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•• Monthly Mining Bulletin Nº23
Diciembre - 2013 - PANORAMA MINERO
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Mining in Argentina – What happened in November?

Last November, news showed an important development in several projects. The most important occurred in Northwestern Argentina, where Orocobre is advancing at full speed at the Olaroz lithium project. Also, as an strategy to catch funds, the Australian company is investing in Borax’s facilities, in order to maximize its potential, and have better boron products, at lower costs.

In the same way, U3O8 Corporation has identified important uranium and vanadium mineralization at its Laguna Salada project (Chubut), showing the strong potential for this minerals in the Patagonian province. An important and key issue is that U3O8 Corporation is advancing in negotiations with the province mining company: Petrominera Chubut.

Canadian junior mining company NGEx Resources shows, month after month, the potential of the Vicuña district, which comprises Los Helados project (Chile), and Filo del Sol and Josemaria projects in San Juan province. These projects are confirming that NGEx Resources should be advancing towards the identification of an important cluster of copper and gold deposits. Japanese companies like Pan Pacific Copper show their interest by funding exploration works.

McEwen Mining, the company that has a 49% interest in San Jose mine announced that it is on track to meet its production guidance; and Minera IRL has all permits and funds to begin construction in early 2014.

On the exploration side, Argentex shows that Pinguino Project is one of the most promising properties in the Deseado Massif (Santa Cruz province) with positive and relevant results; and in Northwestern Argentina, Marifil Mines announced that Southern Copper –one of the most important copper producers- is advancing in its Cerro Samenta property (Salta province)


Orocobre Limited: Construction Update on the Olaroz Lithium Project / Boric Acid Plant Pre-Feasibility Study Commences at Borax
Orocobre Limited commented that progress on the Olaroz Lithium Project (Jujuy province) continues to proceed on time and within budget. In terms of physical progress the construction program is approximately 65% complete.

U3O8 Corp. Makes a New Uranium-Vanadium Discovery in the Laguna Salada District
U3O8 Corp. has discovered an entirely new mineralized area with the highest uranium-vanadium grades found to date in the Laguna Salada district in Chubut Province. The La Rosada discovery highlights the district-scale potential for Laguna Salada style uranium-vanadium mineralization in near-surface, soft gravels in the semi-desert environment of central Chubut.

NGEx Resources – Important Development at Filo del Sol, Josemaria and Los Helados
During the three months ended September 30, 2013 there was no active exploration on the Company's projects in Chile and Argentina due to the South American winter. However, updated Mineral Resource estimates that included drilling completed earlier this year were announced for the Josemaria and Los Helados Projects.

McEwen Mining – Third Quarter Financial and Operating Results
McEwen Mining Inc. provided a summary of the Company's Q3 2013 operating results.

Minera IRL – Don Nicolás Update
Minera IRL announced its unaudited third quarter results for the three months ended 30 September 2013.

Argentex Completes Resource Development Drilling Program at Pinguino
Argentex Mining Corporation announced the completion of its 2013 resource development drilling program (Phase IX) at its 100% owned Pingüino silver and gold project located in Santa Cruz Province.

Marifil Receives Update on Cerro Samenta
Marifil Mines Limited announced that its partner, Southern Copper (“SC”), has sent it a progress report on SC's work on the Cerro Samenta porphyry copper project in Salta Province.

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Orocobre Limited: Construction Update on the Olaroz Lithium Project / Boric Acid Plant Pre-Feasibility Study Commences at Borax

 
 

Orocobre Limited commented that progress on the Olaroz Lithium Project (Jujuy province) continues to proceed on time and within budget. In terms of physical progress the construction program is approximately 65% complete.

•The brine pumping rate has reached approximately 150 l/s. The steady state operational rate required is 180l/s with a peak filling rate of approximately 220l/s to be achieved as the remaining bores are connected to the brine pumping and supply system

•The liming plant is approximately 80% complete with piping and electric works the focus during November. The liming plant is scheduled to be commissioned in December

•The gas pipeline has been completed. 'Gas Atacama' has inspected and approved the pipeline. Regulation stations are currently being installed

•Evaporation pond earthworks remain ahead of schedule. Evaporation pond 1B is on schedule to be lined in December and subsequently filled

•Civil works are complete on the lithium processing plant, finished goods warehouse and the soda ash warehouse

•The electricity generation plant is currently under construction and due for completion in December. There are currently 3 diesel generators in service

•The project continues to proceed on time and within budget. A total of approximately US$147m has been spent or committed via executed contracts in the construction project to date

•The Company continues to follow the "Jujuy First" strategy to successfully work with suppliers and the employment bureau to focus on the hiring of local people from the communities of Olaroz, Huancar, Puesto Sey, Pastos Chicos, Catua, Susques, Jama, El Toro, Coranzulí, San Juan and Abrapampa
The project implementation is through EPCM (Engineering, Procurement and Construction Management) with a high proportion of local involvement through construction and supply contracts and local employment. The unique community and shared value policy continues to be a key success factor, training local people under the supervision of high quality experienced professionals.

The Olaroz lithium project is being developed by Orocobre (66.5%) with partners Toyota Tsusho Corporation (25%) and the Jujuy Province mining and energy company, JEMSE (8.5%) with a construction budget of US$229m including contingency. First production is scheduled for the end of the second quarter, 2014.

Boric Acid Plant Pre-Feasibility Study Commences at Borax

Also in November, Orocobre announced the commencement of a pre-feasibility study into the construction of a Boric Acid plant at Olacapato in Salta Province.

The study will assess the feasibility of constructing a boric acid plant with a production capacity of 16-24,000 tonnes per annum boric acid.

Feedstock for the plant would come from a variety of locations where the Company has mineralisation currently described as historical estimates including Porvenir, Ratones and Diablillos located approximately 40kms, 100kms and 130kms respectively from Olacapato. Currently, the Company is in the process of upgrading the mineralisation at Porvenir into a JORC compliant resource as part of this study.

The plant flowsheet will be designed to allow treatment of lower grade ores that are currently being processed and with the aim of obtaining higher recoveries and reduced operating costs. Based on earlier internal company scoping studies, the estimated capital cost of the boric acid plant is in the range of US$13-17million including 35% contingency.

The pre-feasibility study is scheduled to be completed early in the first quarter 2014. Assuming a positive outcome from the pre-feasibility study, the feasibility study would be completed and the required permits obtained in the following six months with a view to commence construction in the latter part of 2014.

Background and Potential benefits

Currently, Borax Argentina produces boric acid from a 9,000 tonnes per annum plant at Campo Quijano near Salta city, processing ulexite mineralisation mined from Porvenir which is located 300kms away. The plant is designed to treat a high grade feed of ulexite mineralisation which has been selectively mined and then upgraded by drying and hand sorting.
There are potential advantages to the construction of a new and larger facility at Olacapato. In particular, by being able to process lower grade "run-of-mine" ore the costly and time consuming process of drying and hand sorting would be eliminated and the mining and processing recovery of mineralisation increased. In addition, the long cartage by road transport would be eliminated and the increased production rate would provide economies of scale compared to current operations.

The company recently announced the relocation of the borax chemical plant from Campo Quijano near the city of Salta to the Tincalayu mine. The relocation is due for completion in June 2014.

 

 

U3O8 Corp. Makes a New Uranium-Vanadium Discovery in the Laguna Salada District

 
 

U3O8 Corp. has discovered an entirely new mineralized area with the highest uranium-vanadium grades found to date in the Laguna Salada district in Chubut Province. The La Rosada discovery highlights the district-scale potential for Laguna Salada style uranium-vanadium mineralization in near-surface, soft gravels in the semi-desert environment of central Chubut.

Laguna Salada is advancing as a potential low-cost, near-term producer that could serve Argentina's growing nuclear reactor fleet that currently relies completely on imported uranium, as well as export opportunities to countries such as the UAE, Saudi Arabia, China, South Korea and Russia with which Argentina has nuclear co-operation agreements. To this end, the company is finalizing a definitive agreement to partner with Petrominera Chubut S.E., the provincial mining company, and completing a preliminary economic assessment ("PEA")

The La Rosada discovery has the highest grades encountered to date in the soft, free-digging gravels in the Laguna Salada district, and for the first time, U3O8 Corp. has identified uranium-vanadium mineralization in the adjacent basement rocks, which may be a source of the mineralization in the gravel.

Vertical channel samples through the gravel have a weighted average grade of 1,500ppm uranium (U3O8) and 780ppm vanadium (V2O5) from a layer of gravel about 0.7 metres thick starting at an average depth of 0.3m below surface. This average grade is from two areas of gravel, totalling 3.2 square kilometres in extent that are perched on Jurassic basement strata. The highest grade encountered in the gravel at La Rosada was 11,780ppm (1.1%) U3O8 and 5,168ppm (0.5%) V2O5 in a 0.4m thick horizontal layer.


The near-surface mineralization at La Rosada is typical of the Laguna Salada Deposit where the uranium-vanadium occurs in the fine sand between the pebbles in soft gravel that could be amenable to beneficiation by screening which removes the pebbles and coarse sand. Screening of Laguna Salada gravels concentrated over 90% of its uranium in about 10% of the gravel's original mass, resulting in a 10-11 times increase of grade in the fine material. Gravel in the Laguna Salada district is unconsolidated and is amenable to low-cost continuous mining that involves no blasting or crushing.

Mineralization is expected to continue in the gravels beneath the sand cover to the south of the La Rosada discovery - and exploration will now shift to that area.

 

NGEx Resources – Important Development at Filo del Sol, Josemaria and Los Helados

 
 

During the three months ended September 30, 2013 there was no active exploration on the Company's projects in Chile and Argentina due to the South American winter. However, updated Mineral Resource estimates that included drilling completed earlier this year were announced for the Josemaria and Los Helados Projects.

•At Los Helados (Chile), following an extensive drilling program totaling 32,207 metres (32 holes) completed earlier in the year, an updated Mineral Resource was estimated at a base case of 0.30% copper equivalent cutoff which increased the copper contained in Indicated Resources by 48% to 15.26 billion pounds and gold contained in Indicated Resources by 34% to 8.90 million ounces.

•At Josemaria, following a drilling program totaling 8,242 metres (18 holes) completed earlier in the year, an updated Mineral Resource was estimated at a base case of 0.30% copper equivalent cutoff which increased the copper contained in Indicated Resources by 17% to 6.1 billion pounds and gold contained in Indicated Resources by 18% to 6.6 million ounces.

Filo del Sol Property, San Juan Province

A total of 820 metres were drilled at Filo del Sol during the 2012/2013 season. The drill program was concluded on February 18, 2013. The 2012/2013 drill program focused on expanding the high-grade copper-silver zone which occurs in the northern part of the mineralized system and has been traced by previous drilling over a distance of at least 1,200 metres. Significant results received since the last quarterly report, include:

•FSDH08 with 38.1 metres of 1.23% copper, 0.21 g/t Au and 10.9 g/t Ag and FSDH11 with 65 metres of 0.77 g/t Au.

The results of this season's drilling expand the previously identified high grade copper zone at Filo del Sol and extend the broader zone of disseminated copper, gold, and silver mineralization that surrounds the high grade zone. Results from this year's drilling, combined with previously released drilling, are encouraging and support plans for a larger drill program next season. A drill program expected to total up to 8,000 metres is planned to begin late in the fourth quarter of 2013.

Los Helados-Josemaria Trend, San Juan Province

An additional 1,437 metres in 4 holes was drilled on early stage porphyry copper-gold targets located between Los Helados and Josemaria. These targets are part of the NGEx-PPC (Pan Pacific Copper) joint venture that includes Los Helados and Filo del Sol. The drill holes intersected encouraging porphyry style alteration with low grade copper and gold values. Further work is required to follow-up these results.

Josemaria Project, San Juan Province

A total of 8,242 metres in 18 diamond drill holes was completed during the 2012/2013 season. The focus of the program was the expansion of the zone of high-grade supergene mineralization discovered at the end of the 2011/2012 field season in holes JMDH49 and JMDH50 as well as resource conversion from Inferred to Indicated classification. The high-grade zone was extended some 200 metres to the north and now has approximate dimensions of 350 metres north to south and at least 250 metres east to west. It remains open to the west of holes JMDH69 and JMDH72 towards a large area of leached capping that has not yet been drill tested. The drilling completed during 2013 has resulted in a significant increase to the resource base at Josemaria as compared to the January 2013 Mineral Resource update.

•Copper contained in Indicated Resources has increased by 17% to 6.1 billion pounds (January - 5.2 billion pounds).
•Gold contained in Indicated Resources has increased by 18% to 6.6 million ounces (January - 5.6 million ounces).
•Indicated Resources have increased by 20% to 789 million tonnes (January - 656 million tonnes).

Conceptual Studies

In addition to the drilling completed this season the Company has initiated conceptual level studies, including mining engineering, process design, metallurgical testwork and baseline infrastructure options. The scoping level metallurgical program for Los Helados is expected to conclude in the fourth quarter while the program at Josemaria is expected to conclude in the first quarter of 2014. Geotechnical work at Los Helados was completed in the second quarter and preliminary mine development options were identified for further evaluation later in 2013 and into 2014 once the resource models are refined. Options identified so far include stand-alone development of Josemaria and/or Los Helados as well as an integrated project exploiting resources from both deposits. This work is ongoing and expected to continue into 2014.

Outlook

The Company's exploration efforts are focused on large scale copper-gold targets that demonstrate the potential for world class discoveries. The district is an emerging copper-gold porphyry cluster that includes NGEx's 60% owned Los Helados, Josemaria, and Filo del Sol projects as well as the nearby Caserones copper mine, which is 75% owned by NGEx's joint venture partner Pan Pacific Copper Co. Ltd.

 

McEwen Mining – Third Quarter Financial and Operating Results

 
 

McEwen Mining Inc. provided a summary of the Company's Q3 2013 operating results. Highlights include:
•Company earnings during the quarter totaled $3.3 million ($0.01 per share).
•Earnings from mining operations during the quarter totaled $15.4 million.
•On target to meet 2013 full-year guidance of 130,000 gold equivalent ounces.

San José Mine, Santa Cruz Province (49%)

Production for McEwen Mining's share in the San José mine during Q3 2013 was 28,467 gold equivalent ounces (converting silver into gold using a 52:1 ratio), consisting of 12,549 gold ounces and 827,726 silver ounces. San José is on track to meet its production guidance for the third consecutive year. Production guidance for McEwen Mining's share of San José in 2013 is 102,700 gold equivalent ounces.

Gold equivalent total cash costs for Q3 2013 equalled $749 per ounce. This is 7% lower than Q3 2012 and consistent with the previous quarter. Costs have been declining due to increased production and a declining Argentine peso. All-in sustaining costs were slightly higher than Q2 2013 by 3% at $1,003 per gold equivalent ounce. This increase is due to the timing of gold and silver sales.

Los Azules Copper Project, San Juan Province (100%)

In September, McEwen Mining announced an updated PEA for the Los Azules Copper project. The results from the PEA demonstrate that Los Azules has the potential to become one of the largest, lowest cost copper mines in the world. In addition, there remains excellent exploration potential to further expand the size of the existing mineral resource. Highlights from the PEA are shown below:

•Pre-tax Net Present Value of $3.0 billion (8% discount rate) and an Internal Rate of Return of 17.7%.
•Annual copper production during years 1-5 to average 258,000 tonnes (568 million lbs.), which would have placed it in the top 3% of copper mines in the world during 2012. Life of mine annual copper production to average 171,000 tonnes (377 million lbs.) over 35 years.
•Indicated resource of 5.4 billion pounds of copper (grading 0.63% Cu) and 0.8 million ounces of gold (389 million tonnes with a cut-off grade of 0.35% Cu) and Inferred resource of 14.3 billion pounds of copper (grading 0.46%) and 2.6 million ounces of gold (1,397 million tonnes with a cut-off grade of 0.35% Cu).
•Initial capital costs to construct the mine and process plant have been estimated at $3.9 billion with a payback on a pre-tax basis has been estimated at 3.8 years at $3.00/lb. copper and $1,300/oz. gold.


 

Minera IRL – Don Nicolás Update

 
 

Minera IRL announced its unaudited third quarter results for the three months ended 30 September 2013. The company announced the update of Don Nicolás project (Santa Cruz province):

•Successfully secured $80m financing for the Don Nicolas Gold Project from Argentinian sources,
•Under the terms of the financing, the Company entered into a definitive agreement with Compañía Inversora en Minas ("CIMINAS"), whereby •CIMINAS would make a $45 million investment in Minera IRL Patagonia S.A. to become up to a 45% equity owner of Minera Patagonia
•The equity investment, in addition to a $35 million credit facility CIMINAS has made available, is being applied toward the development of the Don Nicolás Gold Project in Santa Cruz Province,
•The Don Nicolas Project is fully permitted and construction activities are expected to commence in the first quarter of 2014


 

Argentex Completes Resource Development Drilling Program at Pinguino

 
 

Argentex Mining Corporation announced the completion of its 2013 resource development drilling program (Phase IX) at its 100% owned Pingüino silver and gold project located in Santa Cruz Province. The 3,003-metre drill program, which was undertaken from September 12, 2013 to October 26, 2013, was comprised of 58 holes of reverse circulation drilling targeting oxide material in previously discovered high priority veins, which is not included in the current resource model. Additionally, approximately 7,700 metres of trenching is being finalised to test continuity to surface of mineralisation.

The program was completed on schedule and on budget. Upon receipt of the new drill results, the plan is to update the mineral resource estimate at Pingüino with a goal of increasing the inventory of near surface oxide material.

After that, Argentex Mining Corporation announced the first drilling results from its 58-hole, 3,003-metre 2013 Phase IX resource development drill program at its 100%-owned Pingüino silver and gold project. To date, the Company has received results from 8 reverse circulation ("RC") holes, while 50 RC holes remain to be processed in the lab.

The higher grades located near intersections with adjacent or crosscutting veins suggests a potential for high grade shoots to continue to depth. Arrayed from west to east, those veins are Marta Este, Savary and CSV Norte. Targeting these prospective shoots at depth may add new high grade mineralisation and other intersections to Pingüino's resources.

Drill results included 4 Metres Averaging 132.9 g/t silver and 2.53 g/t gold.

 

Marifil Receives Update on Cerro Samenta

 
 

Marifil Mines Limited announced that its partner, Southern Copper (“SC”), has sent it a progress report on SC's work on the Cerro Samenta porphyry copper project in Salta Province.

SC reports that its environmental report (necessary prior to drilling) has been approved by the Mining Secretary of Salta Province. Meanwhile SC has been carrying out geologic mapping at a scale of 1:25,000, and has collected and analyzed 338 rock samples.

SC further reports that it will be building access roads and drill pads during the coming months.

Southern Copper Corporation is an integrated copper producer and in 2011 was the 7th largest copper producer in the world with sales of $6.8 billion. SC produces copper, molybdenum, zinc and silver. All of its mining, smelting and refining facilities are located in Peru and Mexico, and SC conducts exploration activities in those countries and in Argentina, Chile and Ecuador.


 
  Panorama Minero
Buenos Aires - Argentina
Phone: (054-11) 4952-1117

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