throughput increased to 63,000 tonnes in April, from 30,000 tonnes in January and 49,000 tonnes in March.

In the future this should be able to be maintained at the target of 67,000 tonnes per month at 90% plant availability.

PanTerra has previously reported that the recent fall in gold prices will not impact on forecasts for its Las Lagunas Project.

The quantum increase in throughput in April is expected to be maintained and lead to revenue doubling to around US$13.5 million in the current quarter, while operating costs remain fixed at about US$7.5 million per quarter.

Substantial increases to surplus cash flow are expected in the September quarter, and again in the December quarter, following completion of plant optimisation.

The Las Lagunas project involves the reprocessing 5.137 million tonnes of high grade refractory tailings (3.8 grams per tonne (g/t) gold and 38.6g/t silver) from the Pueblo Viejo mine.

Pilot plant testwork demonstrated expected recovery of 435,000 gold ounces (2.6g/t) and 3.95 million silver ounces (24g/t) over a 6.5 year mine life utilising a standard CIL plant together with Xstrata Technology's Albion oxidation process.

There is no income tax on profits, with the government receiving 25% of operating profit after PanTerra recovers around US$70 million in construction costs.

The company has forward gold sales of 30% of total gold production (126,000 ounces) at US$1,320 per ounce as required by project lenders.

The balance of gold production (309,000 ounces) remains unhedged.

Only 6% of the resource had been treated to the end of March 2013.

PanTerra had a cash position of just over $2 million at the end of the March quarter.

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