Gold Resource Corp has been granted a positive Record of Decision (ROD) on the Environmental Assessment (EA) for the Isabella Pearl open pit heap leach gold project located in Mineral County, Nevada, USA. This final permit, along with approval from the company’s Board of Directors to move the project into production, mark a major milestone for the company’s Nevada Mining Unit. Gold Resource Corp is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA.
In addition to the ROD and EA permit, the Plan of Operation (POO) for the project has been approved by both the Bureau of Land Management (BLM) and Nevada Department of Environmental Protection (NDEP). With these final permits, along with permits for mercury, water, air and other ancillary permits already in place, Gold Resource has all the regulatory approvals necessary to construct, operate and pour dore at the project.
The project’s Proven and Probable Reserve total 192,600 oz gold and targets to produce some 153,000 oz over an initial four-year mine life. It estimates annual recovered gold of: 29,000 oz year one, 41,000 oz year two, 41,000 oz year three and 42,000 oz year four. An average cash cost of $650/oz (plus or minus 10%) is estimated over the initial four-year mine life with annual costs projected to decline year-over-year as higher grades are mined and strip ratios decrease. The company anticipates adding to the reserves with future exploration drilling and has identified two new exploration targets within the existing permitted mine plan, Scarlet and Civit Cat North, along with numerous exploration targets along the company’s Isabella Pearl claims covering 9.6 km of structural trend.
Initial capital expenditure (CAPEX) for the project is estimated at $30 million. The company has already spent approximately $10 million towards the poject with cash and equipment financing, having secured a new Telsmith crusher, Superior conveyors and stacker and a Scotia International ADR dore process plant, which are all 100% complete, mobile and ready to be set up once the site and foundations have been prepared.
The Board of Directors has approved moving forward immediately by initially drawing on the Corporate treasury ($28.6 million at March 31, 2018). The future CAPEX is targeted to fund from cash and operational monthly cashflow. The company anticipates alternative funding would be available, if required, through equity and/or potential debt facilities. Total construction time to build the Isabella Pearl project is estimated at less than 12 months from the point of breaking ground. Management is moving towards that first ground breaking as soon as possible after the required project bond is in place and providing the BLM the required two-week notice to commence construction.
The company has chosen its third-party mining contractor for both the heap leach pad construction and contract mining of the Project. The heap pad contract is in final review and is expected to be signed shortly followed by the mining contract.
“This is an exciting milestone and time for shareholders and our Nevada Mining Unit,” stated Jason Reid, CEO and President of Gold Resource Corp. “We are pleased to have successfully navigated the permitting process and now shift our efforts to construction of our first Nevada gold project, the Isabella Pearl. We are currently in a strong cash position and focused on completing this project with cash and cashflow if possible. This goal will require metal prices and operations to continue as they have thus far this year. While we have other funding alternatives available if needed to help us overcome unforeseen challenges or metal price volatility.
“The project targets more than doubling the company’s annual gold production profile with material, substantial and accretive gold ounces. With the Isabella Pearl Project at full production, the consolidated precious metal gold equivalent ounce production could potentially push over 90,000 oz/y at a 74.1:1 silver to gold ratio, based on 2017 production totals. It will take a bit of time to fully mobilize equipment to the project, but once construction activities commence, the company targets first gold production at Isabella Pearl in less than 12 months.
“We view Isabella Pearl as the first of several potential operating projects from our Nevada Mining Unit’s profile of potential high-grade gold properties. We believe both the State of Nevada and the local communities in which we operate will benefit from the positive economic impact from our operations.”