Denarius begins mining at gold-silver project in Colombia
Denarius Metals Corp. [DMET-Cboe CA, DNRSF-OTCQX] said it has commenced mining activities at its Zancudo gold-silver project in Colombia. First production is expected in the second half of 2025.
The achievement of this milestone reflects the activities carried out by the company in 2024, which have paved the way for the start-up of the its first mining operation amidst a strong rally in gold, the company said. Ore is being stockpiled by the mine contractor at site and deliveries of the ore to Trafigura Pte Ltd., under the company’s offtake contract will commence at the end of April. Meanwhile, the processing plant is expected to be operational by the fourth quarter of this year, at which time the company will produce concentrates to be delivered to Trafigura.
On Tuesday, Denarius shares were unchanged at 57 cents. The shares trade in 52-week range of 88 cents and 40 cents.
Back in October, 2023, Denarius announced the results of a preliminary economic assessment (PEA) for the Zancudo Project, which includes the historic producing underground Independencia Mine, located approximately 30 kilometres southwest of Medellin.
“The PEA affirms the robust economic viability of our planning underground operation at our Zancudo Project, generating near-term production and cash flow from a long-life asset yielding attractive returns for our shareholders,’’ said Denarius Executive Chairman and CEO Serafino Iacono in the October 2024 press release. “Material will be mined by a local mining contractor commencing in 2024 and processed by the company through conventional crushing and milling facilities, initially at a rate of 500 tonnes per day and increasing to 1,000 tonnes per day in 2025, to generate high-grade gold concentrate,’’ he said. “The PEA envisions a 10-year mine life over which the company expects to generate net revenue and approximately US$1.0 billion from the sale of approximately 576,000 payable ounces of gold and 8.8 million payable ounces of silver at a life-of-mine average all-in sustaining cost (AISC) of US$1,059 per ounce of gold.’’
The PEA is based on an updated mineral resource estimate, consisting of 4.1 million tonnes of grade 6.5 g/t gold and 107 g/t silver totaling 860,000 ounces of gold and 14.1 million ounces of silver. At a gold equivalent grade of 8.1 g/t, the inferred resources in the updated MRE represent a total of 1.06 million gold equivalent ounces.
Over the approximately 10.3-year mine life, production from the mining and processing of approximately 3.5 million tonnes of material containing 899,000 gold equivalent ounces is expected to recover 683,000 payable AuEq ounces through the sale of approximately 636,000 tonnes of high-grade gold-silverr concentrates.
The initial capital expenditure for the construction period is estimated at US$14.8 million, which includes US$2.0 million in contingency costs. An additional US$4.2 million is estimated for sustaining capital principally associated with crushing and milling facilities over the life of the mine.
In Spain, Denarius holds interest in Aguablanca copper-nickel mine via a 21% interest in Rio Narcea Recursos S.L. , which owns a 5,000 tonne per day processing plant and has the right to exploit the historic Aguablanca mine, which has recently been recognized by the EU as a strategic project.