Flagship Minerals sees low-cost gold production potential at Chile gold play

Flagship Minerals’ Pantanillo gold project in Chile’s prolific Maricunga gold belt is home to 65 million ounces of world-class gold deposits.

Promising metallurgical results from Flagship Minerals’ (ASX: FLG) Pantanillo gold project in Chile’s prolific Maricunga belt have revealed rapid gold recoveries exceeding 80 per cent in oxide material, cementing the project’s potential for a low-cost heap leach operation.

The company’s review of historic drill holes yielded a 79.8 per cent gold recovery in bottle roll tests from oxide material. Column leach tests reported an exciting 80 per cent recovery, suggesting the cost-effective heap leach mining is well and truly on the books.

The project hosts a non-JORC-compliant foreign estimate of 47.4 million tonnes at 0.69 grams per tonne (g/t) gold for 1.05 million ounces of gold, with most of the resource sitting in oxide material.

The oxide results look ideal for heap leaching. Flagship is eyeing dump leaching to slash costs as it would allow the company to skip crushing, screening and rehandling material at the project.

The data mirrors Rio2 Limited’s Fenix Gold Project, 40 kilometres north, which achieved 75 per cent recovery via dump leaching at 0.48g/t gold. Rio2 achieved an impressive projected all-in sustaining cost of just US$1237 an ounce (A$1850/ounce).

Flagship says Pantanillo’s similar leach kinetics signal a low-capex, low-opex pathway to production. It is now powering ahead with confirmatory test work to optimise particle size, recovery and time.

The company is also tapping into Anglo American’s recently acquired 30,000m of drilling datasets to convert its 1.05-million-ounce foreign estimate into a JORC-compliant resource.

Infill and extensional drilling is set for later this year to target oxide and sulphide upside at the project’s Pantanillo Central, Quebrada Pantanillo and Oro 52 prospects.

Flagship’s strategy is to define sufficient mineral resources that will support considerations for project development consisting of open-pit mining and heap leach processing, with an aim to produce 100,000 ounces of gold per year for more than 10 years. The leaching testwork results further confirm Pantanillo’s credentials as a large, scalable heap leach opportunity with substantial strike and down dip extension potential.

Flagship Minerals Managing Director Paul Lock

Pantanillo sits at the heart of the Maricunga gold belt, a region rich with multi-million-ounce gold deposits. The belt features more than 65 million ounces of gold, anchored by Newmont-Barrick’s 27-million-ounce Norte Abierto mine 40km southwest of Pantanillo. Kinross’s 10.7-million-ounce Maricunga project lies 25km west, and Hochschild’s 11-million-ounce Volcan deposit is just 10km northwest of Flagship’s project.

The 110-square-kilometre project area holds an array of geophysical targets linked to magnetite and pyrite that light up under magnetics.

Recent drilling of priority targets unearthed girthy intercepts such as 116m at 1.5g/t gold and 493m at 0.53g/t from 9m. The results highlight Pantanillo’s shallow scale for bulk-tonnage open-pit mining.

With gold prices soaring past $5500 an ounce, Flagship is moving to rapidly cash in on a red-hot market, touting 100,000 ounces per year production targets for Pantillo, which it acquired less than six months ago.

Flagship is leveraging its Anglo-American dataset, acquired for US$2.85 million, to fast-track the development, while it explores targets such as Pantanillo Central and T1 for broader resource growth potential. It says large alteration zones northwest of the resource and geophysical anomalies southeast signal substantial gold upside.

If Flagship confirms a low-cost heap leach operation for Pantanillo and a fresh one-million-ounce JORC-compliant resource, it could race into feasibility studies for a project that could deliver stellar economics in a booming gold market.

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