MEXICO - Toronto-based METALLICA RESOURCES has raised an additional $34.5 million to be spent largely on prestripping at its Cerro San Pedro gold project. The site is 20 km from the city of San Luis Potosi in the central portion of the country. The money came from the sale of units consisting of one common share and one-half of one common share purchase warrant.
According to Metallica, the Cerro San Pedro district was mined as early as 1575. The company acquired its project in 1995 and produced a feasibility study in 1997. Metallica then invited Cambior to become its joint venture partner, and that company produced a feasibility study in November 1999. Cambior sold its interest to Glamis Gold in November 2000 and the new partner revised the feasibility study. In February 2003, Metallica bought out its partner and regained its 100% interest in the project. Metallica began construction in February 2006 on a $29.1-million mine, heap leach and gold plant. In April the Mexican government suspended Metallica's explosives permit pending the settlement of certain lawsuits against the company. The permit was restored in October.
The Cerro San Pedro project is forecast to have average annual production of approximately 90,500 oz of gold and 2.1 million oz of silver, or 122,800 oz of gold equivalent. The mine life is currently estimated to be approximately 8.5 years. In April 2006, the mineral reserves and resources were updated to reflect more current metal prices for gold and silver. Mineral reserves now stand at 69.9 million t grading 0.55 g/t Au and 23.0 g/t Ag. This contains 1.23 million oz of gold and 51.7 million oz of silver.
Photos of the Cerro San Pedro construction are posted at www.Metal-Res.com.