Companies: GSL   

Gold and silver hopeful Greystar Resources says an independent study suggests revenues of £232 million to £296 million from Angostura in Colombia.

Vancouver-based Greystar cites an independent scoping study by the Hatch consultancy showing potential cash flow from an open-pit operation at Angostura over an 11-year mine life ranging from $464.6 million (£234.6 million) with the gold price averaging $515 an ounce (against $658 today) and silver at $9 an ounce (against $13 now) to $593.6 million, with an average $545 gold price and silver still at $9. The study envisages provisional open-pit reserves of 6.8 million ounces of gold at a low grade of 1.28 grammes per tonne of ore and 31.2 million ounces of silver at 5.82 grammes per tonne.

The Hatch study suggests cash costs, before capital expenditure, of $276 an ounce of gold, after taking silver credits into account, and envisages an initial capital cost of £190 million, with another £70 million over the life of the mine. AIM and Toronto-quoted Greystar, which had £121 million in the bank in April, says it has enough money to take it through to commissioning a bankable feasibility study info the Angostura project, though it might ‘top up’ its cash before then.

Greytstar shares, which have swung between 97p in 2004 and 585.5p a year ago, were recommended by Growth Company Investor as a ‘speculation’ at 114.5p in October 2004 and as offering ‘more growth’ at 275p in August 2005. Now 385p, valuing the company at £147 million, they should outperform several sector peers.

Greystar Resources	AIM	£23.2m	52.50p	7.50p
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Angostura sweeter for Greystar			17/08/2005
Great grades for Greystar			15/10/2004