Pan American Silver to step up as Rio Grande says sayonara to cyanide ban
Vancouver-based Pan American Silver Corp said on Friday it will speed up the development of its Argentina gold project this year after the Rio Negro provincial legislature lifted the ban on the use of cyanide, crucial in the extraction process of gold.
Pan American Silver (TSX:PAA)(NASDAQ:PAAS) owns 100% of the Calcatreu gold development project. The company said in a statement since acquiring the project in early 2010 as part of the purchase of Aquiline Resources, it has performed only a modest amount of new work due to the fact that Rio Negro had banned the use of sodium cyanide, which is critical to the recovery of gold from Calcatreu's mineral resource.
On December 29, 2011, Rio Negro's provincial legislature passed law Nr. 4738, which among other things, allows for the use of chemical substances, including sodium cyanide, in mineral processing. The new law replaced law 3981 that limited mining activity. The new legislation was signed, published and enacted into law on January 9, 2012 and it also established the evaluation process for the filing and approval of an Environmental Impact Assessment ("EIA"), which is necessary to mine and process minerals in the province.
Pan American says there has clearly been a positive shift in attitude towards mining and mining investment in Argentina since the recent re-election of President Cristina Fernandez de Kirchner, and it is gratifying to see Rio Negro take a leading role in responding to this change.
Pan American's President & CEO, Geoff Burns, commented, "This is a very positive development for Rio Negro and for Argentina. While the previous legislation allowed open pit mining, it banned the use of cyanide in mineral processing, effectively rendering our Calcatreu gold project uneconomic. By reversing this ban, the provincial and municipal governments have clearly reaffirmed their commitment to responsible, environmentally sensitive mining development, which will bring significant investment and the associated benefits for all stakeholders, particularly the local communities."
In 2011, Pan American Silver invested $1.7 million at Calcatreu, completing 2,932 meters of diamond drilling, mostly as confirmation holes and to collect fresh metallurgical sample materials. Results on testing performed on these materials are still pending and the Company has not yet had an opportunity to confirm and update the resource estimates, which were prepared in April 2008 by Micon for Aquiline Resources Inc. According to those estimates, the project hosts an indicated resource of 8 million tonnes grading 2.63 gpt gold and 25.7 gpt silver, with additional inferred resources of 3.4 million tonnes grading 2.06 gpt gold and 16.6 gpt silver, representing a potentially significant undeveloped gold resource within the Company's portfolio.
Pan American says in 2012, it intends to accelerate development activities at Calcatreu, which will include further diamond drilling, metallurgical testing, environmental baseline studies and preliminary engineering, as it works towards producing a Preliminary Assessment and an EIA for Calcatreu.
Calcatreu is less than 140 kilometres due north of Pan American's most important silver development project, Navidad, which is also located in the central Meseta region of Patagonia, just across the border, in the neighboring province of Chubut.
Pan American has seven operating mines in Mexico, Peru, Argentina and Bolivia. Pan American also owns the Navidad project in Chubut, Argentina and is the operator of the La Preciosa project in Durango, Mexico.