Dana Resources is a precious and base metals exploration company that has been gaining momentum of late. While things have been looking up for the young company, Dana Resources took a major step towards enhancing their financial future when they announced the initiation of the production program at its Collota gold deposit in Northern Peru. Currently, Dana Resources owns and operates seven mining projects which are located in Peru’s most prolific mining regions.
The company has a plan in place to produce gold for sale by 2012 under the proposed model which will permit all zones to commence shortly. As for an estimated time frame, the permitting process is expected to run 12 to 18 months with a production setup time which is estimated at 18 to 24 months.
By comparison, IRLS MINERA, a neighboring company, successfully put its deposit into production under the same model after raising $20 million. While successful, the IRLS MINERA deposit is 40 percent smaller than Dana Resources’ Collota deposit.
Dana Resources plans on processing the oxide zone first due to the low cost open pit heap leach process. Initially, Dana Resources expects to net $15 per ton of ore. The Collota gold deposit oxide zone has 27 million tons available to be processed using a cut-off grade of 0.25 grams per ton. At this cut-off, Dana Resources will net over $400 million profit from the oxide zone. The sulphide zone has over 13 million tons ready to be processed with expectations to net approximately $150 million profit.
When asked what this process will mean to the aggressive young company, their Board of Directors stated, “We are very excited to initiate our production program at Collota. As previously stated, our plan is to simultaneously increase the size and grade of the Collota deposit and continue permitting the project for production. We believe with further drilling, the Collota deposit could reach upwards of 3 million ounces of gold.”
Peru holds around 16 percent of the world’s known mineral resources and has some of the richest mineral reserves in the world and is one of the highest producing countries of precious and base metals in Latin America which may allow this production program to exceed all expectations.
Currently, Dana Resources in trading over the counter in the $0.39 range. With this innovative news and a strong business model in place, Dana Resources may be an up-and-coming company to keep an eye on.
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