PanTerra Gold (ASX: PGI) has increased its land holding in the Dominican Republic, acquiring two concessions close to the company’s Las Lagunas Project which are highly prospective for precious and base metal mineralisation.
The company has finalised the acquisition of Vancouver based Novus Gold Corporation, issuing 18.4 million shares to Novus shareholders under a one for three agreement.
Novus holds two highly prospective concessions close to PanTerra’s Las Lagunas project in the Dominican Republic through its subsidiary Invercropolis; the La Yagua Project and the La Paciencia Project.
Preliminary exploration at the 99 square kilometre La Yagua project has identified significant precious and base metal mineralisation in five targets.
Grab samples at the project graded up to 18% copper, 13 grams per tonne (g/t) gold and 29g/t silver.
The mineralisation is strata bound Volcanogenic Massive Sulphide type, the same as Perilya’s (ASX: PEM) producing Cerro de Maimon copper-gold mine, which is 19 kilometres along strike from La Yagua.
Meanwhile, La Paciencia covers 86 square kilometres, 10 kilometres east of the plus-25 million ounce Pueblo Viejo project, is being redeveloped by Barrick Gold Corporation (NYSE: ABX, TSE: ABX) and Goldcorp (NYSE: GG, TSE: G) for more than US$3 billion.
La Paciencia has the same underlying geology as Pueblo Viejo, and prospecting has identified elevated gold values along structural lineaments.
Las Lagunas production imminent
PanTerra is nearing cash flow at Las Lagunas, following the start of commissioning of the process plant in January, with the first gold pour expected in May.
The Las Lagunas project involves the reprocessing of high grade gold and silver refractory tailings from the Pueblo Viejo mine, derived from open pit operations between 1992 and 1999.
Las Lagunas is expected to produce about 69,000 ounces of gold and 630,000 ounces of silver per annum.
In March, PanTerra enhanced the economic forecast for Las Lagunas, confirming a profit sharing arrangement with the Government of the Dominican Republic.
Based on an average gold price of US$1400 per ounce for unhedged production, and a silver price of US$28 per ounce, over the 6.5 year project, the net present value is now forecast to be about US$272 million, at a 10% discount rate.
Free cash flow to PanTerra from the project is expected to be around US$312 million.