Herencia Resources PLC (LON:HER) has appointed Golder Associates as preferred consultant to undertake the feasibility study for the company's 70 percent owned Paguanta project.
Paguanta comprises three prospects: Patricia (zinc-lead-silver-gold), Doris (high grade copper-silver) and La Rosa (porphyry-copper). (the "Project") in northern Chile.
The work is planned will be undertaken using the offices and personnel based in Golder's Santiago office. The study would focus on the development of the high grade 'Patricia' zinc-silver-lead-gold resource and is scheduled for completion in 4Q2011.
Managing director Michael Bohm said: “Golder are a globally recognised mining and resources consulting group and were responsible for completing the scoping study for the Paguanta project during 2008. Golder have been closely involved with significant components of the technical work to date, so they are already fully 'up to speed' with the project. We look forward to finalising and approving the work program and costs in the coming weeks, thus allowing the Study to commence as soon as possible."
A fortnight ago, Herencia announced that the Paguanta project was worth US$90.4 million after an update of the project's economic model. In October it upgraded the mining inventory.
The recent upgrade increased the inventory by around a third, to 1.66 million tonnes. Consequently Herencia now gives Paguanta a net present value of US$90.4 million.
The latest economic assessment also highlighted the project’s potential to increase its value. Herencia reported to 'sensitivity' cases that estimated Paguanta’s value in the future.
The ‘Post-Feasibility’ case assumed that a further 740,000 tonnes are added to the mining inventory in 2011, in this scenario Herencia believes Paguanta could be worth US$139.5 million.
Meanwhile, the ‘Upside Case’ assumes that Herencia can double the current 1.66 million inventory, this gives Paguanta an estimated value of US$184.9 million.