(MENAFN - ProactiveInvestors - Australia) International Goldfields (ASX:IGS) will have access to 1 million ounces of gold and 40.6 million pounds of copper from Santa Fe's Ortiz deposit as part of its merger agreement with the US company.
As part of the merger agreement, Santa Fe provided a recently completed independent review of the historical drilling, sampling and metallurgical data at the Ortiz Project.
The review delineated a total JORC measured and indicated gold resource at the Ortiz project of over 973,000 ounces at 1.224 grams per tonne.
The independent JORC resource report also estimated a measured and indicated copper mineral resource at the Lukas deposit of 13 million tonnes at 0.142% total copper for 18,400 tonnes of contained copper.
Inferred copper from Lukas stands at an additional 1 million tonnes at 0.122% copper, with further gold upside likely from the copper concentrate.
The current measured and indicated gold resource is at 378,000 ounces.
Independent, though non JORC compliant, studies have also evaluated the open pit mining of the Carache and Lukas deposits that suggest potential for further low cost recovery.
A scoping study for the Ortiz project is likely to be completed by middle of next year with environmental permitting studies likely to start in the first quarter of 2013.
International Goldfields with its proposed merger with Santa Fe could potentially vault into a producer, with the merged entity to have access to a diversified portfolio of tenements across West Africa, Brazil and southwest US.
Once combined, the merged company will have an initial market capitalisation of about 70 million with a cash position of A10 million, and a low cost gold and silver production base of 28,000 ounces per annum of gold equivalent.
The Ortiz Gold-Copper project comprises 171 contiguous square kilometres of land in Santa Fe, New Mexico, where Santa Fe has exclusive exploration and development rights.
Drilling in the area between 1980 and 1986 by Gold Fields produced approximately 250,000 ounces of gold from an open-pit, heap-leach operation, while historical production exceeded 350,000 ounces of gold.