The Opportunity

The Zaruma-Portovelo district of southern Ecuador has been a prolific producer of both gold and silver for over 450 years. No records of mine production exist for the first 300 years, but since 1905, over a period of only 50 years, mining activities have produced an excess of 4.5 million ounces of gold, when the cut-off grade for ore was 14.5 g/T of gold. The district, an area of 150 km2, contains at least 15 major veins. All of these veins are currently covered by only small mining concessions of 10 to 40 hectares in surface area.

Andes Gold Corp. holds the rights to the Miranda Alto concession and has assessed the economic potential of the land. Except for the work carried out by Andes Gold and a few earlier international companies, lack of previous funding had prevented the use of modern exploration and mining methods to significantly increase reserves and to maintain historical high grades. Strike length of major veins can range up to 1 kilometer. Depth potential can range up to 1500 m where current mining has exploited only the first 200 m below surface. Andes has now obtained the necessary funding to increase reserves and upgrade the mill to increase production.

An Active Gold Mine in Development

Since 2007, Compañia Minera PL S.A. has developed to a fully equipped gold mine processing plant in Portovelo / Zaruma. The development includes the expansion of the current milling process and also the purchase of CIP tanks for the cyanide leaching process.

The company can now produce up to 100 T/d ore, but it doesn’t have the capacity to process all the production. By the end of March, 2012, the company will be at full capacity of 150 T/d (Tonnes per day).

Possibility of Expansion

The property is surrounded by several concessions. The Miranda concession is the key to the neighboring four concession areas, as it is located on a mountaintop and is connected to the most tunnels. The concession area towards the north and also the concession areas towards the south are accessible via the Miranda tunnels. Acquiring the surrounding concession will give the company a resource potential to be the biggest gold producing company in the area.