(TSX-V: GXS) (OTCBB: GXSFF) (FWB: G5M)
VANCOUVER, Oct. 13, 2016 /CNW/ - Goldsource Mines Inc.
("Goldsource" or the "Company") is pleased to report the production
results for the third quarter ("Q3") and nine months ended
September 30, 2016 at its Eagle
Mountain Gold Project ("Eagle Mountain") located in Guyana, South
America.
Eagle Mountain Production Highlights Q3, 2016 vs Q2,
2016:
- Processed 34,955 tonnes; 27% decrease, reflecting a shutdown in
August.
- Average throughput of 466 tpd; 27% decrease, reflecting a
shutdown in August.
- Estimated gravity recovery to concentrate of 32%; 32%
decrease.
- 174.6 gold ounces produced; 26% increase.
- Record monthly gold production achieved in September with 136.5
ounces produced.
- 107.3 gold ounces in inventory awaiting sale (72.3 ounces sold
October 3).
Ioannis Tsitos, President,
commented, "We continue working to balance throughput volumes
with quality of recovery to achieve our goal of free cash flow from
operations. In September, we began to see an increase in gold
production with improvements in recovery of higher grade mine feed.
During Q4, we will be replacing critical pipelines and pumps for
improved efficiencies. We look forward to continued improvements in
the following months with our focus on achieving operational free
cash flow."
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Eagle Mountain
Gold Mine Statistics(2)(3)(4)
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Q3,
2016
Total
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Q2,
2016
Total
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%
Change
(Q3 vs
Q2)
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Q1,
2016
Total
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9 months Total
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Average
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Mined
tonnes
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36,282
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50,695
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(28%)
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9,814
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96,791
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Processed tonnes at
minus 2mm
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34,955
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48,098
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(27%)
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8,742
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91,795
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Average
tpd(1) processed
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466
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641
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(27%)
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162
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454
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Average estimated
gold grade, gpt
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0.99
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0.37
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168%
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0.91
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0.66
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Estimated gravity
recovery for plant
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32%
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47%
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(32%)
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40%
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39%
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Estimated gravity
recovery for table
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55%
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61%
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(10%)
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60%
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56%
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Gold ounces
produced
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174.6
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138.4
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26%
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61.9
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374.9
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Gold ounces
sold(5)
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67.3
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200.3
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(66%)
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0.0
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267.6
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(1)
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Based on 25 operating
days per month.
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(2)
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All numbers are
rounded.
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(3)
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The Company achieved
commercial production on June 20, 2016, which was defined as
achieving a minimum 80% of the 1,000 tonnes per day nameplate
capacity and a minimum 45% recovery in gold concentrate on average
over a period of 30 continuous days. Commercial production does not
imply economic viability. See "Preliminary Economic Assessment of
the Eagle Mountain Saprolite Gold Project, Guyana", dated September
12, 2014 with an effective date of June 15, 2014 (the
"PEA")
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(4)
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Processing mass
balance and reconciliation is based on daily sampling at site and
offsite gold analysis at Actlabs in Georgetown, Guyana, which is an
independent certified lab. Standard practice mined volumes are used
and drill hole assays, also from Actlabs, are used for mine
reconciliation.
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(5)
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107.3 gold ounces in
inventory.
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During Q3, 2016, Eagle Mountain processed 34,955 tonnes of
material (Q2, 2016: 48,098 tonnes), with average of 466 tpd (Q2,
2016: 641 tpd). As previously indicated in the Company's revised
production guidance (see news release dated August 25, 2016), operations were suspended on
July 23, 2016 due to low grades and a
delay in the shipment of a 40-tonne truck to site. In late-August,
the Company recommenced mining, stockpiling and processing of the
higher-grade material in Pit 4. In September, the mine operated for
29 days, processing 20,981 tonnes of material at an average
throughput rate of 723 tonnes per day. Estimated gravity recovery
to concentrate averaged 32% for Q3, 2016 (Q2, 2016: 47%).
While the average grade has improved substantially with the
arrival of the 40-tonne truck and the commencement of production
from Pit 4, optimization work to balance quantity of tonnes with
quality of recovery continues on the process plant. In September,
Goldsource retained the services of Sepro Mineral Systems Corp
("Sepro"), the manufacturer of the Eagle Mountain plant, to perform
a process audit. Sepro completed the process audit September 18, 2016 and provided recommendations
to improve the process plant performance and recovery. In addition,
Goldsource has hired an experienced process engineer to focus on
further optimization of recovery and performance of the process
plant. Preparations for a night shift have commenced, with a
partial night shift to be phased in during Q4 2016 and a full night
shift expected to be in place within the next six months.
In Q3, 2016, the Company poured 174.6 ounces of gold and sold
67.3 ounces of gold at an average realized price of US$1,321 per ounce.
Release of Third Quarter Financial Results
Goldsource plans to release its Q3, 2016 unaudited Condensed
Consolidated Interim Financial Statements and Management's
Discussion & Analysis – Quarterly Highlights after market close
on November 24, 2016. The Qualified
Person under National Instrument 43-101 - Standards of
Disclosure for Mineral Projects for this news release is
N. Eric Fier, CPG, P.Eng, and Chief
Operating Officer for Goldsource, who has reviewed and approved its
contents.
Ioannis (Yannis) Tsitos
President
Goldsource Mines Inc.
CAUTIONARY STATEMENT AND FORWARD-LOOKING
DISCLAIMER
Management's production decision for
the Eagle Mountain Gold Project is not based on a feasibility study
of mineral reserves demonstrating economic and technical viability.
This project has a much higher risk of economic or technical
failure and may adversely impact the Company's projected profits,
if any. The risks associated with this decision are set forth in
the Company's latest annual management's discussion and analysis
available on the Company's website and the under Goldsource's SEDAR
profile on www.sedar.com.
This news release contains "forward-looking statements" within
the meaning of Canadian securities legislation. Such
forward‑looking statements concern Goldsource's strategic plans and
expectations in the PEA for the development of the Eagle Mountain
Gold Project; the amount of future production of gold over any
period; cash operating costs per ounce of gold; life of mine;
estimated pre-production cost; the amount of expected grades and
ounces of metals, gold recoveries mine life and gold production
rates of the Eagle Mountain Gold Project; and expectations
regarding the Company's ability to manage capital resources and
meet working capital requirements. Such forward‑looking statements
or information are based on a number of assumptions, which may
prove to be incorrect. Assumptions have been made regarding, among
other things: conditions in general economic and financial markets;
ability to realize the PEA and develop and finance the project;
accuracy of the interpretations and assumptions used in calculating
inferred mineral resource estimates; availability of mining
equipment; availability of skilled labour; timing and amount of
capital expenditures; performance of available laboratory and other
related services; and future operating costs. The actual results
could differ materially from those anticipated in these
forward‑looking statements as a result of the risk factors
including: the timing and content of work programs; results of
exploration activities and development of mineral properties; the
interpretation of drilling results and other geological data; the
uncertainties of resource estimations; uncertainty as to actual
capital costs, operating costs, production and economic returns at
the Eagle Mountain Gold Project; reliance on the PEA; and general
market and industry conditions. Forward-looking statements are
based on the expectations and opinions of the Company's management
on the date the statements are made. The assumptions used in the
preparation of such statements, although considered reasonable at
the time of preparation, may prove to be imprecise and, as such,
readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the
statements were made. The Company undertakes no obligation to
update or revise any forward-looking statements included in this
news release if these beliefs, estimates and opinions or other
circumstances should change, except as otherwise required by
applicable law.
Neither TSX-V nor its Regulation Services
Provider (as that term is defined in policies of the TSX-V) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Goldsource Mines Inc.