EnviroGold switches focus from Venezuela to Peru for development of third gold project

Australian-listed EnviroGold (ASX: EVG) has dropped its proposed El Callao project in Venezuela, leaving the company to refocus its efforts on the Trujillo project in Northern Peru.

Despite EnviroGold being offered a joint venture interest by the Venezuelan Government-owned CVG Minerven in the development of a substantial and advanced copper/gold property, the Minister for Heavy Industry and Mining formally refused to permit the export of existing drill core samples for metallurgical testwork in Australia.

EnviroGold executive chairman Brian Johnson said said the Minister’s expressed view is that sufficient exploration and testwork has been carried out by previous owners of the relevant concession and EnviroGold should commit to the proposed development without the benefit of its own feasibility study.

"The view was obviously both unrealistic and unacceptable and the Company had decided to abandon any concept of investment in Venezuela while the existing Government is in place," Mr Johnson said.

"EnviroGold will concentrate on the expansion of its two recently acquired mines in Azuay Province, Ecuador, and reactivate the Trujillo gold project in Northern Peru."

The project in Peru will involve the consolidation of ownership of a number of identified closed mines with remaining refractory ore, which could be redeveloped to supply feed to a centralised Albion process plant located approximately 30 km from the regional capital, Trujillo.

It is now anticipated that construction for the expansion of the Azuay mines could commence at the end of 2011, twelve months after completion of the Las Lagunas project in the Dominican Republic, which is currently under construction.

Mr Johnson said the Trujillo project would be slower in the predevelopment phase with the Company facing difficult acquisition negotiations and normal delays for environmental permitting.