Mundo Minerals’ CEO, John Langford, said initial site works at Engenho were to commence in late April with construction of the treatment facility scheduled to start in July, followed by mine development in October 2007. “We have lodged all the final environmental, mining and treatment approvals with the authorities in Brazil, and we are confident of securing these by early July,” Langford said. “With written approvals already in hand to commence construction and operation of our Engenho crushing circuit, we have scheduled commissioning of this component of the plant to commence in August this year.”

Information on the company’s Web site indicates that Mundo Minerals plans to re-open the Engenho mine via a trackless underground operation, driving a decline into the footwall from a point close to the pit floor. The mine would deliver 195,000 mt/y of ore to a conventional CIP treatment plant, with annual gold production forecast at approximately 30,000 oz, or 275,000 oz in total over an estimated 10-year mine life. Based on a $640/oz gold price, the project is forecast to have an average cash cost of production of $272/oz.

A very preliminary mine plan envisages the location of the bulk of the primary development within the mineralized fold limbs, which are generally of marginal grade. This will allow ready access to the thick, higher grade hinge zones and will yield development ore at an estimated mean grade of around 3 g/mt. Gold recovered from treatment of this material is expected to fully cover development costs. Drilling and extraction levels will be developed within the hinge zones at approximate 20-m vertical intervals, and the ore mined by long-hole sublevel stoping methods.

In addition to advancing pre-development activity at Engenho, Mundo also announced that it will also exercise its option to purchase the Torrecillas gold project from private interests in Peru, for $2 million, payable in stages. The company will appoint a country manager to oversee its emerging operations in Peru, including an exploration, feasibility and development work aimed at bringing Torrecillas into production within 18-24 months.

“Torrecillas has been a high-grade producer for small, private operators over many years and the surface drilling and underground channel sampling work completed over the past four months has delivered us the confidence we need to go forward with this project,” Langford said. “We have confirmed the continuity of six high-grade veins over a strike length approximately 2 km long, and will now embark on a broader exploration and feasibility program focusing on the significant commercial potential of the extensive high-grade vein system.

The Torrecillas acquisition also represents an opportunity to gain a strategic foothold in a regionally significant mining region in south east Peru with the potential to yield a number of additional production assets. A number of underground mines are currently operating in the region on narrow vein, high-grade gold deposits analogous to Torrecillas.