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PanTerra Gold Driving Higher Recoveries, Production At Las Lagunas

PanTerra Gold (ASX:PGI) is focused on bringing the Las Lagunas gold/silver project in the Dominican Republic to nameplate production of (58,000 oz gold, 480,000 oz silver) by end of CY2014.

A technical review by Xstrata Technology focused was on improving recoveries completed in December 2013 and a key recommendation should result in increased gold and silver recoveries.

Key recommendations are that the project install an additional Albion oxidation tank, and insulate the five existing tanks to improve oxidation performance.

Issued Cap: 770M
Top 20: 42%
Market Cap: A$32M
Cash & Investments: A$5.9M
Project Debt: US$41M

Las Lagunas Project - Background

PGI is reprocessing high grade sulphide tailings from historic production at the Pueblo Viejo mine (recently redeveloped by Barrick) with the world's first utilisation of the Albion oxidation process that was developed byXstrata Technology for precious metals.

The Albion process oxidises sulphide ore, rendering gold and silver amenable to extraction by standard CIL processing.

Las Lagunas Project - Key Statistics

- Original JORC Resource: 5.13Mt at 3.78 g/t gold, 38.6 g/t silver (620 koz Au, 6.4 Moz Ag)
- Remaining resource (31 December 2013): approximately 4Mt
- Current operating mine life to March 2019
- ~100,000 oz Au hedged at ~US$1,320/oz (Ag unhedged)
- Las Lagunas project pays no income tax, 25% profit share paid to Government from CY2016
- Government Au royalty: 3.2% of net revenue (no Ag royalty)

Las Lagunas Project - Xstrata Review

A technical review completed by Xstrata Technology was focused on improving recoveries completed in December 2013.

Key recommendations are that the project install an additional Albion oxidation tank, and insulate the five existing tanks to improve oxidation performance.

This should result in a significant increase in gold and silver recoveries.

The additional tank will be installed by mid-2014 at a cost of ~US$1.5 million.

Las Lagunas Project - Production Forecast

For calendar year 2015, Las Lagunas is forecast to produce 58,000 ounces of gold and 480,000 ounces of silver.

This would bring in revenue of around US$86 million and an operating profit of US$55 million based on a cash cost of US$475 an ounce equivalent (AuEq). The all in cost was not released.

The significant production increase in CY2014 and CY2015 would result from the additional Albion oxidation tank on line from Q3 2014.

Las Lagunas Project - Upside

- Increase project life through additional feed sources
- Tailings dam has surplus capacity to extend project life by 15 years
- Prospects for feed sources being investigated in Dominican Republic, Canada, USA, Peru & Columbia
- Annual metal production would be determined by concentrate feed grade

Las Lagunas - Key Milestone Catalysts For Next 12 Months

- Q1 Conclude negotiations with lenders to reschedule project loan repayments
- Q1 Complete & commission feed thickener
- Q2 Complete Albion circuit upgrade
- Q3 Commission upgraded Albion circuit and increase production

Exploration

PGI has a fully funded exploration program from three exploration concessions totalling 24,580ha held in the Dominican Republic targeting refractory Au/Ag and polymetallic Cu/Au/Ag deposits. The concessions are underexplored with limited application of modern exploration techniques to date.

Analysis

Achievement of key milestones is expected to increase gold production to 45,000 ounces in CY2014 and over 58,000 ounces in CY2015.

Silver production should increase to over 372,000 ounces in CY2014 and over 480,000 ounces in CY2015.

Now that PGI has done the hard yards and ensured the Las Lagunas plant is in operation, there are significant opportunities for PGI to:

- Identify and secure additional feed for Las Lagunas plant from the Dominican Republic as well as identify and secure additional feed from within the region which could be concentrated and shipped to Las Lagunas for processing.
- Identify and acquire stand alone projects where experience with refractory ore and Albion process give PanTerra Gold a competitive advantage.

Achieving milestones in the next 12 months would render PGI's current market value of $32 million as small change.

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