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Investor Info
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Frequently Asked Questions
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| Q | How many more years will Denton-Rawhide be in operation? |
| A | The Denton-Rawhide gold operation in Nevada is currently in the residual leach and reclamation phase. Active mining ceased at Denton-Rawhide in October 2002 and crushing and stacking the stockpiled material onto the heap leach pad was completed by May 2003. Residual leaching involves the circulation of leaching fluids through the heap and recovering the precious metals from the leach solution. Production typically declines once the residual leach phase commences, but will continue as long as it remains economically viable to do so. Since operating costs decline substantially once a mine commences residual leaching (mining, crushing and stacking equipment is no longer in operation and staff is reduced by 90%) a residual leach operation will typically remain economic for a number of years, barring unforeseen circumstances. Gold production from residual leaching at Denton-Rawhide has begun to decline as expected, however, the current gold price environment has resulted in higher margins per ounce produced. While the Company can not accurately estimate future production from Denton-Rawhide, it does plan on cash flows roughly 6 months into the future and expects the operation to continue for the next several years. Cash flow from gold production at Denton-Rawhide has been used by Pacific Rim for exploration expenditures, primarily at the Company's flagship El Dorado gold project, and overheads. It is not, nor was it ever assumed to be, sufficient to finance mine construction at El Dorado.
Cash flow from Denton-Rawhide is expected to be generated long after residual leach gold production ceases. In October 2004, Pacific Rim and Kennecott (Denton-Rawhide joint venture partners) signed an agreement to sell a portion of the mine landholdings (specifically the old open pits) to a private Nevada corporation. This sale, when completed, is expected to generate over US $100 million in cash flow for Pacific Rim from an annual royalty to be paid over the 40+ year life of the agreement. |
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