PanTerra Gold (ASX: PGI) has announced that Xstrata Technology, provider of the Albion oxidation process, has undertaken an in-depth on-site operational review of the Albion circuit installed at the company's Las Lagunas process plant in the Dominican Republic.
The technical review has determined a significant increase in the efficiency of the Albion oxidation circuit can be expected with modifications, at a modest cost.
PanTerra added that the original design recoveries and revenues are reasonable targets in Q4 2014 following the proposed modifications.
Xstrata Technology Review Findings
The report concludes that the Albion circuit can only be expected to achieve its designed level of oxidation of the refractory ore by adding a sixth oxidative leach tank and insulating the existing five tanks.
These measures will increase retention time and reduce heat loss, respectively, resulting in increased chemical reactions and oxidation efficiency.
This should result in gold recovery through the Albion/CIL plant increasing substantially from current levels. The additional tank will be installed by mid-2014 at a cost of approximately US$1.5 million.
Status of Current Operations
The Las Lagunas process plant has been running consistently since September 2013 but at lower than budgeted recoveries due to inefficiency of the oxidation process, and reduced feed.
Gold production for the December 2013 quarter will be approximately 7,300 oz Au (66,000 oz Ag). Revenue for the December 2013 quarter is anticipated to be approximately US$11 million.
Outlook for CY2014
Production levels (and revenue) are expected to increase in the first half of CY2014 from sustained operation of the plant at its design throughput. Significant production improvement is expected in the second half of 2014 due to increased recovery rates following completion of the proposed Albion circuit modifications.
Gold production for CY2014 is anticipated to be approximately 45,000 oz of gold and 372,000 oz of silver, resulting in revenue of approximately US$64 million after Government royalties. Operating costs should be maintained at approximately US$30 million for the year.
The company has commenced discussions with its lenders to reschedule project loan repayments to reflect forecast profitability. The company expects these discussions to be satisfactorily concluded in February 2014.
Brian Johnson, executive chairman of PanTerra, said that he and his co-directors were pleased that the Albion technology providers have agreed and finalised a strategy to improve oxidation and resultant recovery of gold and silver.
With the proposed plant modifications, and forecast production and project profitability in 2014, the company should finally gain the traction needed to explore other development opportunities, including extending the life of the Las Lagunas project with an additional source of feed.
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