BRAZIL — Toronto's Yamana Gold has announced it will proceed with construction at its Ernesto/Pau-a-Pique project in the Guapore Gold Belt. The project consists of an underground mine at the Pau-a-Pique deposit, both open pit and underground mining of the Ernesto deposit, and a shared mineral processing plant. Production could begin in late 2012.
Yamana anticipates that capital costs for construction will be US$116 million to develop a 1.0 million t/y project that produces approximately 100,000 oz/y of gold. Cash costs per ounce are estimated to be US$427. The initial mine life will be seven years, and the after-tax internal rate of return (IRR) will be 31%.
Measured and indicated resources at the two deposits are 8.2 million tonnes averaging 3.25 g/t Au or 854,000 contained ounces. Within that tonnage are proven and probable resources of 7.1 million tonnes grading 3.11 g/t Au or 710,000 contained ounces. There is also an inferred amount of 4.4 million tonnes at 1.79 g/t Au.
Additional information is available at www.Yamana.com.