Chesapeake Gold (TSXV:CKG) - Proprietary Oxidation Process Could Help Unlock $1.5T in Stranded Gold
**Chesapeake Gold's Revolutionary Oxidation Technology: A Game Changer for the Mining Industry**
In a recent interview with Crux Investor, Chesapeake Gold Corp's Interim CEO Jean-Paul Tsotsos and Chief Metallurgical Officer Justin Black discussed a groundbreaking proprietary oxidation technology that promises to reshape the mining landscape. This innovative approach could potentially unlock $1.5 trillion in stranded gold resources worldwide, revolutionizing the way refractory gold deposits are mined.
### Transforming Refractory Gold Mining
Chesapeake Gold's focus is on the Metates deposit in Mexico, one of the largest undeveloped gold-silver deposits in the world. It contains an estimated 17 million ounces of gold and 423 million ounces of silver. Historically, the challenge with Metates, like many such deposits, lies in its refractory nature, where gold is trapped within sulfide minerals, making it difficult and costly to extract using conventional methods.
The company's novel technology addresses this issue by transforming sulfide ore into oxide ore through an accelerated oxidation process. This process significantly reduces the time span needed for oxidation—from what would naturally take millions of years to just a few months. By applying special reagents, sulfur is stripped from pyrite crystals and replaced with oxygen, allowing for the extraction of gold through conventional heap leaching.
### Economic and Environmental Impact
The economic implications of this technology are transformative. Previously, the development of the Metates deposit was hindered by the need for pressure oxidation autoclave technology, demanding a capital expenditure of approximately $3.5 billion for a 90,000 ton per day operation and yielding a sub-10% internal rate of return (IRR). Chesapeake's new approach significantly reduces these figures, proposing a 15,000 ton per day operation at a capital cost of just $360 million, with an IRR of 35% and all-in sustaining costs of approximately $750 per ounce.
Beyond the economic benefits, the environmental advantages are equally compelling. The new process consumes less water, requires less energy, and results in lower greenhouse gas emissions compared to traditional methods for processing refractory ores. These attributes make it an attractive option for mining companies seeking to improve their sustainability credentials.
### Proven Results and Global Potential
Justin Black, who has previously demonstrated the technology's effectiveness at Hycroft Mining, showcased its capability on a commercial scale with a 150,000-ton test pad. The results were promising: material with only 20% initially recoverable gold achieved recovery rates of 80-90% post-treatment. Specifically, for Metates, tests revealed that oxidizing material for 204 days could achieve nearly 75% gold recovery, a significant improvement over the 33% recovery for untreated ore.
According to CEO Tsotsos, the technology's potential extends beyond Metates. McKinsey estimates that approximately 580 million ounces of gold globally are classified as refractory, often with higher average grades compared to their non-refractory counterparts. Chesapeake Gold has identified over 200 deposits worldwide where this technology could be applied, positioning the company as a leader in unlocking these challenging resources.
### Future Prospects
Looking ahead, Chesapeake Gold is advancing on multiple fronts. The company is continuing test work, analyzing samples from other companies, and planning the establishment of a pilot plant to further demonstrate the technology's effectiveness. These efforts underline Chesapeake's commitment to not only transforming its own operations but also setting a new standard for the mining industry as a whole.
In conclusion, Chesapeake Gold's proprietary oxidation technology represents a significant advancement in mining technology. It offers a cost-effective, environmentally friendly solution to a longstanding challenge, opening up new opportunities for the extraction of previously inaccessible gold resources. As the company continues to develop and refine this technology, it stands to play a pivotal role in the future of gold mining.
