Ascot Mining Monday announce that its subsidiary, Veritas Resources CR SA, has signed a Joint Venture Agreement with the owner of La Toyota Gold Concession in Costa Rica that will contribute to a substantial increase in the Company’s planned gold production.
The Agreement between Veritas Resources and Auro Magra CR SA, the owner of La Toyota, underlines Ascot’s stated objective of aggregating multiple gold mining concessions within the Costa Rican Gold Belt. Under the Agreement, Veritas Resources will earn a 50% interest in the Joint Venture.
The company said La Toyota is located in the “Gold Mountain Country”, Puntarenas, Costa Rica, which lies close to and North West of the Company’s other operations at Tres Hermanos, El Recio, Boston and Chassoul. La Toyota is serviced by paved roads and is readily accessible from the Company’s existing operations.
There are four hydrothermal parallel veins approximately 300 meters apart on La Toyota concession; La Toyota, El Angel, Anarchy and Felix. The initial development will be of the Toyota vein which is 4 meters wide near surface, dipping at 85 degrees and narrowing to 1.5 meters nominally about 10 meters below surface. This vein extends for more than 1 kilometer and its horizontal limit has not yet been fully established. According to the Mining Department of the Costa Rica Government, the Toyota vein hosts “proven but not yet 43-101 compliant” reserves of 666,190 tons at an average grade of 0.48 oz/ton or 319,770 oz of gold.
Commencing in early 2010, production from La Toyota will significantly contribute to Ascot achieving its forecast of 100,000 ounces of gold per year within the next three to five years, it said. The additional projected contribution from the Toyota vein (the first to be developed) is:
Year 1: 7,500 ozs - Net to Ascot: 3,750 ozs (Revenue $3,200,000 @ 95% purity @ $900/oz)
Year 2: 14,500 ozs - Net to Ascot: 7,250 ozs (Revenue $6,200,000 @ 95% purity @ $900/oz)
Year 3: 18,000 ozs - Net to Ascot: 9,000 ozs (Revenue $7,700,000 @ 95% purity @ $900/oz)
It is expected that the other three veins will display similar characteristics which underlines the potential of the La Toyota property.
The company said that all permits are in place. Construction of the mill and associated infrastructure has commenced and initial mine development is proceeding. The concession is permitted for 150 metric tonnes per day of mill throughput. The initial mill capacity will be 50 metric tonnes per day, increasing in two planned stages to full capacity.
Under the Agreement, Veritas Resources, as Operator, will bring into production a 50 metric tonne per day mill and develop mining operations capable of sustaining the plant at capacity at which time the Company will be vested as to 50% in the Joint Venture. Capital costs to Veritas Resources are estimated at $1 Million.
Most of the plant and equipment is already on site.