Karbonate Minerals' KMC-ARG-03 Mine in Salta Argentina Continues to Increase Its Profitability
Karbonate Mineral Corp.'s decision in October 2018 to buy the site, now named KMC-ARG-03, from a local mining consortium for $5.1 million U.S. Dollars was done when gold had been hovering around the $1,200 to $1,300 U.S. Dollars an ounce for nearly 5 years and the previous owners were losing nearly $3 million U.S. Dollars a year in keeping it open.
In just over 5 years Karbonate Mineral Corp. has increased capacity by over 300%, and recently announced additional deposits which could yield a further 20,000 ounces in gold at a time when gold has established a price of over $1,900 an ounce.
"When we first took over the site, we knew of its potential but also understood that it was going to take an enormous effort for us to achieve what we knew it had to offer us as a company," said Charles Nadeau, Chairman and Chief Executive Officer of Karbonate Mineral Corp.
"In honesty, the prospect of making it profitable over the short-term didn't look very promising, but we entered into the purchase agreement on the assumptions that our production methods are extremely cost effective, the site had enormous potential outside of its existing footprint and that the gold price would undoubtedly rise over time, which it did very quickly. Within 12 months our production was at over 70% more than we forecast and gold had increase by nearly 30%. Today, our production is at over 100% of that which we first forecast, we have identified further deposits of over 20,000 ounces on the site and the gold price has now increased by nearly 65%," Nadeau added.
The company have reported that the site 'has turned out to be full of surprises'. Their initial feasibility study predicted a seven-year mine life that would have taken KMC-ARG-03 to 2025, the site now has deposits that Karbonate Minerals anticipate will add another 6 to 10 years production. The company will also soon start to pre-strip yet another satellite pit on the site which could add an additional 3 years to the mine's life, taking it to beyond 2030.
"We always knew the site had great potential and all the geologists were saying so, but it has turned out to be far more profitable than we could ever have imagined. There are enough stories out there about deposits yielding far fewer ounces than people expected, and this is one of the cases where that whole complex keeps yielding more and more ounces than anyone expected," said Oliver Denton Director of Projects with Karbonate Mineral Corp.
An internal economic study of the site released in late July estimates average annual production of 14,000 ounces of gold over the next five years.
