Desert Sun Mining Reopens Brazilian Underground Gold Mine

Desert Sun Mining has restarted operations at the Jacobina underground gold mine in northeastern Brazil. The Toronto-based company announced recently that it expects to reach commercial production by the third quarter of this year.

Peter Tagliamonti, chief operating officer, said the mine expects to process 90 kt (99,000 st) of ore in July to build up processing capabilities to a capacity of 125 kt/month (138,000 stpm) by the fourth quarter.

Desert Sun Mining has two stopes completed, Tagliamonti said. And two more should be ready in 2006. He also said the lower development costs and higher equipment efficiencies than what were expected in the feasibility study helped offset the higher Brazilian real.

In addition, the feasibility study was based on US$11.25/ g (US$350/oz) gold and not the current $13.50/g (US$420/ oz) price the company received for 99.5 kg (3,200 oz) it sold in May. Cash costs are about US$7.39/g (US$230/oz).

Copyright Society for Mining, Metallurgy, and Exploration, Inc. Jul 2005