Continental Gold Garners Backing for Buriticá Project in Colombia

Continental Gold announced sales of company common shares to Newmont Mining and RK Mine Finance Master Fund I (Red Kite) having a combined value of $136 million. Continental will use the funds to advance its underground Buriticá gold project in Antioquia department, northwest Colombia, where formal construction is scheduled to begin before year-end 2017.

The Newmont transaction is valued at $109 million and will give Newmont an approximate 19.9% interest in Continental. In addition, the companies will form a strategic alliance to evaluate opportunities to partner on exploration of Continental’s other properties in Colombia.

The Red Kite transaction is valued at $25 million and will provide Red Kite an approximate 4.6% interest in Continental. The Buriticá project is located approximately 72 kilometers (km) northwest of the city of Medellín. Road access to the site from the city is about a two-hour drive on paved Highway 62. The terrain in the project area is mountainous, characterized by steep-sided valleys and subdued peaks with elevations ranging from a low of around 600 meters (m) to the east in the Cauca river valley to a maximum of 2,200 m above mean sea level.

The Buriticá deposit consists of two major vein systems that remain open along strike and at depth. Proven and probable reserves total 3.7 million ounces (oz) of gold and 10.7 million oz of silver in 13.7 million metric tons (mt) at grades of 8.4 grams/mt gold and 24.3 g/mt silver. Production over a 14-year mine life is forecast to average 253,000 oz/y of gold and 466,000 oz/y of silver at a total cash cost for gold of $411/oz, net of silver credits. Project capital cost, including contingency, is estimated at $389 million.

Continental is targeting commercial production at Buriticá to begin in early 2020. The Buriticá project mine plan is based on a multiple-ramp-access underground mining operation initially producing 2,100 mt/d of ore, ramping up to 3,000 mt/d by year three. The majority of the mineral reserves will be mined by longhole open stoping (58% stoping plus 25% stope development) on 15-m sublevels and overhand cut and fill (15%). Some shrinkage stope extraction will be used for narrower, isolated veins.

The processing plant flowsheet is based on conventional technology and equipment, processing 3,000 mt/d. Processing steps will include crushing, grinding, gravity concentration, cyanide leach, counter-current decantation, Merrill Crowe extraction, and on-site refining to produce doré bars. Treated tailings will be dewatered by filtering prior to disposal, and process water will be recycled to minimize environmental impact.

Regarding Newmont’s investment in Continental Gold, Newmont President and CEO Gary Goldberg said, “We’re investing in a world-class asset and exploration prospects in alignment with our goal to create long-term value for shareholders. We’re impressed with the quality of the Buriticá deposit, the caliber of the management team, the community’s support for the project, and the prospects for future growth. Our team is looking forward to joining forces with Continental to make the most of these opportunities.”

As featured in Womp 2017 Vol 06 -