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Minera Gold On Schedule For Plant Commissioning In Peru, A$780/Oz Cost

Minera Gold's (ASX:MIZ) move to owner-operator production of gold in Peru is on schedule with commissioning of the leased Otapara CIP gold circuit to begin in the first two weeks of July.

This is expected to deliver gold production of at least 18,000 ounces per annum at a very attractive all-in cash cost of A$780 per ounce by the end of 2014.

Base load feed will be sourced from the company's flagship Torrecillas Gold Mine, which has a Resource of 102,100 ounces of gold at an average grade of 16.1 grams per tonne gold.

Negotiations are also progressing well to toll process third party high grade gold ore.

San Santiago Processing Plant

All major equipment has been delivered to the leased Otapara CIP gold circuit in the southern Peruvian district of Acari and is currently being installed and fitted.

The ball mill is due to arrive on site this Saturday Lima time.

Shipping of ore stockpiled at Torrecillas, 180 kilometres southeast of Otapara in neighbouring Arequipa state by road, will commence over the course of the next week.

Mill commissioning is expected to occur within the first two weeks of July with first shipments to local refineries to occur shortly thereafter.

Potential Third Party Ore Toll Treatment

Minera also noted that it has received a robust number of approaches from third parties seeking agreement to potentially process their ore under a toll treatment arrangement through its mill.

While the priority is for the mill to treat ore from Torrecillas, the company is confident that any and all excess capacity in the 220 tonne per day circuit will be filled by the toll treatment of high grade ore exceeding 20g/t gold.

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.


Minera Gold's move towards becoming a owner-operator producer of gold is on schedule, which will in turn deliver operating costs as low as $780 an ounce once production hits the forecast annualised run rate of 18,000 ounces of gold per annum.

At a gold price of (US$1250) and A$1330 would generate gross revenues of $9.9 million on that run rate. This, against a current market cap of circa $2 million demonstrates just how undervalued Minera Gold is at current share price of $0.003.

Share price catalysts ahead include:

- Reaching an agreement to process third party ore;
- Further progress on the Otapara CIP gold circuit; and
- Mining of the Tessie and Rebeca veins.

In all, our estimate of valuation for Minera is in the range of $0.007 - $0.012 within 6-9 months.

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