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•• Monthly Mining Bulletin Nº25
February - 2014 - PANORAMA MINERO
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Mining in Argentina – What happened in January?

This year began with Orocobre’s announcement that Olaroz project is advancing well, also as new development at its Borax operations, including the prefeasibility of and acid boric plant, the chemical plant relocation and exploration in undeveloped deposits. In the production side, San Jose showed another strong year, with 10% increase in last year versus 2012.

POSCO, Korea’s largest steel producer, signed a strategic agreement with Lithium Americas: the Asian company will develop its latest technology in lithium processing by installing a pilot plant.

U3O8 Corporation signed an agreement for near-term production of frac sand. And on the exploration side Argentex, Minsud and Meryllion showed different development stages in their respective properties.

Orocobre Limited: Quarterly Report of Operations for the Period Ended 31 December 2013
Olaroz Lithium-Potash-Boron Project - Construction Update // Borax Argentina // Boric Acid Plant Pre-Feasibility Study //
Borax Plant Relocation // Porvenir // Tincalayu // Other deposits

San Jose Mine 2013 production up 10% over 2012
McEwen Mining's attributable production from the San José mine during Q4 2013 totaled 29,407 gold eq. oz (12,999 gold oz and 853,225 silver oz) and the full-year production totaled 108,326 gold eq. oz (48,425 gold oz and 3,114,832 silver oz). McEwen Mining's share of production from San José in 2014 is forecasted at 97,500 gold eq. oz (44,000 gold oz and 3,200,000 silver oz). Production costs will be released with year-end financials in early March.

Lithium Americas Announces Co-Operation Agreement With POSCO
Lithium Americas Corp. announced that it has signed a Co-operation Agreement with POSCO, Korea's largest steel company and a leader in the development of advanced materials processes. Pursuant to the Agreement, POSCO will locate its next generation lithium extraction pilot plant at Lithium Americas' Cauchari-Olaroz project in the province of Jujuy. The pilot plant is expected to be operational at the Project during the fourth quarter of 2014.

U3O8 Corp. Signs Agreement for Near-Term Production Potential of Frac Sand from Its Carina Property
U3O8 Corp., a Canadian-based company focused on exploration and development of uranium resources and associated commodities in South America, has granted rights to a 100 hectare ("Ha") area of its Carina property in Chubut Province, to an Argentine operator for which U3O8 Corp. will receive annual cash option payments and a 7.5% gross royalty on production ("NSR"). The Carina property contains silica sand for potential use in the production of oil and gas from shale.

Argentex Announces Final Drill Results From Its Pinguino Silver-Gold Project
Argentex Mining Corporation announced final drill results from its 58-hole, 3,003-metre 2013 Phase IX resource development drill program at its 100%-owned Pingüino silver and gold project, located in Santa Cruz Province.

Minsud Resources Corp.: Exploration Update on the Minas De Pinto Sector, Chita Valley Project
Minsud Resources Corp. announced geological mapping and surface channel sampling results from the Minas de Pinto sector of the Chita Valley diatreme volcanic vent/porphyry complex located in San Juan province.

Meryllion Commences Exploration at Its Cerro Amarillo Property
Meryllion Resources Corporation has commenced its austral summer campaign of exploration on its Cerro Amarillo copper-molybdenum-gold property in San Juan province. All necessary authorizations have been issued by the relevant authorities and written permission to access the property and to carry out the exploration has been received from the surface rights owner.

 

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Orocobre Limited: Quarterly Report of Operations for the Period Ended 31 December 2013

 
 

Olaroz Lithium-Potash-Boron Project - Construction Update

The construction of the project continues to proceed on time and within budget and a total of approximately $164m has been spent or committed via executed contracts in the construction project. In terms of physical progress the construction program is approximately 75% complete.

Since the last quarterly report, the Company announced the pumping rate had reached approximately 190l/s. The steady state operational rate required is 180l/s with a peak filling rate of approximately 220l/s. The liming plant commissioning schedule commenced on the 15th December and commissioning will be complete by the end of January. The precommisioning schedule for the gas pipeline commenced on 13th of December as planned. Evaporation pond earthworks remain ahead of schedule. The electricity generation plant is near completion. Testing on the natural gas pipeline was completed in early January and the next task is to connect to the main Gas Atacama pipeline. Construction works continue on the lithium processing plant, finished goods warehouse and the soda ash warehouse.

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 as a key success factor, training local people under the supervision of high quality experienced professionals.

The Olaroz Project is Orocobre's flagship project located in Jujuy province. Together with partners, Toyota Tsusho Corporation ("TTC") and Jujuy Energia y Mineria Sociedad del Estado ("JEMSE"), Orocobre is building the first large scale "green fields" lithium brine project in approximately 20 years at a capital cost of US$229.1m and will have a design capacity of 17,500tpa of battery grade lithium carbonate. The Olaroz Project joint venture is operated through Argentine subsidiary Sales de Jujuy SA. The effective Olaroz Project equity interest is Orocobre 66.5%, TTC 25.0% and JEMSE 8.5%.

Borax Argentina

Borax Argentina has extensive operations and has a fifty year production history producing borax chemicals, boric acid and boron minerals. The production currently comes from three principal mines at Tincalayu, Sijes and Porvenir with concentrators at the first two locations and a chemicals plant at Campo Quijano (in Salta province) producing refined products. The borax circuit at the chemicals plant is in the process of being relocated to the Tincalayu mine where the mineral for borax production, tincal, is mined. There are historical estimates on the mineralisation at these mines and at two undeveloped deposits. These estimates currently form the basis for both the current operations and plans for developing the business.

Approximately 11,410 tonnes of combined products were sold during the quarter. This is an increase on the previous quarter and also 14% above the same quarter last year. Market conditions are still soft with downward pressure on prices and strong competition however, there are signs that the market cycle will move out of the trough during the 2014 calendar year. In spite of the challenging market conditions, Borax Argentina achieved record sales during the quarter in terms of both volume and revenue.

Boric Acid Plant Pre-Feasibility Study

On 4 November, 2013, the Company advised of the commencement of a prefeasibility study into the construction of a new 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 of boric acid.

The plant flow sheet will be designed to allow treatment of lower "run-of-mine" grade ores than are currently being processed and with the aim of obtaining higher recoveries and reduced operating costs. Currently, ore is mined at less than 20% B2O3 and upgraded by hand methods and screening to 26% for cartage to Campo Quijano. 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 a 35% contingency.

The pre-feasibility study is scheduled to be completed during 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.

Currently, Borax Argentina produces boric acid from a 9,000 tonnes per annum plant at Campo Quijano, 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.

Boric acid is used in a wide variety of applications including glass, ceramics, fertilisers and wood preservatives. The market has a growth profile above world GDP growth. For standard and agricultural grade boric acid, pricing has ranged approximately between US$750/t to $1,250/t CIF over the past 5 years.

Borax Plant Relocation

The Company announced a significant advance at its 100% subsidiary Borax Argentina on 1st July with the decision to relocate the borax chemical plant from its current location in Campo Quijano (close to the city of Salta) to the Tincalayu mine site where the mineral, tincal, used to make borax is mined. The Borax Argentina chemical plant produces borax decahydrate, borax pentahydrate and anhydrous borax.

The relocation of the borax plant to the Tincalyu mine site will have significant benefits through both the reduction of operating unit costs and also increasing overall mineral recovery from the mine.
The progress on the project is running to plan with a high rate of activity occurring now through to March 2014. Currently, the project is running on schedule and within budget. The completion date for the project is forecast to be June 2014. The Company considers this project an exciting development which will position the Borax Argentina business well for the future.

Porvenir

As advised last quarter, and in order to fit into the Boric Acid plant PFS, the company prioritised the work to upgrade the Porvenir historical estimate to JORC compliant resources. The mineralisation at Porvenir, ulexite, is currently used to make boric acid at the boric acid plant in Campo Quijano and is the most probable initial ore source for the possible plant at Olacapato. Pulps from the original drilling programs were sent for re-assay at the company's own laboratories and independent laboratories and the geological data was re-interpreted. Modelling has been completed and public reporting will be finalised once the mining study and cut-off study have been completed as part of the boric acid plant PFS. This is expected during the current quarter.

Tincalayu

During the quarter, work continued on the programmes to convert the Tinaclayu historical estimates to JORC compliant resources. The work programme has involved so far:

•Extensive pit mapping to provide geometrical controls of stratigraphy and structures which will be correlated later with past flitch plans and drill logs
•Geochemical sampling of different horizons to provide controls on past drilling and bench plans
•Re-assaying of drill core pulps by the company's laboratory and external laboratory

Other deposits

Concurrently with the final work on Tincalayu, work has started on the salar hosted ulexite deposits at Diablillos. The scope of this is very similar to the Porvenir study scope and can be completed quickly, most likely in the next quarter. On completion, the focus will move to the tertiary Sijes hydroboracite deposit.

 

 

San Jose Mine 2013 production up 10% over 2012

 
 

McEwen Mining's attributable production from the San José mine during Q4 2013 totaled 29,407 gold eq. oz (12,999 gold oz and 853,225 silver oz) and the full-year production totaled 108,326 gold eq. oz (48,425 gold oz and 3,114,832 silver oz). McEwen Mining's share of production from San José in 2014 is forecasted at 97,500 gold eq. oz (44,000 gold oz and 3,200,000 silver oz). Production costs will be released with year-end financials in early March.

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** Gold equivalent ounces are calculated at a ratio of 52:1 for 2012 and 2013.

 

 

 

Lithium Americas Announces Co-Operation Agreement With POSCO

 
 

Lithium Americas Corp. announced that it has signed a Co-operation Agreement with POSCO, Korea's largest steel company and a leader in the development of advanced materials processes. Pursuant to the Agreement, POSCO will locate its next generation lithium extraction pilot plant at Lithium Americas' Cauchari-Olaroz project in the province of Jujuy. The pilot plant is expected to be operational at the Project during the fourth quarter of 2014.

In recent years, POSCO has been developing an innovative lithium extraction technology, which is both much faster than traditional brine evaporation technology, and minimizes the environmental footprint associated with large scale evaporation ponds. Lithium Americas looks forward to working with POSCO and their lithium team to pursue the application of this advanced lithium extraction technology that significantly shortens the commercial production timeline for lithium and potassium compared to traditional evaporation technology.

The Co-operation Agreement assigns business responsibilities between POSCO and Lithium Americas, whereby POSCO will be responsible for the development of the technology and management and operation of the pilot plant, while Lithium Americas will provide resources in the form of brine and local support. The Agreement is limited to pilot plant operations, but provides for an exclusivity period in the future to negotiate terms of a commercial stage operation. Costs of building, delivering and operating the pilot plant will be borne by POSCO, which also retains 100% ownership of the pilot plant.

 

U3O8 Corp. Signs Agreement for Near-Term Production Potential of Frac Sand from Its Carina Property

 
 

U3O8 Corp., a Canadian-based company focused on exploration and development of uranium resources and associated commodities in South America, has granted rights to a 100 hectare ("Ha") area of its Carina property in Chubut Province, to an Argentine operator for which U3O8 Corp. will receive annual cash option payments and a 7.5% gross royalty on production ("NSR"). The Carina property contains silica sand for potential use in the production of oil and gas from shale.

The frac sand opportunity on the Carina property provides U3O8 Corp. with potential for modest cash flow in the short-term without further expenditure from the company, while giving shareholders exposure to a fast-growing market; frac sand production in the US has increased almost 500% between 2009 and 2013 to 31 million tonnes ("t") per annum.

Frac sands are made up of tiny silica beads that are pumped down production wells to hold induced fractures in shale open so that oil and gas can seep out of the otherwise impermeable rock. Frac sands are critical to the shale oil industry with each well typically requiring around 2,000t of frac sand to maintain production. In Wisconsin, which accounts for 75% of the US market, frac sand-mining has grown to be a $1 billion per annum industry over the last three years.

The quartz sand that contains the silica beads at Carina is exposed at surface over an area of approximately 500Ha in a bed that averages approximately 10 metres thick with potential to extend further beneath younger cover. The sand would be excavated in a quarry in which no blasting nor crushing would be required. The sand would be screened to concentrate and extract the silica beads of the required size. The screening is done with water - no chemicals are used. Indications are that beneficiation of the Carina sand by more stringent screening could result in a product that has all the optimal characteristics required for frac sands under ISO 13503-2 standards.

 

Argentex Announces Final Drill Results From Its Pinguino Silver-Gold Project

 
 

Argentex Mining Corporation announced final drill results from its 58-hole, 3,003-metre 2013 Phase IX resource development drill program at its 100%-owned Pingüino silver and gold project, located in Santa Cruz Province.

The results from the Phase IX program were very successful in identifying new high grade mineralisation outside of the existing resource. Argentex believes that the impact on an updated resource will be value adding, given that the new areas are relatively shallow and generally of oxide material. The Tranquilo drilling has significantly expanded the area of high grade mineralisation discovered to date. Additionally, hole PR309-13 in the Luna vein may also represent a new high grade zone at a relatively shallow level, which remains open along strike and at depth. Pinguino still have numerous targets in untested veins and in open areas of known veins that may add additional oxide resources. The most significant upside potential remains relatively untested, which is the deeper primary vein mineralisation. Based on the results to date, the company believe the resource has considerable potential for expansion with relatively low risk drilling. In the meantime, the exploration team is expediting an updated mineral resource in a revised technical report.

The shallow drilling on Tranquillo vein has significantly expanded the high grade zone of silver mineralisation in its northern area. The vein is covered by relatively thin post Jurassic sediments that blanket that area of the project . Oxide mineralisation remains open along strike to the north, and at depth in sulphide mineralization, to the south.

The moderate amount of drilling on the Luna vein excluded it from the 2012 resource model as higher priority veins, based on a tonnes and grade expectation. This round of drilling has changed the perspective, with hole PR309-13 indicating possible high grade material in the northern area of the vein. The Luna vein mineralisation has very similar mineralogical and geochemical characteristics to the Tranquilo vein, and it too shows potential for high grade oxide mineralisation along strike and at depth for sulphide mineralisation.

Drilling results from Savary indicate consistent low to medium grade gold and silver along the length of the vein. Its higher ratio of gold to silver suggests that mineralisation is associated with the earlier higher temperature mineralisation seen at Pingüino (including Ivonne and Ivonne Norte veins). Mineralisation appears to be strongly controlled in grade terms by the presence of cross-cutting structures. Hole PR294-13, which intersected 3 m @ 2.21 g/t gold and 110.7 g/t silver, is located near the intersection with the ENE-WSW Kasia vein. Although the level of oxidization encountered at Savary is quite shallow, there remains considerable potential for high grade shoots associated with cross cutting structures, as seen in PR224-12, which intersected 5 m @ 18.66 g/t gold and 355.2 g/t silver and is located near the intersection with the ENE-WSW striking Karina vein.

The Tranquilo Sur drilling has confirmed the presence of wide zones of lower grade veinlet-hosted silver mineralisation around a narrower (2 to 3 m) brecciated vein grading up to 134.7 g/t silver. This is consistent with gossanous outcrop exhibiting multiple structural events including some that post-date mineralisation.


 

Minsud Resources Corp.: Exploration Update on the Minas De Pinto Sector, Chita Valley Project

 
 

Minsud Resources Corp. announced geological mapping and surface channel sampling results from the Minas de Pinto sector of the Chita Valley diatreme volcanic vent/porphyry complex located in San Juan province.

The Project is a large exploration stage Tertiary diatreme volcanic vent/porphyry complex with classic alteration features, widespread porphyry style copper-molybdenum-silver-gold mineralization, and associated gold and silver-bearing veins.

The Minas de Pinto sector is essentially an easterly trending swarm of discontinuous quartz veins containing variable concentrations of polymetallic sulphides and widespread localized gold-silver mineralization that has been traced for 4.0 kilometers along strike. This is part of the 12 km strike length Chita Valley Complex trend.

The Minas de Pinto corridor contains various artisanal diggings of unknown age and an early 20th Century exploration adit. Silex Argentina S.A., an unrelated company, optioned the Minas de Pinto property in the mid-2000's, completing extensive geological mapping and surface grab and channel sampling for a total of 1,631 samples by 2007. In 2008 the company drilled 22 diamond drill holes totalling 2,631.25 metres. The full data set pertaining to the latter work was turned over to the property owner upon termination of the option agreement. In 2011, Minsud completed two diamond drill holes totalling 435.5 metres to test the earlier results, with one (CHT11-24) being a twin of previous hole CHT-004. The current program includes detailed geological and alteration mapping together with selective surface channel sampling.

The 2013 geochemical sampling program consisted of 43 sawn channel sample sections for a cumulative total of 526 samples. Sampling highlights including all sections averaging > 1 g/t gold or >30 g/t silver.

The recommended ongoing work program in the Minas de Pinto area is threefold:

1.A short to medium term objective to further develop some of the more promising targets such as the Argentina, Carmen, and Pulenta Vein target areas to the outline drilling stage if warranted. This will require more accurate survey control than is currently available utilizing DGPS methodology, detailed geological mapping at 1:500 scale, mechanical trenching for mapping and sampling purposes, careful geological and structural analysis to develop drilling targets, and finally, if warranted, the implementation of a drilling program.

2.In the short term, to continue the systematic mapping and sampling program into the remainder of the property.

3.In the medium to long term, to conduct geophysical surveys including additional magnetic surveying together with IP/Resistivity and/or other surveys, as warranted, to develop porphyry and epithermal mineralization targets in both Tertiary and Permo-Carboniferous intrusive bodies.

 

Meryllion Commences Exploration at Its Cerro Amarillo Property

 
 

Meryllion Resources Corporation has commenced its austral summer campaign of exploration on its Cerro Amarillo copper-molybdenum-gold property in San Juan province. All necessary authorizations have been issued by the relevant authorities and written permission to access the property and to carry out the exploration has been received from the surface rights owner.

The Cerro Amarillo project area is 168 km2 and contains three porphyry prospects, Cerro Amarillo ("CA"), Cajon Grande ("CG"), and C4, which lie in a corridor trending from northeast to southwest, respectively.

The CA prospect contains a classical porphyry-style mineralized system which includes stockwork, disseminated, breccias, skarn, and vein-types of mineralization. These appear zoned, with a central quartz diorite porphyry plug containing well developed quartz-magnetite stockworks and disseminated chalcopyrite surrounded by mineralized hydrothermal breccias with abundant pyrite.

At CG, the porphyry intrusions also exhibit copper mineralization and associated hydrothermal alteration, and earlier sampling results have indicated the presence of anomalous values of molybdenum and gold. The alteration includes an early stage potassic (quartz biotite) event with which some of the copper mineralization is associated.

The C4 system in the southwest is believed to have the potential to host large zones of mineralized porphyry and breccia, as evidenced by float samples of dacite porphyry and mineralized breccia. There is extensive hydrothermal alteration developed over a six kilometer strike. This alteration includes zones of quartz pyrite with argillic overprinting developed over a strike of at least two kilometers, and extending beyond that into shears and peripheral breccia zones.

In addition to the three well defined prospects, there are an additional four colour/alteration anomalies (C2, C3, La Tienda and Vacas Muertas), which the Company could explore in future exploration campaigns.

The large scale footprint of the porphyry systems identified to date, and especially C4, is indicative of the large tonnage copper-molybdenum-gold potential for the property. Furthermore, Cerro Amarillo's geological similarity to the world class El Teniente and Los Bronces deposits as well as its the location within the extension of the same Neogene magmatic arc is positive for future exploration success.

Meryllion's program comprises detailed geological mapping, geochemical sampling, and geophysical surveying together with property-wide prospecting.

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

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