Leagold Mining Corporation reports that its RDM mine in Brazil has been placed on a temporary shutdown as a result of continued regional drought conditions. Leagold plans to align the restart of the RDM mine in early December 2018 with the commissioning of the grid powerline project. Due to the unplanned two-month shutdown of the RDM mine, Leagold plans to update 2018 full-year production guidance within its Q3 2018 earnings report.
Leagold CEO Neil Woodyer commented: “In 2017, the RDM mine was closed on August 11 and restarted, on an intermittent basis, in early November with the onset of the region’s rainy season. This year, RDM remained operational until early October as the processing plant benefitted from the water dam and pipeline that became operational in Q2 2017, but insufficient water volumes are available to continue processing operations as RDM transitions into the current rainy season.
“Our plan is to delay the restart and align it with the commissioning of the grid powerline in December, which also allows for ample water to accumulate in the reservoir to support stable and continuous operations. During the shutdown period, the RDM team will be evaluating opportunities to reduce overall water consumption and the minor plant modifications needed to ramp up the processing rate from 7,000 tpd to 9,000 tpd, which becomes possible with the increased power supply from the grid connection.”
Gold production at the RDM mine has improved, with 16,596 ounces produced in Q3 2018 compared to 7,953 ounces produced in Q3 2017, but the operation has continued to suffer due to two primary issues – lack of water and limited availability of diesel-genset power. The limited power availability has restrained mill throughput and prevented optimization of the grind size in the mill, which impacts gold recovery.
Leagold estimates the cash expenditures during the RDM mine shutdown period to be approximately US$5 million per month in October and November. The remaining capital cost to complete the powerline is estimated at US$1.5 million. Also during the shutdown period, an in-progress tailings dam lift is scheduled to be completed with a remaining capital cost of approximately US$4 million. With the completion of these projects, the RDM mine will be well positioned for stable production going into 2019.
Leagold is building a mid-tier gold producer with a focus on opportunities in Latin America. The Company is based in Vancouver, Canada and owns four operating gold mines in Mexico and Brazil.