One of the world's largest undeveloped reserve and resource, the Toroparu Gold Deposit is situated in an under-explored portion of highly prospective region, and is rife with the potential to grow even larger.
The Toroparu Gold Project contains one of the world's largest undeveloped in-situ gold deposits owned by a junior mining company. Located within Sandspring's 62,603-hectare mineral concession in the Upper Puruni River Region of western Guyana, Toroparu's flat terrain is easily accessible by air and road. A pre-feasibility study completed for the Toroparu Project in 2013 at US$1400/oz gold outlined the design of an open-pit mine producing 228,000 ounces of gold per year over an initial 16-year mine life. The estimated US$464 million pre-production capex is paid back in 2.6 years, with an after-tax IRR of 23.1% and an NPV5% of US$691 million. The project has its Environmental Authorization, Mineral Agreement and Fiscal Stability Agreement in place. A definitive feasibility study for the project is underway and will provide the engineering and economic information that Sandspring needs to make a construction decision. The Project's appealing economics, and Sandspring's long-established positive relationship with the Government of Guyana, mean that the Toroparu Project will provide Sandspring with a robust platform from which to realize the potential of this emerging gold district.
Lying at the confluence of the Puruni and Wynamu rivers, Toroparu includes a 120-person camp, a 2,500-foot all-weather airfield, and is accessed overland via the 240-km Itibali-Puruni-Papishao Landing Road, all of which have been in operation since 2004. The Project is a one-hour flight from Georgetown, Guyana's capital, and a ten-hour journey via boat up the Essequibo Estuary to the river ports at Itibali and Pine Tree, then overland to Toroparu. This road, rehabilitated by Sandspring in 2003, is a major corridor providing primary access to western Guyana, as well as to one of Guyana's important gold producing areas.
The Toroparu Project is a conventional open pit mine. It has a 4.1 million ounce proven and probable gold reserve, 211 million pounds of economic byproduct copper, and a 16-year mine life. The ore processing facility is being designed to accommodate two ore types with varying amounts of copper. It will consist of flotation and leaching circuits, and produce gold-bearing copper concentrates for shipment to a smelter, and gold doré bars that will be poured on-site and flown to a refinery. This facility is expected to process an initial throughput of 19,000 tons per day, and increase to 22,500 tons per day in its fourth year of production.
Guyana's network of skilled workers comes from the country's strong educational system, and its well-established gold and bauxite mining sectors. Sandspring has employed an experienced team of Guyanese equipment operators, maintenance personnel, and administrative staff since 2000. The team has not only efficiently run gold mining operations, as well as extensive exploration programs on the Upper Puruni mineral concessions, they have also built the camp, airstrip, rehabilitated 140 km of the access road from Puruni Landing, and constructed over 150 km of on-site roads. In addition, the mechanical, electrical, and other skilled tradesmen have successfully maintained Sandspring's fleet of mining and road construction equipment for more than 14 years.
In April 2013, Sandspring signed a Memorandum of Understanding with the Government of Guyana granting the Company the exclusive right to develop the Kurupung River Hydroelectric Project (KRHP). Located approximately 50 km southwest of Toroparu, it is estimated that the KRHP can support more than 100 megawatts of run-of-river hydroelectric capacity. An initial 50-megawatt run-of-river facility would support the Toroparu Project and other enterprises located within 120 km of the power plant. Sandspring estimates that the use of hydroelectric power could reduce its cash operating costs by US$60 to US$80 per ounce of gold produced. Such a reduction would not only result in significant cost savings over the life of the Toroparu Project, but also increase the economic viability of mining additional resources not currently in its mine plan.