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. Phase 2 production is expected to require single-stage crushing and agglomeration prior to leaching due to the fine-grained nature of the ore. The mine’s technical report, dated January 2016 and prepared in accordance with NI 43-101, estimates Measured and Indicated oxide resources of 143.1 million tonnes with an average gold grade of 0.50 g/t, containing 2.28 million ounces of gold. Proven and Probable oxide reserves total 111.9 million tonnes with an average grade of 0.53 g/t, containing 1.91 million ounces of gold. Gold recovered in doré over the ten-year mine life is estimated to be 1.5 million ounces. Construction of the Shahuindo mine commenced in mid-2015, with commissioning of the mine and processing facilities in the fourth quarter of 2015. The Company anticipates achieving commercial production at Shahuindo in the second quarter of 2016.
The Shahuindo project 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. 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 port sites for project development support are the Port of Callao (Lima) and the Port of Paita in the north. The Shahuindo project can be accessed from the Port of Callao by traveling north from Lima. From the Port of Paita, the project can be accessed by traveling south on Highway 1 to Ciudad de Dios, then to site via Cajamarca. Ciudad de Dios is approximately 350 kilometres south of Paita. Cajamarca is roughly 180 kilometres from Ciudad de Dios.
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 999.7 millimetres. Temperatures range from 15.7 C to 23.1 C during the day and may decrease to 7.5 C overnight. Wind speeds range from 0 to 3.1 metres per second with a prevailing east by northeast direction.