TORONTO, March 13, 2013 /CNW/ - Patagonia Gold Plc
(TSX: PAT), (AIM: PGD) ("Patagonia Gold" or "the Company") today
provided a progress update for its Lomada de Leiva ("Lomada") and
Cap-Oeste/COSE projects in Santa Cruz
Province, Argentina.
Lomada
- Lomada main heap leach project on target to achieve full
operational status by late Q2 2013 with an estimated production of
14,000 ounces of gold for the second half of 2013
- Receipt of US$3.8 million from
second pour of 2,385 ounces of gold from the trial heap
leach
- Development construction fully funded to production
supported by gold sales from original and extended trial heap
leach
- Arrival of principal mining equipment in Buenos Aires for assembly and transport to
site, with operation to begin in late March
2013
Cap-Oeste/COSE
- Successful fund-raise of US$9.4
million completed in early March
2013 allows acceleration of drilling on the highly
prospective Cap-Oeste/COSE corridor and other nearby
targets
Photographs of the progress at Lomada and Cap-Oeste will be
posted on the Company's website, www.patagoniagold.com.
"We are very pleased with our progress towards achieving
self-sufficiency in 2013," said Bill
Humphries, CEO of Patagonia Gold. "With the proceeds from
our recent fund-raising together with the income from the Lomada
gold project, Patagonia Gold is able to continue with its plans to
expand the resource base of its flagship Cap-Oeste/COSE project,
whilst also continuing the development of its other exciting
projects."
LOMADA DE LEIVA
The Lomada de Leiva project is located approximately 40 kilometres
southeast of the town of Perito Moreno in the Province of
Santa Cruz, and is within the
Company's La Paloma property block, covering over 44 square
kilometres.
Construction of the fully permitted Lomada main heap leach
project is well advanced and on target to achieve full 'nameplate'
production of 21,000 ounces of gold per annum in late Q2 2013. In
the meantime, production of gold continues with the mining and
loading of ore onto the extended trial heap leach pad.
Proceeds of US$3,835,118 from the
second gold pour of 2,385 ounces of gold have been received, which
together with the receipt of US$708,186 from the initial gold pour of 425.67
ounces of gold bring the total proceeds received by the Company to
date to US$4,543,304. This revenue is
from gold produced from the trial heap leach. Gold production will
continue from the extended trial heap leach until the main heap
leach commences full production in late Q2 2013.
The principal items of mining equipment, including a Liebherr
R974 excavator and three Volvo A40F dump trucks, have arrived in
Buenos Aires for assembly and
transport to site and will begin operation in late March 2013. Further equipment, including a
Liebherr PR754A bulldozer and an L586 HL loader, is scheduled to
arrive during March and April
2013.
The use of an owner-operated fleet is expected to substantially
increase production and reduce costs as this will allow the
termination of the smaller hire equipment, which the Company has
been required to use during start up.
The Company is maintaining its guidance of production cash costs
below US$500 per ounce of gold from
the Lomada project.
CAP-OESTE/COSE
The El Tranquilo property block, covering approximately 80,000
hectares, contains Patagonia Gold's flagship project, the Cap-Oeste
deposit, together with the COSE bonanza gold and silver deposit and
numerous other prospects including Monte Leon. The successful
fund-raise of US$9.4 million
completed in early March 2013 allows
Patagonia Gold to accelerate its drilling programmes on its
portfolio of properties.
A second drill rig is scheduled to arrive at Cap-Oeste in late
March 2013 to continue drilling on
the highly prospective corridor between the bonanza grade COSE
deposit and the Cap-Oeste deposits in order to follow up the high
grade intersections encountered in the 2012 drilling campaign. The
initial programme comprises 100 diamond core drill holes for 12,700
metres. Additional drills will be brought in as and when required
should potential resources be identified.
Drilling is also planned for the adjacent Don Pancho prospect, where exploration drilling
in 2009 identified high grade gold/silver near surface and on the
Palmeras prospect, which was identified by the recently completed
Induced Polarization (IP) geophysical programme.
EL TRANQUILO AND REGIONAL
The Monte Leon, Cerro Vasco and El
Bagual prospects will be drill tested during the 2013 exploration
campaign. A total of 26 diamond core HQ holes, for 6,000 metres,
has been programmed for 2013.
Monte Leon is a high tonnage, low grade oxide target containing
high grade quartz vein hosted sulphide mineralisation.
Cerro Vasco, located
approximately 15 kilometres directly along strike from Lomada and
20 kilometres directly west of Goldcorp's world class Cerro Negro project, contains two high priority
targets. The first is a similar breccia system to that
currently being mined at Lomada and outcropping at surface with
gold in rock chip samples up to 44g/t, and the second is a large
silica cap proximal to the breccia system.
El Bagual, located in the centre of the Deseado Massif,
represents another large system of mineralisation drilled by
Barrick but as yet not followed up by the Company. The system is
completely oxidized to at least 150 metres below surface and hosts
wide intersections up to 28 metres @ 0.50g/t and 38 metres @
0.38g/t from 50 metres below surface with grades increasing with
depth. El Bagual is a potential bulk tonnage target possibly
suitable for heap leach processing.
About Patagonia Gold
Patagonia Gold Plc is a mining company that seeks to grow
shareholder value through exploration, development and production
of gold and silver projects in the southern Patagonia region of
Argentina. The Company is
primarily focused on three projects: the flagship Cap-Oeste
project, the nearby COSE project and the Lomada heap leach project,
which is generating free cash flow. Patagonia Gold, indirectly
through its subsidiaries or under option agreements, has mineral
rights to over 220 properties in several provinces of Argentina and Chile, and is one of the largest landholders
in the province of Santa Cruz.
Patagonia Gold is listed on the AIM market of the London Stock
Exchange under the symbol PGD and on the Toronto Stock Exchange
(TSX) under the symbol PAT.
Matthew Boyes,
(BSC. Geology, Fellow AusIMM) Chief Operating Officer for Patagonia
Gold PGSA and a qualified person as defined in Canadian National
Instrument 43-101, has reviewed and verified all scientific or
technical mining disclosure contained in this news release.
Cautionary Note Regarding Technical and Forward-Looking
Information
The Company's production decision in respect of the Lomada project
is not based on a feasibility study of mineral reserves
demonstrating economic and technical viability and therefore
readers are cautioned that there is increased uncertainty and there
are economic and technical risks of failure associated with such
production decisions.
This news release may contain certain
information that constitutes forward-looking information within the
meaning of applicable securities laws. Forward-looking information
is frequently characterised by words such as "plan," "expect,"
"project," "intend," "believe," "anticipate" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. Forward-looking information includes, but is not
limited to, statements about strategic plans, mineral resources
estimates, spending commitments, forecasts of free cash flow,
future operations, results of exploration, commencement and
completion of pre-feasibility studies, future work programs,
commencement production, production schedules, capital expenditures
and objectives. Forward-looking information is based on the
opinions, expectations and estimates of management at the date the
statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking information. These factors include the inherent
risks involved in the exploration and development of mineral
properties, the uncertainties involved in interpreting drilling
results and other geological data, fluctuating metal prices and
other factors described above and in the Company's most recent
annual information form under the heading "Risk Factors," which has
been filed electronically by means of the Canadian Securities
Administrators' website located at www.sedar.com. The Company
disclaims any obligation to update or revise any forward-looking
information if circumstances or management's estimates,
expectations or opinions should change. The reader is cautioned not
to place undue reliance on forward-looking information.
SOURCE Patagonia Gold plc