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Patagonia Gold to go underground at Cap Oeste

Patagonia Gold says it’s received a provisional permit to proceed with developing its majority-owned Cap Oeste gold-silver underground project in Argentina.
Patagonia Gold to go underground at Cap Oeste Patagonia Gold to go underground at Cap Oeste Patagonia Gold to go underground at Cap Oeste Patagonia Gold to go underground at Cap Oeste Patagonia Gold to go underground at Cap Oeste

The depleted openpit at Patagonia Gold’s Cap Oeste project in Argentina

Staff reporter

CEO Christopher van Teinhoven said the company planned to focus on a high-grade portion of the resource hosted in a "Cose-style" breccia setting, under the depleted openpit.

It had mothballed its Cap Oeste and Lomade de Leiva mines in the Santa Cruz province early in 2019 but the pair continued to generate cashflow from residual leaching.

Patagonia received a preliminary environmental permit for mining and leaching at Lomada in October and van Teinhoven said at the time they were excited about the opportunity to resume operations.

At Cap Oeste, Patagonia planned to truck the ore 150km to its Martha plant, which it acquired through last year's reverse takeover of Hunt Mining

"The 2018 Capo mineral resource contains a higher-grade component of 478,000t of indicated mineral resources, grading 12.6g/t gold and 472g/t silver and containing 194,000oz of gold and 7.3Moz of silver," van Teinhoven said.

"At a 3g/t gold-equivalent cut-off grade, the high-grade mineralisation contains over 190,000 gold and 7.2 million silver ounces, attesting to its robustness even at much higher cut-off grades."

Santa Cruz's state-owned Fomicruz owns 5% of Cap Oeste.

Patagonia Gold is held 60.5% by management and insiders.

It reported a gross profit of US$0.8 million for the June quarter and had produced 2,268oz of and 36,760oz of silver.

Its shares (TSXV: PGDC) have risen from C4c a year ago to a recent high of 19.5c.

They closed up 7.7% yesterday to 14c, to capitalise it at $50.6 million (US$38.8 million).