Minera Gold (ASX:MIZ) is set to become the newest Australian Stock Exchange listed gold producer from its operations in Peru, and anticipates that the first gold shipments will occur in the next 10 days.
Metrics are very attractive, with Minera targeting all up cash costs to US$780 per ounce by December 2014.
Minera's shares are expected to open firmer today.
Commissioning is on schedule at the company's newly leased and refurbished San Santiago CIP gold plant at Otapara in southern Peru, which is a key requirement in the company seeking to reduce its all up cash costs.
Minera said that dry commissioning of the crushing and grinding circuits and also the refurbished tanks has occurred as planned over the last 10 days and the wet commissioning and first fill is now underway.
Stockpiled ore from the company's wholly-owned Torrecillas gold project continues to be shipped to site and provides feed for the first month of processing.
Peru delivers a mining friendly jurisdiction and offers a strong legal framework for mining and investment.
The country is the number one producer of gold, lead, tin and zinc in Latin America.
Minera has control
Importantly for Minera, the commissioning of the CIP circuit is part of the strategy to recommence gold production which will be fully under the company's control, not third party toll treatment as per previously.
Torrecillas Gold Project
The Resource of 102,100 ounces of gold at the Torrecillas Mine is just one of 23 known high grade gold veins in the concession.
This offers substantial near-mine exploration potential as evidenced by the Tessie and Rebeca veins that are in production via trial mining.
Minera has also locked in new financial arrangements including a US$5 million tranched based deal to acquire 10% life of mine production from Torrecillas with precious metals streaming company SilverStream and a $2.2 million capital raising.
- High-grade narrow vein Torrecillas gold mine in production in southern Peru.
- Focused on reaching ~18,000 oz Au annualized production rate by end of 2014 driven by lease of our own processing plant. Further production increases projected for 2015.
- Increased production and materially improved operating margin at Torrecillas to fund exploration in 2014 and 2015 to build resource base.
Minera Gold will transition to an owner-operator gold producer this month with the first gold shipments will occur in the next 10 days.
Importantly for Minera is the very attractive metrics, with all up cash costs to US$780 per ounce by December 2014.
At a current gold price of over US$1300 an ounce, this provides a healthy margin.
Proactive Investors valuation for Minera is in the range of $0.007 - $0.012 within 6-9 months.
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