Cerro Dorado Gold Plant
The Cerro Dorado Gold Plant is located in the mining district of Caraveli, Arequipa, Peru some 42 kms up the Atico Valley from the coastal town of Atico. It is located adjacent to the Rey Salomon gold mine, and is held by Cerro Dorado SAC ("CD"), a Montan company. The site is readily accessed by vehicle as the route to the site comprises mostly of paved highway (the last 5 km comprises unpaved but well-used and well maintained roads), and the site is well developed for access and on site roads with an excellent 45 person all-season camp.
There are no competing formal toll mills in the valley where the CD plant is located (see map below) and the plant enjoys a prime location advantage for local miners as it is much more accessible than the toll milling centers in Chala and Nazca (130km & 290km respectively), implying that local miners will save US $25 - $40/T in transport costs by processing at the Cerro Dorado plant vs. transporting mineral out of Atico valley. The region east of Cerro Dorado is presently a major supply center for the numerous mills in Chala and the company counts +450 tonnes per day of mineral in trucks passing our front gate bound for Chala and Nazca.
A key aspect of the planned business is security of mineral supply: Montan's Peru GM (Jose Luis Garcia) was former commercial manager and buyer for Peru's largest private toll milling company, and Jose Luis has been involved in the formalization of a number of artisanal miners and co-operatives. His network and reputation for fair dealing played a significant role in the growth trajectory of his last company and he has deep relationships with desirable product suppliers in the area around Cerro Dorado. Our contact with area suppliers has confirmed a strong willingness to do business with the mill located at Cerro Dorado based on its advantageous location.
The mill was constructed by a former property owner to process gold ore planned for small scale production from the Rey Salomon mine. In order to process third party material the plant requires the addition of a truck weigh scale, run-of-delivery stock-pile and reception facilities, and commercial-ready assay laboratory facilities. Montan has a detailed plan, with costings, for the build out of these and enhanced security facilities and systems, including the build-out of a flotation sub-circuit (to enable processing of cuprous mineral supply) and substantial additional tailings facilities: the plan and estimates have been reviewed by Ausenco (located in Lima). Subject to the implementation of certain corrective measures and cost adjustments identified by Ausenco, the plant is judged to be ideal for the planned purpose. The plan includes a scale up from the current 45 tonne per day ("tpd") carbon in leach ("CIL") facility to 115 tpd, and a fully burdened OPEX budget plan.
MNY accomplishments through the acquisition of Cerro Dorado include a permitted plant expansion to 115 TPD (115 TPD CIP & new 60 TPD flotation circuit) and completion of the merger of OFFiR (underlying property owner) into Cerro Dorado SAC.