The Toroparu Gold Deposit is situated in an under-explored portion of the highly prospective Upper Puruni River Region of western Guyana, and contains one of the largest in-situ gold reserves and resources owned by an independent junior mining company in S. America. Significant resource growth possibilities are supported by recent resource additions as well as discovery of other mineralized systems in the concession areas.
Located within Sandspring's 41,250-hectare(s) mineral concessions in western Guyana at the confluence of the Puruni and Wynamu rivers, Toroparu's flat terrain is easily accessible by air and road. Facilities at Toroparu include a 150-person camp and 2,500-foot all-weather airfield. Toroparu is accessed overland via the 240-km Itiballi-Puruni-Papishao Landing Road, which was rehabilitated by Sandspring in 2003, and is a major corridor for both western Guyana and one of its important gold producing areas.
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.
Continued surface exploration of Sandspring's mineral properties concessions has detected a cluster of gold anomalous zones within a regional 21 x 7km hydrothermal alteration footprint zone surrounding the Toroparu Deposit and an 8 km long linear anomaly within the Otomung River concession to the northwest of Toroparu. Drilling of the Sona Hill gold anomalous zone 4.8 km southeast of Toroparu has resulted in the definition of 195,000 oz Indicated and 241,000 Inferred gold resources, and drilling at the Wynamu Hill anomalous zone 9.7 km north of Toroparu contained higher grade gold intercepts in both saprolite and fresh rock.
The Toroparu Gold Project is located within the pre-Cambrian Guiana Shield that underlies eastern Venezuela, Guyana, Suriname, French Guiana, and parts of northern Brazil. The shield's northern part is composed of alternating volcano-sedimentary belts and large granitoid batholiths of the Paleo-Proterozoic age. The Guiana Shield forms the northern segment of the Amazonian Craton of South America; a dismembered portion of the West African Craton. The West African Craton, which shares the same geological history as parts of the Guiana Shield, is one of the world's major gold producing districts.
Over 30 gold deposits are in production across the West African Craton. Most of these deposits were discovered through systematic exploration focused on of the Paleo-Proterozoic volcano-sedimentary belts of this region. Similar exploration by multinational exploration companies in the Guiana Shield in the 1990s led to the discovery of giant gold deposits like Las Cristinas and Las Brisas in eastern Venezuela. In contrast, alluvial miners working in river drainages have made all discoveries to date in western Guyana, meaning that large parts of the volcano-sedimentary belts remain under-explored. These areas, then, retain a significant potential for discovering additional major deposits like those found in the more explored portions of the shields.
The primary permits required for development of the project including an Environmental Authorization and a Mineral Development and Fiscal Stability Agreement are complete. 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.
The 2013 pre-feasibility study defined a 4.1 million ounce of proven and probable gold reserve, 211 million pounds of economic byproduct copper, and silver resources will be produced over a 16-year mine life from a conventional open pit mine for Toroparu. 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 producing both gold-bearing copper concentrates for shipment by road and sea to a smelter, and gold doré bars poured on-site shipped by air to a refinery. The pre-feasibility defines an initial process 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 run efficient gold mining operations and extensive exploration programs on the Upper Puruni River 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.
A Memorandum of Understanding with the Government of Guyana grants Sandspring the exclusive right to develop the Kurupung River Hydroelectric Project (KRHP) located approximately 50 km southwest of Toroparu. Long term daily flow records suggest 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.