Denarius approved for mining at Zancudo gold project in Colombia
Denarius Metals (Cboe CA: DMET) (OTC: DNRSF) has received the go-ahead to begin mining operations at its Zancudo project in Colombia following approval of its environmental impact study (EIS) by the local environmental authority.
The Zancudo project hosts a high-grade gold-silver deposit and includes the historic Independencia mine located in the Cauca belt, about 30 km southwest of Medellin.
The project was previously held by Aris Mining (TSX: ARIS) (then as Gran Colombia Gold) and explored by IAMGOLD (TSX: IMG) under an option agreement. Denarius took full ownership of the project in 2022 after IAMGOLD decided not to proceed with its earn-in.
Based on historic drilling completed by Aris and IAMGOLD, the Zancudo project currently has an estimated resource of 4.1 million tonnes grading 6.5 g/t gold and 107 g/t silver totaling 860,000 oz. of gold and 14.1 million oz. of silver.
With the EIS approval, says executive chairman Serafino Iacono, the company would soon reach producer status, with first production from Zancudo expected by the end of this quarter. The mined material will initially be sold to Soma Gold (TSXV: SOMA) and processed at its El Limon mill, which has capacity of 225 tonnes per day (t/d).
The El Limon mill has been on care and maintenance since 2020, and the companies are currently working towards its restart. The plant is located north of Aris Mining’s Segovia operations in the department of Antioquia, and is permitted for up to 400 tonnes per day.
“Processing of Zancudo’s material at the El Limon mill to generate high-grade gold-silver concentrates is expected to commence by the end of February,” Iacono said in Wednesday’s press release. He also noted that the agreement with Soma will help generate cash flow for the company while it gets the new 1,000 t/d plant at Zancudo ready, which is expected in the second quarter.
Later in 2025, Denarius expects to have a second operating mine at its Aguablanca project in Spain. A formal mining licence application has already been submitted for the zinc-lead-silver project, which it acquired in 2017.
Denarius Metals’ Canadian-listed shares rose 13.3% during Wednesday morning’s trading session on the latest announcement. The company’s market capitalization is approximately C$63.6 million ($44.2m).