STORY INLINE POST
Q: How will the acquisition of Alderley Gold Corp impact the Metates project?
A: We purchased Alderley because we wanted to have access to a technology that will allow us to heap leach the refractory sulfide and recover the gold and silver through that process. This has many advantages for us because the process we used previously, which focused on using a more traditional pressure oxidation procedure, required a huge amount of capital to complete. The use of this new technology will have a massive impact on lowering the project’s capital and operational costs. In addition, it is more environmentally friendly because it uses less water and power. The most important advantage this technology provides, particularly when it comes to social engagement and the project’s relationship with local communities, is that there is no tailings dam associated with it.
Fortunately, this technology is ready to be deployed and does not need to undergo a significant adaptation process in Metates. This is because the technology is not necessarily new; it has been used for the last 30 years in previous versions in the copper industry. I built one of the larger sulfide heap leaches in Chile from 2004 to 2006. In that project they produced copper cathode by oxidizing the sulfide and then recovering the copper. This technology is the same concept of oxidizing sulfide in heap leach, in this case pyrite.
However, some degree of adaptation will be necessary. We need to do a fair bit of work over the next 18 to 24 months, especially on ore samples sourced from Metates, to make sure we understand how well the process works and what our final recoveries will be, along with other crucial operational variables. In a way, we are speeding up nature. Sulfides do not want to be or stay sulfides; sulfides oxidize naturally. The biggest difference between what we do and what the copper industry tends to do is that we do it in an alkaline environment as opposed to an acidic one. At the end of the day, there are multiple ways in which you can treat refractory gold, and this is the most environmentally friendly way to do it. This is what we mean when we talk about “green gold.” This means more than 90 percent less water is used. This is extremely important to surrounding communities, as water access is among the world’s most important social and environmental issues, along with decreasing greenhouse emissions.
Q: What is the status of your Metates project?
A: In the past, by using a pressure oxidation plant, workers at Metates produced a pre-feasibility study that demonstrated its economic viability. However, the capital investment needed was so high that we could not finance it on our own due to the size of our company. We expected that a buyout or a strategic partnership would take care of this obstacle for us, but that did not happen. Two and a half years ago, I founded Alderley Gold Corp with three partners. We started talking to Chesapeake Gold about a year ago and that culminated with the deal that was announced in December 2020 and finalized in early January 2021. We took over management and we are now moving the project forward. We plan to have an updated prefeasibility and scoping study for the heap leach process that will be released to the market in June or July of this year. This will be the first time that investors will have a chance to see the hard numbers behind this new process and how they will change the economics of the project. We already have a permit to drill more holes and the work has already started. We are planning to drill around 2,500m to get fresh samples that we can bring up to a lab in Vancouver and perform the test work, which will take around 18 months, at which point we will update the studies once more.
Q: What are your most important short-term concerns and goals as you assume this leadership position?
A: For the short term, we are concentrating our efforts on finishing all the background test work and generating all the data associated with it. We have US$35 million in the bank, which is enough to complete all feasibility studies, which we expect to finish by 2023. Before the feasibility study is done, we can start the permitting process with Durango’s state government and the federal government as well. The permits will allow us to start operations in 2026. That is our main objective for the future. That is our main focus going forward. However, this technology is applicable to other ore bodies beyond the Metates project. We spent over two and half years looking at all sorts of different projects throughout the Americas where the technology could be best applied. Now, as a part of Chesapeake Gold, we want to return to some of those projects and see if we can make some additional deals and expand our portfolio.
Chesapeake Gold Corp focuses on the exploration and development of precious metals. Chesapeake’s flagship project is the Metates gold-silver deposit in Durango. The company is also generating a strategic pipeline of exploration projects surrounding Metates.