- Los Filos Mine produced 89,983 oz of gold during the six-months
ended June 30, 2017, which includes
43,980 oz following Leagold's acquisition of the mine on
April 7, 2017
- Leagold is optimizing the Los Filos operations with a focus on
changes that result in significant and sustainable cost-savings.
Two of the many initiatives underway include reinstalling the
agglomeration drum to improve gold recovery rates and extending the
overland conveyors to deliver crushed ore more efficiently for
stacking onto Heap Leach Pad 2
- Bermejal underground expansion project is proceeding as planned
with 10 drill rigs advancing the 56,000 metre infill and step-out
drilling program (see July 13, 2017
news release) and the recent completion of a portal location and
decline design trade-off study
- Los Filos is the first acquisition of our Latin American 'buy
and build' strategy and is proving to be an excellent cornerstone
asset
VANCOUVER, July 17, 2017 /CNW/ - Leagold Mining Corporation
(TSX-V: LMC) ("Leagold" or the "Company") announces Q2 2017 gold
production at the Los Filos Mine of 46,098 oz, which includes
43,980 oz from April 8, 2017 to
June 30, 2017. AISC per ounce and
additional operating details will be reported in the Q2 2017
financial results to be released in mid-August. Leagold ended Q2
2017 with a strong cash balance of $65.4
million and operations being cash flow positive.
Table 1: Los Filos Gold Production and Sales to June 30, 2017 (ounces)
|
Gold
Production
|
Gold Sales
|
Q1
2017
|
|
43,885
|
|
42,471
|
|
|
|
|
|
April 1 – April 7,
2017
|
2,118
|
|
0
|
|
Leagold Ownership
(April 8 to June 30, 2017)*
|
43,980
|
|
54,010
|
|
Q2
2017
|
|
46,098
|
|
54,010
|
|
|
|
|
|
Half-year
total
|
|
89,983
|
|
96,481
|
*
Leagold acquired the Los Filos Mine on April 7, 2017
|
Neil Woodyer, CEO stated "When
we acquired Los Filos three months ago, we anticipated that it
would take us approximately six months - Q2 and Q3 – to transition
the mine and to operate it in the way we believed it should
be. We also expected, that during this transition phase, we
would plan the development of the Bermejal Underground mine
expansion project. We are now half-way through this period
and we have made very good progress. Furthermore, we now
expect significant production and cost improvements will be
reflected in the results of Q4 and onwards.
Whilst both open pit and underground mining activities have
shown significant improvements, gold production in Q2 was affected
by mine planning and heap leach pad management issues. These
issues will continue into Q3. Some duplication of administrative
costs was also incurred during the transition period, but most
administrative services that were previously carried out by
Goldcorp's Mexico City office have
now been transferred to the mine. We are focused on reducing
costs, improving accountability, and generating cashflow and we are
implementing several sustainable operational changes under a
substantially new mine management team at site.
We have also started two capital investment projects –
refurbishing and installing an agglomeration drum at an estimated
cost of $1.3 million and extending
the conveyors to deliver crushed ore more efficiently to Pad 2 at
an estimated cost of $5
million. These capital projects are expected to
improve production and cost performance starting in
2018.
We are also completing a comprehensive review of Los Filos'
current operating plan and expect to be able to provide full
guidance on H2 2017 production and costs in mid-August, when we
report our Q2 financial results.
Also, as recently reported, the Bermejal Underground
expansion project is progressing well with the positive results
being received from the infill and step-out exploration drilling
program and with engineering studies preparing for underground
development."
Los Filos Operational Improvements Initiated by Leagold
During Q2 2017:
Open Pit Mining Fleet Utilization - To further
reduce the cost of the open pit operations, several activities were
initiated to improve the utilization rate of the mining
equipment. This included enhanced drill and blasting
sequencing and improved haul truck and loading equipment
maintenance to increase productivity levels. Average daily truck
utilization rates have increased from approximately 55% to 80%, and
further improvements are expected. The mining fleet
maintenance contract has been renegotiated to be more effective and
thus improving availabilities.
Underground Mining Improvements - Several
improvements were initiated at both the North (Leagold operated)
and South (contractor operated) Los Filos Underground mines to
increase production and reduce costs. At the North mine,
extensive operator, maintenance, supervisory and technical services
training programs have now been implemented. Additional mining
equipment has been purchased for improved ground support
capability, mechanized loading of explosives and for mechanized
placement of Cemented Rock Fill (CRF). New infrastructure has
been completed to allow for mechanized preparation of CRF. CRF
results in improved productivity and ground support and will enable
implementation of underhand cut and fill mining methods. This
was based on a successful underhand cut and fill trial program in
late 2016 /early 2017 which demonstrated improved safety, less
dilution and improved ore recoveries. Stope heights have also
been increased to 4 metres from 3.5 metres, effectively reducing
one access cut per stope block. Improvements to drill
patterns as well as the explosives loading and blast sequencing
have increased the advance per blast, as well as reduced dilution
and overbreak. Shift times have been changed to improve
productivity. Increased attention is being given to reducing
dilution in the cut and fill mining operations by strictly
controlling the mining drive widths. These initiatives have
increased daily production since the start of 2017 by 25% to 1,100
tpd with further improvements expected during the remainder of the
year.
Heap Leaching - To improve the gold recovery on the heap
leach pad, several process improvements are being implemented
including increased lift heights, better control of flow rates,
optimization of cyanide concentration and pH levels.
Additional initiatives that were identified for potential
implementation are modification of the leaching cycle and reducing
losses of carbon fines.
Agglomeration Improvement - To improve the
agglomeration quality of the crushed ore that is placed on the heap
leach pads, Leagold is refurbishing and installing an agglomeration
drum, that was already on site but previously decommissioned, into
the processing circuit. Gold recovery from the heap should
increase due to the improved agglomeration by increasing the
percolation of the leachate solution through the ore. The
agglomeration drum was removed from the processing circuit several
years ago to de-bottleneck the processing circuit, but given the
current and planned throughput this is no longer a factor in the
Los Filos operating plan. To date, a review of the
mechanical and electrical condition of the agglomeration drum and
equipment and an assessment of the ground condition for the
building foundation at the proposed location have been
completed. An engineering estimate for construction is being
finalized. Installation of the agglomeration drum and
ancillary structures is currently scheduled for completion by
October 2017 with commissioning and
start-up immediately following.
Overland Conveyor Installation - To reduce the cost of
transportation and eliminate re-handling of crushed ore onto the
Heap Leach Pad 2, a series of new overland conveyors will be
installed to efficiently convey the ore onto the pad. These
new conveyors will replace the mine fleet trucks and
shovels/excavators that are currently hauling ore to the pad. Final
engineering layouts of the overland conveyors have been completed,
and the detailed design for fabrication has been initiated.
In addition, the agglomeration drum installation has been
incorporated into the design. The new overland
conveyors are scheduled to be fully operational in Q1 2018.
Bermejal Underground Expansion Project
The following activities to advance the Bermejal Underground
Project have been initiated in Q2:
Infill and Step-Out Exploration Drilling Program - To
further refine the extent and continuity of the Bermejal
Underground deposit, a 56,000 metre drilling program was
initiated. Infill drilling throughout areas of previously
identified mineralization and step-out drilling along the northern,
eastern and western regions of the deposit will provide improved
definition and additional resources. Progress to the end of Q2 has
approximately 12,900 metres completed, with assays on-going.
Currently, a total of eight diamond drill rigs and two reverse
circulation drill rigs are operating. A subsequent metallurgical
laboratory testing program is being planned based on gold grades
and individual rock types from the current drilling program to
improve the understanding and predictability of gold recovery by
lithology from the deposit.
Portal and Decline Study - A trade-off study was
performed to determine the optimal portal location and decline
design to provide initial access to the deposit. Multiple
portal locations were analyzed based on development costs,
construction schedules and geotechnical parameters.
The preferred portal location is at the base of the
northern end of the existing Bermejal Open Pit, where surface
mining has already been completed. This location provides the
shortest decline access to the eastern flank of the deposit (650
linear metres of development) and to the main body of the deposit
(1,600 linear metres of development). The design provides
access to the eastern flank to allow initial trial
mining. Based on this study, an engineering design of the
portal and decline was completed, and this design information was
used for permitting and in the tender packages for the portal and
decline construction bid process.
Processing Facility Trade-Off Study
To evaluate the potential increase in gold recovery from the
high-grade ore from the Bermejal Underground deposit plus ore
currently being mined from Los Filos Underground Mine, a processing
facility trade-off study was initiated. Several processing
alternatives, including tank leaching and carbon-in-leach, were
identified for further evaluation to assess whether the capital
investment in a new processing facility could be justified in order
to obtain the higher gold recoveries with these processes.
The results from this trade-off study will be used as the basis for
the next phase of engineering design.
The preliminary Q2 2017 production and other financial
information in this news release are approximate figures and may
differ from the final results included in the Q2 2017 financial
statements and MD&A.
Qualified Persons
Doug Reddy, P.Geo, Leagold's
Senior Vice President – Technical Services, is a Qualified Person
under NI 43-101, and has reviewed and approved the technical
contents of this news release on behalf of Leagold.
About Leagold Mining Corporation
Leagold is building a new mid-tier gold producer with a focus on
opportunities in Latin America. Leagold is based in
Vancouver, Canada and is listed on
the TSX Venture Exchange under the trading symbol "LMC". The
recent acquisition of the Los Filos Mine, a low-cost gold producer
in Mexico, provides an excellent
platform for growth.
On behalf of Leagold Mining Corporation
Neil Woodyer, Chief Executive
Officer
This news release contains "forward-looking statements" and
"forward looking information" (as defined under applicable
securities laws), including but not limited to plans for future
development of the Los Filos Mine. Generally, these forward-looking
statements can be identified by the use of forward-looking
terminology such as "expects", "expected", "budgeted", "forecasts"
and "anticipates". Forward-looking statements and information,
while based on management's best estimates and assumptions, are
subject to risks and uncertainties that may cause actual results to
be materially different from those expressed or implied by such
forward-looking statements, including but not limited to: risks
related to the receipt of all necessary approvals for conversion of
the Orion Subscription Receipts; risks related to the Los Filos
Mine, risks related to the successful integration of the
acquisition; risks related to international operations; risks
related to general economic conditions and credit availability,
actual results of current exploration activities, unanticipated
reclamation expenses; changes in project parameters as plans
continue to be refined; fluctuations in prices of metals including
gold; fluctuations in foreign currency exchange rates, increases in
market prices of mining consumables, possible variations in ore
reserves, grade or recovery rates; failure of plant, equipment or
processes to operate as anticipated; accidents, labour disputes,
title disputes, claims and limitations on insurance coverage and
other risks of the mining industry; delays in the completion of
development or construction activities, changes in national and
local government regulation of mining operations, tax rules and
regulations, and political and economic developments in countries
in which Leagold operates. Although Leagold has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. The forward-looking statements and forward looking
information are made as of the date hereof and Leagold disclaims
any obligation to update any such factors or to publicly announce
the result of any revisions to any of the forward-looking
statements or forward looking information contained herein to
reflect future results. Accordingly, readers should not place undue
reliance on forward-looking statements and information.
Please refer to Leagold's most recent filings under its profile at
www.sedar.com for further information respecting the risks
affecting Leagold and its business.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Leagold Mining Corporation