Kingsgate Consolidated has completed a definitive feasibility study (DFS) at its Nueva Esperanza silver-gold heap leach project in Chile, which concluded that the development would require a capital cost of $140m.
The Nueva Esperanza project consists of three deposits, Arqueros, Teterita and Chimberos, located in northern Chile.
Kingsgate said that the DFS is based on a three million tonnes (Mt) a year heap leach operation with on-site power generation. The company intends to bring the project into production and create an operating base to identify additional areas of mineralisation within the current exploration license areas.
The DFS found that the project is estimated to produce about 7.5 million ounces (Moz) a year of silver equivalent, based on the current reserves of 17.1Mt grading at 97g per tonne of silver and 0.27g per tonne of gold.
Based on the anticipated metallurgical recovery factors from test work to date, the project's planned production is expected to be 40Moz of silver and 112,500oz of gold over an initial mine life of six years.
Kingsgate Consolidated managing director and CEO Gavin Thomas said the company remains optimistic about the mineral endowment of the immediate vicinity, which has the potential to provide it with a long, sustainable operating presence in this region.
"The decision to begin construction is anticipated in the second half of this year and will put Kingsgate back on a growth path and validate the underlying value of the project acquisition," Thomas said.
Site works are planned to start after this winter, while first production at Nueva Esperanza is anticipated for the first half of 2016.
Kingsgate said negotiations are underway with potential debt financers, with several options being considered to fund the project.
Image: Nueva Esperanza site layout and infrastructure. Photo: courtesy of Kingsgate Consolidated.