Cleveland Mining To Increase Gold Recoveries With New Processing Circuit At Premier
Cleveland Mining (ASX:CDG) has received the licence to install a carbon-in-leaching processing plant that would significantly boost gold recoveries at its Premier Gold mine in Brazil.
The processing of the ore with a cyanide is likely to result in gold recoveries of between 80% to 97% from current levels of 50% to 64%.
The new CIL plant will also reprocess an estimated 200,000 - 300,000 tonnes of gold-bearing tailings from historic mining activities and 50,000 tonnes of 1.18g/t tailings stored by the company in addition to processing any future production.
Cleveland Mining's managing director David Mendelawitz said, "Even with the current gold price and using only the gravity circuit, Premier is anticipated to be cash-flow- positive during the next quarter.
"Our explicit aim was to be able to make money at the bottom of the commodity price cycle, in times such as these. To our knowledge, we are the only listed microcap company producing gold in Brazil and the hard work and forward-thinking are starting to pay off.
"Using cyanide will substantially increase recovery with what is expected to be only a small increase in operating expenses," he added.
Plant upgrade
The company produced about 30 kilograms of gold dore in the last three months despite the processing plant operating at 66% of nameplate capacity and being offline for half the time due to mechanical issues.
The significant production rate shows that even with the current gravity plant, the company can produce the targeted 10,000-20,000 ounces per annum of gold with the low grade ore being mined.
To boost production, major alterations to the ball mill is being done and the cyclones are being reconfigured. A higher grade feed is also being mined from the Premier underground.
Mendelawitz said, "Whilst the mill has been under repair we have mined, crushed and stockpiled around 30,000 tonnes of ore that is expected to contain roughly 60kg of gold, ready for the anticipated resumption of processing in the next few weeks."
Analysis
The receipt of an installation licence for a carbon-in-leach processing plant and potential to boost recoveries is a milestone for Cleveland Mining, which recently completed a $10 million funding facility with Baycrest Capital.
Once the mill is fixed, the current gravity plant can likely produce the targeted 10,000 - 20,000 ounces per annum.
Cleveland was set up to acquire projects that would earn money even at the lower end of the commodity cycle, and that is precisely what it is doing.
Premier is on track to be cash flow positive in the next quarter, a significant achievement at the lower gold price prevailing at present. We consider the market may not have picked up on this sufficiently and believe in tandem with today's announcement is value accretive from current share price of $0.088.
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