Highly encouraging testwork paves way for Scoping Study
Colombian-focused gold explorer, Los Cerros (ASX:LCL), has described results from metallurgical testwork at the Quinchia Gold Project’s Tesorito deposit as “highly encouraging”.
LCL has a substantial bank of established resources at Quinchia and the company is now focussed on creating value through building confidence in these resources.
We note that LCL offers substantial leverage to the upside — it is trading on a very low Enterprise Value of <$4M, with existing funds of ~$14M (as at 28 June) and a current market cap of $18.2M.
This first round of Tesorito metallurgical test work was designed to assess physical and metallurgical characteristics of the major lithology types in the Tesorito deposit, and to assess amenability to conventional grinding, gravity, and leach/adsorption processing routes.
Results included:
- 97% recovery of gold from saprolite and 87% from other units (derived from 24 hour whole ore gold leach tests);
- An optimal grind size of p80 ~75 micron, which is fine grind and typical of porphyry gold ores;
- Deleterious elements such as arsenic, mercury, organic carbon and soluble copper are all low and of no processing concern.
LCL also noted that silver recoveries and commentary on potential processing pathways are pending and that gravity beneficiation would add no benefits so is not a required step.
These encouraging met’ test results are an important step to building a PEA (Preliminary Economic Assessment) around the project’s potential production scenarios.
LCL has outlined three broad production base case configurations to be investigated under the PEA framework.
- Plant designed and sized based on the Miraflores Underground Reserve. Subsequent expansion or modifications in outer years to then accommodate new materials from other sites within Quinchia (including Tesorito).
- Plant designed and sized on Miraflores (as above) plus a potential high grade starter pit at Tesorito, incorporating additional feed in later years.
- Plant sized and designed based on Total Quinchia Resources.
The completion of the PEA will go towards LCL meeting our Objective #3 for the company for this year: Commence scoping studies, as outlined in our LCL Investment Memo.
