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REGIONAL NEWS - LATIN AMERICA Guyana Goldfields Commits to Developing Aurora Gold Project Guyana Goldfields Board of Directors has approved a $238 million expenditure to bring the company's Aurora gold project in northern Guyana into commercial production. Mine planning calls for production of 3.29 million oz of gold over an initial 17year mine life at an operating cash cost, including royalty, of $527/oz. The capital expenditure for the Aurora project is contingent on successful completion of project financing and other approvals, which the company expects to finalize by the second quarter of 2014. The project is fully licensed and permitted. The infrastructure build is already in progress. The Aurora project is expected to produce an average of 231,000 oz per year (oz/y) of gold over its first 10 years of operation and 194,000 oz/y over the life of the mine. Current planning calls for initial openpit production of 5,000 metric tons per day (mt/d) from the Rory's Knoll deposit and expansion to 10,000 mt/d in 2018 when underground mining begins. A ball mill will be added to facilitate the expansion. Gold grades for the Aurora project average 2.74 g/mt. The ore is free milling, with excellent gold recovery of greater than 94%. Extensive additional mineralization has been identified at depth beyond current mine planning, and there is potential to expand the currently planned open pits. Aurora project construction is anticipated to last 18 months, with commissioning of the mill beginning in the first quarter of 2015. Commercial gold production is targeted for mid-2015. Guyana Goldfields is examining opportunities to reduce the capital expenditure for the Aurora project, including contract mining and third-party ownership and operation of the power plant. The company is also reviewing the potential of extending open-pit production and deferring the capital required for the planned underground expansion. Guyana Goldfields has executed a heads of agreement and term sheet with a joint venture of Sedgman Ltd. and Graña y Montero documenting the principal terms and conditions for a full engineering, procurement, and construction contract for the Aurora project's initial processing facility and power plant. The agreement calls for a "notto-exceed" expenditure of $137 million. Pan American Silver Expanding La Colorada Pan American Silver is expanding its La Colorada silver mine in Zacatecas, Mexico, based on the positive results of a preliminary economic assessment (PEA). The PEA contemplates an increase in La Colorada silver production from approximately 4.7 million oz/y currently to 7.7 million oz/y by the end of 2017 for an incremental capital investment of $80 million, the majority of which will be spent over the next three years. The La Colorada project includes construction of new mining infrastructure; development of new mining zones to reach deeper, higher-grade areas of mineralization; and expansion of the sulphide ore processing plant. The project will be built progressively, ramping up from the current Worker accommodations under construction at Guyana Goldfields' Aurora project in northern Guyana. 12 E&MJ; • JANUARY 2014 mining and processing rates of 1,250 mt/d to 1,800 mt/d by the end of 2017. A new 600-m-deep shaft will be raise bored between La Colorada's main Candelaria area and its Estrella area. Pan American reported that a new shaft would have been required over the long term whether or not the company had decided to proceed with the expansion. The shaft will increase hoisting capacity to 2,300 mt/d, accommodating ore and waste extraction as well as serving as the main access to working areas. Preliminary engineering work for the new shaft and hoist has been completed, and detailed engineering will begin in early 2014. Construction of the shaft is scheduled to start early in 2015, following completion of sufficient underground development around the shaft bottom. Commissioning is scheduled for the later part of 2016. The shaft will be designed such that it can be deepened in the future if justified by future exploration success. The La Colorada expansion plan contemplates production down to the 740 level in the east side of the Candelaria area, more than 200 m below the current deepest 528 mining level, and down to the 610 level of the Amolillo vein, nearly 250 m below the current deepest 365 mining level. Mining at both the Estrella and Candelaria areas will continue to utilize the cutand-fill methods currently employed. The expansion plan includes the addition of 22 new pieces of mining equipment to the fleet and the hiring of more than 100 additional mining personnel. The capacity of the mine's ventilation and dewatering systems will be increased to handle the mine's hot and wet ground conditions as mining operations extend at depth. La Colorada's processing plants currently produce doré bars from a conventional cyanide leach plant for the oxide ore and silver-rich lead and zinc concentrates from a flotation plant that treats the sulphide ore. Both circuits currently share a single crushing plant. While the oxide plant will not be modified due to La Colorada's oxide production remaining at current levels for (Continued on p. 24) www.e-mj.com