The Las Lagunas project is expected to produce about 69,000 ounces of gold and 630,000 ounces of silver annually, with the pilot plant testwork demonstrating expected recovery of 435,360 ounces of gold and nearly 4 million ounces of silver over a six and a half year mine life.
Following the recent successful upgrade of the ultrafine grinding mill at the Las Lagunas project, problems have been encountered with the ball mill which is the entry point for feed to the process plant, and the first stage of the extraction process.
The ball mill was not able to be tested under full load until earlier this week, after the ultrafine grinding mill was functioning at full power and capacity.
The problem with the ball mill is that windings in the electric motor are overheating as load is increased.
PanTerra said the problem will best be resolved through the installation of a suitable new motor, which can be purchased in the U.S. for about US$200,000 but will not be available for changeover for around six weeks.
During this period the plant will be deliberately restricted to around 50% of design throughput to avoid the risk of motor failure, and plant shut down.
Importantly, all other elements of the process plant are functioning as expected and PanTerra is confident the project will settle down to predictable and stable operating costs and recoveries once the ball mill problem is resolved.
A second eight inch bucket wheel dredge is scheduled to arrive onsite within two weeks as backup to the dredge feeding the process plant, to ensure continuity of mining operations.
Brian Johnson, executive chairman, said he was frustrated by the recent development but the company had an excellent management team onsite which has had to contend with mechanical malfunctioning of a number of critical items of equipment from major suppliers.
PanTerra plans to investigate the prospect of claims for damages against some of these suppliers.
The company remains confident of the process plant design, management's operating capability, and the financial robustness of the project.
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