Goldsource Mines sells first Guyana gold

Goldsource Mines Inc. [GXS-TSXV] reported on Phase I commissioning activities at its 100%-owned Eagle Mountain Gold Project located in Guyana, South America. Outlined below is a summary of the most significant activities completed year to date including start of commissioning, the first metal pour and first gold sale.

Phase I is based on a Preliminary Economic Assessment (PEA) dated June 15, 2014, which calls for a 1,000 tonnes per day (tpd) open pit – gravity plant with post-commissioning and ramp up cash operating costs of US $500 to US $600 per ounce of gold.

Yannis Tsitos, President, said, “We are very pleased with our progress during Q1, 2016. All major equipment continues to operate well in both dry and wet conditions. Onsite personnel have been able to maintain infrastructure with minimal cost and disruption to operations. The Company expects to add a second excavator in Q2, 2016 and with planned installation of a larger feed pipe to the scrubber, the Phase I design rate of 1,000 tpd of continuous production at Eagle Mountain should be achieved in Q2, 2016. We currently have CAD$1.4 million to meet our working capital requirements and complete planned expansion over the next several months.”

Commercial production is anticipated in the second quarter of 2016, which will require achieving 80% of the 1000 tpd nameplate capacity and 45% recovery in gold concentrate on average over a period of 30 days.

Highlights for Year to Date (Commissioning-Stage)

• Start of commissioning on January 28, 2016.
• In February and March, re-designed and re-fabricated the mine grizzly and processing gold room.
• Mined an estimated 17,919 tonnes year to date.
• Processed an estimated 16,726 tonnes grading 0.76 g/t gold year to date.
• Average of 236 tpd processed year to date. So far, for April, an average of 470 tpd has been processed or 47% of nameplate capacity.
• Estimated 45% gravity recovery for the plant year to date. April recoveries are estimated to have increased to 50%.
• Estimated 58% gravity recovery from table concentrate year to date. April recoveries are estimated to have increased to 68%.
• First gold pour on March 6, 2016.
• Produced 104 ounces of gold year to date.
• First gold shipment and sale on April 14, 2016 of 81.7 ounces of gold at US$1,240 per ounce with estimated inventory of 22.3 ounces of gold.
• Estimated 40,000 man-hours worked during commissioning, with no lost time accidents.

Management continues to optimize the operation with peak daily throughput of approximately 777 tonnes processed. Estimated gravity recovery to concentrate increased from an estimated 40% in February to currently 50%. The average tpd from April 1 to April 17 was 470 or 47% of nameplate capacity. Significant increased capacity is anticipated in the next 30 days with the installation of a re-designed larger diameter feed chute to the scrubber, which is currently limiting daily production.

The average grade of the compliant saprolite resource is 1.2 g/t gold. As anticipated, the current grades are lower at 0.6 to 0.8 g/t gold as tonnes were mined from areas close to the scrubber for testing and commissioning purposes. Mine grades should start to increase over the next 30 days as mining transitions into a higher grade portion of the resource.

With the introduction of a second excavator and other ancillary equipment, plans to start a second shift by the end of Q2 are being accelerated. Originally, the plan and budget were scheduled for a second shift in mid-Q3. With the inclusion of a second shift, tonnage throughput should be increased significantly with subsequent additional gold production.

The tailings storage facility is expected to be sufficient to support operations for the next six months before expansion is required. In addition, the Company has constructed a clarification pond to reduce water turbidity prior to planned recycling or discharge.

The company continues to evaluate the potential to utilize low impact intensive cyanide leaching of the gold concentrates to improve the overall gold recovery and production for the Eagle Mountain Gold Project.