The Canadian project will have a mine life of 11 years plus two years of ramp-up
Galleon Gold expects the pre-production capital cost for its West Cache gold project in Canada to be C$150m ($120m), based on its maiden preliminary economic assessment (PEA).
According to the PEA, the company will target underground mining operations, while using toll processing for treating mineralised material.
The West Cache gold project, which is located in Timmins, Ontario, will have a mine life of 11 years plus two years of ramp-up.
Production at the Canadian gold mine is estimated to be 2,400 tonnes per day (tpd).
Galleon Gold said that the initial capital costs (capex) are comparatively low for a project of this size as it doesn’t involve the construction of a process plant or a tailings storage facility.
Over the project’s life of mine, the company expects to extract 940,200 ounces (oz) of gold with an average production of 85,500oz per year. The company estimates the gold recovery from the project to be 893,200oz during its 11-year operations.
Apart from the PEA, Galleon Gold has updated the project’s mineral resource estimate with indicated mineral resource at 472,000oz and inferred mineral resource at 1,088,000oz.
Galleon Gold president and CEO David Russell said: “The PEA incorporates the near-term option of using local toll processing, while also suggesting on-site processing becomes increasingly attractive with further growth in the project’s Mineral Resource.
“Based on our geologic model, I believe West Cache has the potential to extend the LOM beyond the initial 11 years by expanding the Mineral Resource downdip and along strike.
“Moreover, we have explored less than 10% of the Property and recent geological interpretations suggest we should be looking to pursue new exploration targets in untested host rock both north and south of the current Mineral Resource.”
Russell said that the company’s main exploration goal for this year is to add high grade gold ounces and undertake surface drilling to expand the mineral resource. In early to mid-2023, the company will plan to begin underground test mining the Zone #9 area, pending permits.
Galleon Gold gained access to the West Cache gold project through the acquisition of Explor Resources in late 2019.