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Choco 10 expansion could land it among world top 25 gold mines-Rusoro

A preliminary study suggests production levels that could place Venezuela's Choco 10 gold mine among the world's top 25 gold mines.

Author: Dorothy Kosich
Posted: Wednesday , 20 May 2009

RENO, NV -

A preliminary study of Rusoro Mining's Choco 10 gold mine reveals a possibility to increase gold production to 500,000 ounces annually over a 12-year mine life.

The scoping study by Micon International evaluated the potential for expansion of Choco 10 by the end of 2012.

The study estimated a life-of-mine cash cost estimated of US$331/oz and an expansion cost of $208.5 million plus contingencies of $30.8 million and sustaining capital of $80.3 million over the life of the mine.

Rusoro bought Choco 10 from Gold Fields in November on 2007. In the study, Choco 10 and the nearby Increible 6 deposits were designed as open-pit mines with a two-year construction phase.

With the current resource base of the two projects, the anticipated life of the expanded mine is 12 years with an optimal mill throughput of 20,000 tpd. Gold production would average 558,200 ounces a year after the expansion.

The study base case valuation assumes a constant gold price of $700/oz over the full life of the project.

In a statement, Andre Agapov, the CEO of Rusoro, said, "The production levels estimated in this study would place the expanded Choco-10 - Increible 6 in a category within the top 25 gold producing mines worldwide."

George Salamis, Rusoro's president, said, "We have an aggressive plan to move the Choco 10 expansion to production by the end of 2012. During the next nine months we will be focused on completing the Definitive Feasibility Study, optimizing the capital program and will be seeking the necessary permits for this four-fold production expansion."