April 11, 2015

Proactive weekly mining news summary - SolGold, Lydian International, Patagonia Gold and ZincOx Resources

Some significant stories from the diggers in the truncated trading week.


SolGold (LON:SOLG) has started to drill its eleventh hole on the Alpala target at Cascabel in Ecuador, it said yesterday.


The drill is in the southern margin of the main target area and will test for a continuation of the extensive mineralisation encountered already at Central Alpala.


Recent drilling has uncovered some of the best results from the copper/gold deposit, with hole nine intersecting 1,271 metres grading 0.59% copper and 0.77 grams per tonne of gold from 430 metres onwards.


Also this week the firm said it raised £2.24mln from an open offer to fund the drill programme.


Toronto-quoted Lydian International (TSE:LYD) expects to save up to US$100mln through steepening the mine ramps at its Amulsar open pit gold project in Armenia.


The savings, which will accrue over the life of the mine, follow a country-wide relaxation of the gradient limits on haul roads to 10% from 7%.


The new rules will mean a smaller pit size and less barren rock mined.


Eslewhere, Philippines-focused Medusa Mining (ASX:MML) is planning for the long term future of its flagship Co-O mine and has approved the construction of a US$10mln underground service shaft.


Surface earthworks for the project have kicked off, it said, which will take around 17 months to construct with an estimated pay back time of 1.4 years.


The new shaft, almost 400 metres underground, will have a rope-guided cage and improve the efficiency of the mine between levels 3 and levels 8, the company said.


It will increase hauling capacity from level 8 to around 1,700 dry tonnes a day (dptd) from 1,400 and lift the total mine capacity to around 2,700dptd from all shafts.


The new shaft will have a nominal ten year working life.


Amur Minerals (LON:AMC) told investors it will have to carry out much less drilling than expected at the Kubuk deposit on its Kun-Manie licence in Russia after a major upgrade to the resource.


Kubuk now contains an estimated 23,400 tonnes of nickel and 6,100 tonnes of copper, of which 3.5mln tonnes or 17% is now Indicated at an average grade of 0.68% nickel and 0.18% copper.


Caledonia Mining (LON:CMCL, CVE:CAL) sold 12.1% more gold in its latest quarter compared to the last three months of 2014.


The operator of Zimbabwe's Blanket mine said targeted gold production for the whole of 2015 remains at 42,000 ounces of the precious metal.


It said 10,770 ounces were sold in the three months to March 31 - 12.1% higher than Q4 - but this was an 11.8% decrease on the ounces sold in the first quarter of 2014.


In terms of production, 9,960 ounces were produced during Q1 2015, which was a 4.4% decrease on the gold produced in the previous quarter and a 2.7% decrease on the gold produced in Q1 2014.


Speaking of gold, Patagonia Gold's (LON:PGD) Lomada mine exceeded production forecasts last year and ran above nameplate capacity in the last five months.


Revenues in 2014 rose to US$35.9mln (2013:US$10.2mln) as production from Lomada totalled 29,347 ounces, with an average of 3,131 ounces per month coming out of the mine in Argentina in the last five months.


Patagonia sold 27,868 ounces at US$ 1,251 per ounce, which netted down to US$ 1,123.


Losses for the year reduced to US$6.8mln from US$15.2mln, while cash costs for the second half of 2014 were US$655 per ounce compared to US$807 per ounce in the first six months.


For the current year, Patagonia expects Lomada to produce 30,900 ounces including ore already on the leach pad.


Recycling specialist ZincOx Resources (LON:ZOX) reported record production of concentrate in its first quarter from its Korean plant, while the operation continues to improve.


The treatment plant, where there have been a number of well-documented teething problems, has now run continuously for over 90 days and is at about 90% of target throughput and generating positive EBITDA (underlying earnings).


The firm produces zinc by running EAFD (electric arc furnace dust) through the plant; target throughput is 580 tonnes a day.


In the latest quarter, 36,783 tonnes of EAFD were treated and 8,667 tonnes of concentrate were produced compared to 31,379 tonnes treated in the fourth quarter and 7,568 tonnes produced.



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