In the year ended December 31, 2016, Gualcamayo mine –located in San Juan province and operated by Yamana Gold- sold 169,347 ounces of gold at total cost of sales of $1,038 per ounce of gold sold, compared to 176,852 ounces of gold sold at total cost of sales of $1,162 per ounce of gold sold in 2015. Gualcamayo produced a total of 164,265 ounces of gold in the 2016, compared to 180,674 ounces of gold in 2015. Co-product cash costs per ounce of gold produced were $796 per ounce of gold in 2016, compared to $814 per ounce of gold in 2015. Co-product AISC per ounce produced were $847 in 2016, compared to $850 in 2015. Overall, annual production at Gualcamayo was in line with expectations.
At Gualcamayo, exploration drilling, that commenced in late 2015 to discover and develop new oxide ounces amenable to current heap leach processing facilities continued into 2016. The drilling focused on near mine targets, including Cerro Condor, Potenciales and Las Vacas and included the collection of 10-metre channel samples for geochemical analysis.
Drilling during the course of 2016 included 5,795 metres distributed in 28 holes testing the Potenciales target, 4,359 metres distributed in 19 holes testing the Las Vacas target, 3,198 metres distributed in 20 holes testing the Cerro Condor target and 4,946 metres distributed in 19 holes that tested the Target 9 and AIM targets.
As reported last October, positive results were returned from two areas immediately adjacent to the current open pit. The Cerro Condor target is located along the eastern rim of the QDD Main pit wall and was defined by channel sample results including 60 metres of 2.57 g/t gold and 10 metres of 9.19 g/t gold. Hole 16QD-975 drilled in September returned 104 metres of 1.41 g/t gold. The Potenciales target, located along the western flank of the pit wall, was defined by numerous channel sample results, including 10 metres of 10.5 g/t gold and 10 metres of 13.28 g/t gold.
Follow-up drill results for Cerro Condor, Potenciales and a third near surface oxide target, Las Vacas from drilling conducted in the fourth quarter, continue to support Mineral Resource growth from these near mine target areas. At Cerro Condor, the currently defined mineral body measures 190 metres long by 90 metres wide and at least 65 metres thick, averaging 1.1 g/t gold. Late 2016 drill results are pending and this mineral body is expected to grow once the results are received. The Potenciales target’s currently defined shape stands at 150 metres in length by 50 metres wide by 80 metres depth averaging 1.0 g/t gold and is open to depth. The Las Vacas deposit is at least 500 metres along strike, 200 metres wide and 200 metres in depth, averaging 0.6 g/t gold and remains open along strike. Exploration and infill programs for 2017 will continue work on these targets to support Mineral Resource growth, and will also begin to develop the near mine targets such as the «truck shop» target, the Salida Alaya, Quebrada Aspera and other targets supported by gold anomalies found in calcareous hydrothermal breccia.
A 2.7 kilometre access road from Las Vacas to the near mine Quebrada de Rodado area was completed and sampled during the fourth quarter of 2016, exposing new geologic and geochemical targets to be drill tested in early 2017. District exploration efforts will include gaining access to favourable target areas beginning close to the mine and working our way west and to the south. As evidenced by the ongoing discoveries at deep carbonates and recent near mine discoveries in 2015 and 2016, the Company believes that a focused and concerted effort to explore the many surface geochemical, Aster and geologic targets will lead to discovery of additional mineable gold deposits that can be rapidly put into the life of mine plan.
minary metallurgical tests.
