Patagonia Gold gets green light for Argentinian project

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LONDON (ShareCast) - AIM-listed gold miner Patagonia Gold (Other OTC: PATAF.PK - news) has received a 'full and final permit' to start producing at its Lomada de Leiva gold project in Santa Cruz, Argentina.

"We are very pleased to have achieved this important milestone for our company," said Chairman Carlos Miguens.

"We would like to thank the Governor, authorities and the community of the province of Santa Cruz for their confidence in our capacity to proceed with the responsible development of the Lomada de Leiva gold project, while taking good care of the environment and existing social structures."

Targeted annual production at Lomada (according to estimates in 2008) is 21,000 ounces of gold.

Patagonia is now ready to start constructing the main heap leach and aims to achieve full production by early in the second quarter of 2013. The company forecasts production of 14,000 ounces of gold for the second half of next year.

The company has classed Lomada as a "low cost high return" project with total capital expenditure expected to be $16m and an operating expenditure in the lower quartile of world gold producers.

It will take $7.0m together with debt of $4.2m (for the mining equipment) to bring Lomada to full production.

Shares rose 5.58% to 22.7p in the opening hour of trade on Thursday.