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GOLD DEVELOPMENT – Pueblo Viejo gets nod, Cerro Casale on hold

DOMINICAN REPUBLIC - Vancouver-based PLACER DOME has approved development of the Pueblo Viejo gold mine to begin wh...



DOMINICAN REPUBLIC – Vancouver-based PLACER DOME has approved development of the Pueblo Viejo gold mine to begin when the local government issues the necessary permits. Development will take about three years.

The project will need a capital investment of about US$1.0 billion to build the mine and related infrastructure. During the first six years of operation, Pueblo Viejo is expected to produce an average of 800,000 oz of gold annually at cash costs between US$175 and US$185/oz. Total production over 20 years will be approximately 12 million oz at average cash costs between US$200 and US$210/oz, according to Placer Dome.

Oxide deposits in the area 100 km northwest of Santo Domingo were mined for gold from 1975 to 1999. Placer Dome acquired the Pueblo Viejo property in July 2003. As of Sept. 27, 2005, the deposit is estimated to contain mineral resources of 34 million tonnes averaging 2.3 g/t Au, or 2.5 million oz of gold. An open pit mine and 15,000 tonnes/day processing plant (using whole ore pressure oxidation followed by CIL) will be built. Conventional facilities are planned for tailings impoundment and waste rock storage.

The project also involves a US$350-million, 140-MW power plant to be built and owned by Placer Dome. The plant will accept multiple fuels, including coal and coke, and be tied into the national power grid. The cost of the power is in addition to the capital requirements of developing the mine and mill.

With a commitment of US$1.0 billion for Pueblo Viejo in the Dominican Republic and a further US$245 million for the Cortez Hills (60% with KENNECOTT) open pit and heap leach project in Nevada, Placer Dome has decided not to proceed further on the Cerro Casale project in northern Chile. One of the world’s largest undeveloped gold and copper deposits, Cerro Casale is owned indirectly by Placer Dome (51%), BEMA GOLD (24%) and ARIZONA STAR (25%). The deposit contains measured and indicated resources in excess of 1.0 billion tonnes at 0.71 g/t Au and 0.26% Cu, containing 24.0 million oz of gold and 6.0 billion lb of copper. Developing Cerro Casale would take an estimated US$1.6 billion.

Bema disagrees with Placer Dome that financing cannot be found for Cero Casale, saying in a press release dated Sept. 27 that it “believes that Placer’s economic analysis of Cerro Casale is fundamentally flawed.” Bema accuses its partner of using updated operating cost estimates without updating commodity prices in making its decision. Bema further says that Placer Dome’s refusal to seek financing may be contrary to their shareholders’ agreement.

See either www.PlacerDome.com or www.Bema.com for more on these projects.


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