German-based Lexam VG Gold reports a positive preliminary economic assessment (PEA) for a possible open pit operation on its Timmins properties.
The company said April 23 that the focus on the pit potential was driven by near surface mineralization and previously released drill results, including resource estimates from last June.
Lexam is carrying out gold exploration built around its four key properties of Buffalo Ankerite, Fuller, Davidson Tisdale and Paymaster.
The company has an underground resource estimate of 650,600 ounces of gold measured and indicated from 4.16 million tonnes grading 4.86 grams per tonne (g/t) and 574,500 ounces ounces inferred from 4.07 million tonnes grading 4.39 g/t.
There is potential to expand the mineral resource at surface and at depth.
The base case paints a picture of an operation with annual gold production of 45,000 ounces over a 6.5-year mine life with a strip ratio of 9.6:1.
The initial capital costs to construct the mine is estimated at $58 million with cash operating costs of US $865 per ounce over the life of mine.
Lexam’s consultants, RPA Inc., recommends more drilling to upgrade the inferred resource to an indicated category.