Ausenco appointed to lead PEA of Quinchia Gold Project
Earlier today our gold Investment Los Cerros (ASX:LCL) announced the appointment of leading Australian engineering group Ausenco to develop a Preliminary Economic Assessment (PEA - akin to a scoping study) of the Quinchia Project in Colombia.
Quinchia hosts Mineral Resources of 2.6Moz @ 1.02 g/t Au spread across the Miraflores, Tesorito and Dosquebradas deposits, all within a 3km radius.
LCL is mulling three production scenarios prior to determining the favoured route for the PEA, namely:
- Treatment Plant based on Miraflores underground as the initial development - with subsequent expansion or modifications in outer years to then accommodate materials from other sites within Quinchia (including Tesorito).
- Treatment Plant based on the combination of Miraflores and a high grade starter pit at Tesorito - with incorporation of additional feed from the larger Tesorito pit shell, Dosquebradas and potential other sources in later years
- Treatment Plant based on Total Quinchia Resources.
The balancing act that LCL is considering is whether to pursue a capital light project with lower production (ie scenario 1) vs a more capital intensive but greater production capacity.
Today’s news follows recent results of Tesorito metallurgical test work that demonstrated Tesorito ore is likely to be amenable to a conventional process flow and to enjoy typical porphyry style recovery performance characteristics.
We like that LCL is very well funded with a strong cash position of over $13 million at the end of June, enabling it to continue advancing Quinchia.
We look forward to the completion of the PEA, expected before year-end. We look forward to the completion of the PEA, expected before year-end. For our detailed take on LCL and what we would like to see the company accomplish this year, here is our Investment Memo.
