The Shahuindo gold mine is located in a prolific gold producing belt in northern Perú, 30 km north of the La Arena mine. The deposit is an intermediate-sulfidation epithermal sediment-hosted gold deposit centered around a large amplitude fold intruded by felsic stocks. The project design is an open pit mine using conventional drill/blast, shovel and dump truck operations with heap leach processing. The phase 1 mining plan is focused on ore amenable to run-of-mine heap leaching. Commercial production for Phase 1, to a capacity of 10,000 tpd, was achieved on May 1, 2106. Phase 2 production will require single-stage crushing and agglomeration prior to leaching due to the fine-grained nature of the ore. At January 1, 2017 Measured and Indicated oxide resources totaled 138.1 million tonnes with an average gold grade of 0.50 g/t containing 2.22 million ounces of gold. Proven and Probable oxide reserves are estimated at 110.3 million tonnes with an average gold grade of 0.52 g/t containing 1.86 million ounces of gold.
In 2016, a total of 48.5 thousand ounces of gold was produced at Shahuindo, which includes approximately 13.4 thousand which were produced prior to commercial production being achieved on May 1, 2016. Total cash costs and all-in sustaining costs per ounce of gold produced net of byproduct credits averaged $775 and $1,162, respectively (commercial ounces produced only).
In 2017, the Company is targeting production of between 65 and 80 thousand ounces at Shahuindo. Total cash operating costs net of byproduct credits are estimated at between $750 and $800 per ounce, with AISC targeted at $1,450 to $1,550 per ounce. The elevated level of AISC in 2017 reflects the inclusion of sustaining capital expenditures for the expansion of the mine towards full production, expected in the second half of 2018. At full production, Shahuindo is expected to produce approximately 200 thousand ounces of gold in 2019 at AISC well below $1,000 per ounce, Production over the 10-year mine life is expected to average approximately 170 thousand ounces.
The Shahuindo mine is located on the west side of the Condebamba River Valley, approximately 80 kilometres southeast of the town of Cajamarca and 15 kilometres west of the town of Cajabamba in the district of Cachachi, province of Cajabamba, department and region of Cajamarca.. The topography varies from rolling hillsides to steep ravines. Elevation across the project varies from 2,400 metres above sea level to 3,600 metres above sea level. The project area is classified as neo-tropical Peruvian “Yungas” by the World Wildlife Fund.
The climate is humid during the wet season and cold and dry during the dry season, a typical climate of the sierra region. The wet season occurs during the months of October through April, and the dry season occurs during the months of May through September. The average annual rainfall is about 1,000 millimetres. Temperatures range from 15.7°C to 23.1°C during the day and may decrease to 7.5°C overnight.