GOLDCORP INC. (TSX: G, NYSE: GG) and Andean Resources Limited announced today the approval of the Environmental Impact Assessment by the Santa Cruz province in Argentina for the development and production of the Cerro Negro gold project, a high-grade world-class deposit located on the low-elevation Patagonian plains of southern Argentina.
The permit enables Goldcorp to commence mine construction immediately following the transfer of ownership on December 30, 2010.
"The successful permitting of Cerro Negro is a positive first step in what we expect will be an efficient and straightforward construction process," said Chuck Jeannes, Goldcorp President and Chief Executive Officer. "Cerro Negro's ideal physical setting and easily accessible veins will result in near-term, cash flow-accretive gold production at a relatively small capital investment. Moreover, recent discoveries of high grade veins and extensions of existing veins form the basis for the analysis of a much larger gold production profile than originally contemplated. We look forward to Cerro Negro's development into Goldcorp's next cornerstone gold asset."
An update to Andean's July 2010 feasibility study is currently underway that will reflect recent drilling success. The update, which is expected to be completed at the end of the first quarter 2011, is analyzing a doubling of mill capacity to approximately 4,000 tonnes per day to process ore mined concurrently from the Eureka and Marianas vein systems. Detailed engineering and subsequent permitting amendment efforts will follow immediately afterward.
The Cerro Negro site team in Argentina continues to make good progress in advancing the project. The decline into the high-grade Eureka vein, which will comprise the first source of mill feed upon initial production in 2013, has reached over 630 meters in length. Upgrades to the main access road and camp expansion will commence early in 2011. Geotechnical work for the mill and associated facilities will commence shortly. Orders for long lead time items including the mills and crushers will be placed following the completion of the feasibility study update at the end of the first quarter of 2011.
Exploration plans for the first half of 2011 include in-fill and extension drilling of the San Marcos vein discovered in late 2009 and the two Mariana veins (Central and Norte) discovered in 2010. Several new prospect areas with known gold mineralization have been identified within the 215 square kilometer property and testing of these new vein targets will commence in the second quarter of 2011. An updated reserve and resource calculation for Cerro Negro will be available in early February with Goldcorp's annual reserve and resource update.
Key dates remaining under the timetable as detailed in the transaction Scheme are as follows:
- December 16, 2010 - Record date for Andean shareholders determining election of cash and shares.
- December 30, 2010 - Scheme implementation; consideration payable delivered to Andean shareholders.
Source: GOLDCORP INC.