(MENAFN- ProactiveInvestors - Australia) PanTerra Gold (ASX: PGI) has updated the market on the ultrafine grinding mill upgrade at the company's Las Lagunas gold tailings project in the Dominican Republic.
PanTerra has previously reported on problems associated with the oxidation circuit at the recently commissioned process plant for the extraction of gold and silver from 5.2mt of refractory tailings from the Puerto Viejo mine.
The primary problem requires the replacement of the shell of the ultrafine grinding mill, which should be resolved by the end of this month, with the replacement having now been airfreighted from the manufacturer in Germany.
The process plant will then be ramped up over the November-December period to the planned 100t/hr throughput, after which it should be operating at an optimal steady state for gold and silver recoveries from the high grade feed (3.8g/t gold and 38.6g/t silver).
The first gold silver doré was poured by PanTerra at the project in July this year.
Production forecast
The Las Lagunas project is expected to produce about 69,000 ounces of gold and 630,000 ounces of silver annually, with the pilot plant testwork demonstrating expected recovery of 435,360 ounces of gold and nearly 4 million ounces of silver over a six and a half year mine life.
This will generate free cash flow of nearly US$100 million within 18 months, in addition to repaying Macquarie Bank's $37.5 million project loan.
Another bonus for PanTerra is the company will recover its investment in the project of around $90 million to 30 June 2012 under the profit sharing agreement with the Dominican Republic Government.
Support from Macquarie
PanTerra recently raised A$1.75 million in cash after Macquarie Bank exercised 17.5 million unlisted options priced at A$0.10 each.
The options were originally due to expire on 15 October 2012 with Macquarie still holding another 17.5 million A$0.15 options expiring 15 October 2013.
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