High costs on Coyote project

HIGHER costs have forced local explorer Tanami Gold to defer developing its $20 million Coyote gold project. The directors of Tanami made the decision not to mine the open pit resources at Larranganni, 35 kilometres north of Coyote, citing rising fuel, steel, labour, explosives, mining contractor and capital costs as reasons for the delay. On these grounds, Tanami does not consider the project to be currently economically feasible, with a grade of 3.15 grams per tonne of gold. The company will, however, go ahead with plans to mine the Coyote project’s higher-grade underground resource, which has an undiluted grade of 22g/tonne, according to Tanami. The miner’s shares fell almost 5 per cent under the pressure to 10 cents. The delay of the project follows other recent delays to local resource projects, including the development of View Resources Bronzewing gold mine near Leinster, which was also put on hold due to rising costs. Tanami plans to undertake additional exploration in the project area to identify additional resources in an effort to increase the viability of the project.