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•• Monthly Mining Bulletin Nº27
April - 2014 - PANORAMA MINERO
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Mining in Argentina – What happened in March?

During March, Orocobre announced Olaroz project and Borax plant relocation updates: the lithium project will begin its production during the second half of 2014. In Patagonia region, McEwen Mining commented not only San Jose mine production during last year, but also referred to an increase in its mineral resource. Also in Santa Cruz province, Minera IRL began construction at Don Nicolás project, with the aim of begin production early next year. In Cuyo Region, NGEx is fast tracking its Josemaría and Filo del Sol projects. Hunt Mining, Argentex Mining and Marifil Mines are progressing well in their respective properties.

It is important to say that several junior companies like Lithium Americas, U3O8 Corp. and Rodinia Lithium succeeded in order to get finance in a difficult environment.

Orocobre Limited: Olaroz Lithium Project Construction & Borax Plant Relocation Updates
Orocobre Limited advised progress on construction of the flagship Olaroz Lithium Project (Jujuy province)

Updated Reserve & Resource Estimate at San Jose Mine
McEwen Mining Inc. announced an updated mineral reserve and resource estimate for the San José mine (49% owned by McEwen Mining), located in Santa Cruz province.

MAS

Don Nicolás – Production will begin in 2015
During 2013 Minera IRL Limited entered into a definitive agreement with CIMINAS to provide up to $80 million in combined debt and equity related financings as consideration for a 45% stake in Minera IRL Patagonia to develop the Don Nicolás Gold Project, Santa Cruz province.

MAS

NGEx – Josemaría & Filo del Sol Update
NGEx Resources Inc. announced its exploration projects and financial results for the year ended December 31, 2013 and an update of results to date.

MAS

hunt

Hunt Mining Corp Initiates Drilling at La Josefina and La Valenciana Gold and Silver Projects
Hunt Mining Corp. started exploration and development drilling at the Corporation's La Josefina and La Valenciana gold and silver projects in Santa Cruz.

MAS

Final Trenching Results from Pinguino Silver-Gold Project
Argentex Mining Corporation announced the complete trenching results from its 6,000-metre 2013 Phase IX resource development program at its 100% owned Pingüino silver and gold project, located in Santa Cruz Province, including 1.5 metres averaging 4.81 g/t Au and 6771.3 g/t Ag.

MAS

Marifil Mines Ltd.: Drilling Update on Cerro Samenta Porphyry Copper
Marifil Mines Limited reported that drilling began on February 3rd on its Cerro Samenta porphyry copper project in Salta Province.

MAS

Lithium Americas Closes Over-Subscribed Rights Offering for Gross Proceeds of Approx. $18.55 Million
Lithium Americas Corp. commented that it has received gross proceeds of approximately $18.55 million before expenses as a result of the successful closing of its over-subscribed rights offering through the issuance of 77,308,481 common shares at a subscription price of C$0.24 per common share.

MAS

U3O8 Corp. Completes Oversubscribed Private Placement
U3O8 Corp, a Canadian-based company focused on exploration and development of uranium resources and associated commodities in South America, has completed its previously announced non-brokered private placement.

MAS

Rodinia Lithium Closes First Tranche of Private Placement Financing
Rodinia Lithium Inc. has closed the first tranche of its previously announced non-brokered private placement financing for gross proceeds in the amount of $872,500.

MAS

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Orocobre Limited: Olaroz Lithium Project Construction & Borax Plant Relocation Updates

 
 

Orocobre Limited advised progress on construction of the flagship Olaroz Lithium Project (Jujuy province):

•Liming plant fully commissioned and magnesium removal from brine commences as brine is pumped from pond 4B to 4A
•Gas pipeline completed and awaiting connection by Gas Atacama
•Construction projected to be completed on time and within budget

In terms of physical progress the construction program is approximately 80% complete. A total of approximately US$178m has been spent or committed via executed contracts in the construction project to date.

The southern bore field brine duct was commissioned on 26th February and now delivers brine directly into pond 4B from the southern field. This replaces the temporary trench system which was moving brine to the northern field intermediate pump station.

The liming plant commissioning was officially completed on 10th February. This was marginally behind the end of January target due to issues with the electrical control circuits for the ball mill motor. With the liming plant now commissioned, magnesium removal from the brine is occurring as brine is pumped from pond 4B to 4A. This is an important step in the process of brine purification.

The gas pipeline has been completed and the company is now awaiting the gas branch line connection from Gas Atacama to be completed in order to commission the use of natural gas. This is expected to occur in the next two months. There are two gas generators on site with a further seven units in transit.

The reverse osmosis plant is ready for delivery and is undergoing the import approval process, the completion of which is imminent. Construction works continue on the lithium processing plant, finished goods warehouse and the soda ash warehouse.

The Olaroz lithium project is being developed by Orocobre (66.5%) with partners Toyota Tsusho Corporation ("TTC") (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.

Borax Plant Relocation
The company commented on the progress on the relocation of the borax chemical plant.

•Dismantling of existing equipment at Campo Quijano is 92% complete
•Installation of new equipment at Tincalayu is 85% complete
•The project continues to progress on time and within budget with 70% of the budget spent or committed

The project is about to enter into the final quarter of the relocation and construction programme with the target completion date being the end of June 2014.

The following is a summary of what has been achieved to date:

•Complete Engineering Design
•Repair and maintenance of existing equipment at Tincalayu, 73% complete
•Civil work at Tincalayu, 89% complete
•Dismantling of existing equipment at Campo Quijano, 92% complete
•Repair and maintenance of equipment at Campo Quijano commenced in January and is 44% complete
•Construction and installation of new equipment is 85% complete which includes the installation of the dissolver (86%), overflow tanks (92%), hot air generator (57%), decanters (82%), generators (93%), centrifuges (86%), and electrical works (86%)
•The flocculant plant is 54% complete

The project continues to progress on time and within budget with 70% of the budget spent or committed.

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. Historically, run-of-mine ore at 17% B2O3 has been concentrated at Tincalayu using dry magnetic separation to produce a 21% grade which is then transported 350 kms from Tincalayu to Campo Quijano for production of borax chemicals. Recovery through the dry magnetic separation plant has previously been only approximately 60%. When the borax plant relocation to the Tincalayu mine site is complete the borax plant will treat run-of-mine ore without the use of the magnetic separation plant. This will result in:

•no loss of mineral content prior to the borax plant as there will be no concentration stage
•removal of the operating costs of the dry magnetic separation concentration stage
•improvement in the freight cost profile by cartage of finished products with grades between 37% and 49% B2O3 as opposed to a 21% grade concentrate.
The capital budget for the project is US$3.7m net of existing plant and equipment.

 

 

Updated Reserve & Resource Estimate at San Jose Mine

 
 

McEwen Mining Inc. announced an updated mineral reserve and resource estimate for the San José mine (49% owned by McEwen Mining), located in Santa Cruz province. The updated estimate continues to demonstrate that San José is one of the highest-grade precious metal mines in the Americas that continues to replace its mined ounces even with record production. The mineral reserve and resource estimates were calculated using US$1,200 per ounce gold and US$20 per ounce silver. The estimates were independently audited by P&E Mining Consultants Inc.

San José Mine Reserve & Resource Highlights (100% Basis)

•Proven and Probable gold and silver reserves increased by 12% and 12% respectively, to 409,400 ounces gold and 30.1 million ounces silver, contained in 1.8 million tonnes. Gold grades increased by 9% to 7.03 gpt and silver grades increased by 10% to 515 gpt.
•Measured and Indicated gold and silver resources increased by 6% and 7% respectively, with 1.05 million ounces gold and 72.8 million ounces silver, contained in 4.4 million tonnes. Gold and silver grades increased by 6% to 7.45 gpt gold and 515 gpt silver.
•Inferred gold and silver resources were down slightly from 2012 with 430,500 ounces gold and 27.1 million ounces silver, contained in 1.9 million tonnes. Gold grades decreased by 2% to 7.23 gpt and silver grades decreased by 4% to 455 gpt.

Solid Growth Continues
Production for 2013 increased by 10%, to 221,073 gold equivalent ounces (converting silver into gold using a 52:1 ratio), consisting of 98,827 gold ounces and 6,356,801 silver ounces. Production attributable to McEwen Mining for 2013 was 108,326 gold equivalent ounces, consisting of 48,425 ounces of gold and 3.1 million ounces of silver. Net of this production, total reserves increased by 12% for gold and 12% for silver, to an estimated 1.8 million tonnes at a grade of 7.03 gpt gold and 515 gpt silver, for a total of 409,400 ounces of gold and 30.1 million ounces of silver. Gold grades increased by 9% to 7.03 gpt and silver grades increased by 10% to 515 gpt.

In addition to increasing reserves, the exploration program in 2013 was focused on finding extensions of the known resource while also upgrading the resource previously classified as Inferred. The mine is consistently replacing production within the Measured and Indicated resource categories. The contained ounces of gold and silver within the 4.4 million tonnes of the Measured and Indicated resources are up from 2012 by 6% and 7% respectively for a total of 1.05 million ounces gold and 72.8 million ounces silver. Gold and silver grades both increased by 6% to 7.45 gpt gold and 515 gpt silver.

Inferred gold and silver resources were down as a result of the increase in the Measured and Indicated resources versus 2012, with Inferred resources totaling 1.9 million tonnes at a grade of 7.23 gpt gold and 455 gpt silver, for a total of 430,500 ounces of gold and 27.1 million ounces of silver, representing a decrease of 13% for gold and 16% for silver from 2012. Gold grades decreased by 2% to 7.23 gpt and silver grades decreased by 4% to 455 gpt.

The San José mine is owned and operated by Minera Santa Cruz S.A., a joint venture owned 51% by Hochschild Mining Plc and 49% by McEwen Mining Inc.

In 2013, McEwen Mining and Hochschild Mining, entered into an agreement to contribute their respective exploration properties around the mine to the San José joint venture. For much of 2013, the exploration program at San José focused on the geological mapping of the district area, identifying new structures located south and southeast of the property. A total of approximately 10,529 metres of drilling was completed during the year.

 

 

Don Nicolás – Production will begin in 2015

 
 

During 2013 Minera IRL Limited entered into a definitive agreement with CIMINAS to provide up to $80 million in combined debt and equity related financings as consideration for a 45% stake in Minera IRL Patagonia to develop the Don Nicolás Gold Project, Santa Cruz province. Subsequent to the end of 2013, construction on the Don Nicolás Project commenced, and production is expected in the first quarter of 2015.

A development team has been assembled and the detailed engineering and procurement process has commenced. Site mobilization has occurred and construction of the infrastructure, mining and processing facilities began in the first quarter of 2014. The funding required to construct the Don Nicolás Gold Mine is being provided by the joint venture partners, Compañía Inversora en Minas ("CIMINAS"), as announced on 19 August 2013, who agreed to provide up to $80 million in financing for the construction of Don Nicolás as consideration for their earn-in to the project. Accordingly, Minera IRL does not expect to have any significant direct costs associated with the joint venture in 2014.

Commissioning of the Don Nicolás mine and processing plant is expected in late 2014 (from the fourth quarter of 2014) and first production is expected in the first quarter of 2015 (from late 2014). Minera IRL's share of 2015's gold production from Don Nicolás is expected to be approximately 25,000 ounces.

There is also a feasibility study underway for a heap leach plant to operate in parallel to the milling operation to treat a significant resource of lower grade mineralization that is in addition to the existing reserve base. This represents a significant opportunity to potentially increase annual gold production, extend the mine life and enhance the project's overall economics. This report is expected to be completed during 2014 (from late 2013).

 

 

NGEx – Josemaría & Filo del Sol Update

 
 

NGEx Resources Inc. announced its exploration projects and financial results for the year ended December 31, 2013 and an update of results to date.

During the year ended December 31, 2013 exploration activity continued on the Company's projects in Chile and Argentina as well as in Canada. Exploration on the Company's South American projects takes place during the South American summer season which typically runs from October until April. Because the field season overlaps the calendar year end, exploration programs are broken out below by field season rather than calendar year.
Highlights from the 2012/2013 season include:

  • Completion of 44,000 metres of drilling on the Company's South American projects including Los Helados (Chile), Josemaria and Filo del Sol in San Juan province during the 2013 field season (October 2012 to April 2013);
  • At Josemaria 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.
  • Completion on January 29, 2013 of a non-brokered, private placement of 10 million shares of the Company at a price of $3.40 per share for gross proceeds of $34 million.

Additional highlights from the 2013/2014 field season (November 2013 to date) included:
•At Josemaria, a total of 7,310 metres in 14 holes was completed during the field season.
•At Filo del Sol, a total of 8,208 metres in 23 holes was completed during the field season. On March 17, 2014, the Company announced the results of the first seven holes which significantly extended the previously identified manto zone and expanded the broader zone of disseminated copper, gold, and silver mineralization that surrounds the high grade zone.

Josemaria Project
Drilling for the 2013/2014 field season was initiated in November 2013 and completed in February 2014 with a total of 7,310 metres drilled. This drill program was designed to define the high-grade supergene zone at the north end of the deposit and test for a possible extension of this zone to the northwest of previous drilling. Several larger step-out holes were also planned in order to test a broad area of leached cap extending to the north and northwest of the main deposit area. Two of the holes intersected the supergene zone; JMDH78 with 340 metres at 0.63% CuEq* (0.54% Cu and 0.11 g/t Au) and JMDH80 with 432.5 metres at 0.61% CuEq* (0.44% Cu and 0.22 g/t Au). Two holes to collect geotechnical data to help guide mine planning studies were included in this program.

Following receipt of an updated resource estimate for Josemaria in the second half of 2013 the Company asked an independent third party engineering group to conduct a high level assessment of possible development options for the project. The scope of this ongoing option study includes an evaluation of potential mining methods and production rates, geotechnical drilling, ongoing metallurgical test work, and development of high level processing flow sheets and mass balances.

Work is ongoing and a variety of potential development scenarios continue to be considered. The Josemaria resource includes a shallow higher grade core and opportunities for the early production of this material are being investigated. Metallurgical test work is ongoing at Josemaria. Baseline environmental programs, including review of areas for potential infrastructure are underway, with field work in progress during the current South American summer season.

Filo del Sol Property
In early 2013 a total of 820 metres were drilled at Filo del Sol. The drill program was concluded on February 18, 2013. This drill program which was part of the 2012/2013 summer exploration 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.

The 2013/2014 drill program which began in December 2013 was designed to provide sufficient data to allow the estimation of an initial mineral resource for the stratabound, high-grade silver-copper zone which forms part of this large mineralized system. A secondary goal was to explore the area to the north of the current drilling, where the geological interpretation suggests the occurrence of a feeder zone to the stratabound mineralization.


 

Hunt Mining Corp Initiates Drilling at La Josefina and La Valenciana Gold and Silver Projects

 
 

Hunt Mining Corp. started exploration and development drilling at the Corporation's La Josefina and La Valenciana gold and silver projects in Santa Cruz. Drilling began first on the Corporation's Flagship La Josefina Project followed by a second drill campaign on the La Valenciana Project, located west of La Josefina and north of Coeur Mining Inc.'s Joaquin Project. The drill services contract was awarded to MD Perforaciones S.A., a division of Eco Minera S.A. of Argentina, from bids solicited over the last several weeks. The plan includes a minimum of 5,000 meters of HQ Diamond Core drilling distributed over six or more individual precious metal bearing targets at both La Josefina and La Valenciana.

 

Final Trenching Results from Pinguino Silver-Gold Project

 
 

Argentex Mining Corporation announced the complete trenching results from its 6,000-metre 2013 Phase IX resource development program at its 100% owned Pingüino silver and gold project, located in Santa Cruz Province, including 1.5 metres averaging 4.81 g/t Au and 6771.3 g/t Ag.

The trenching program was undertaken principally to extend the areas of known near-surface mineralisation at Pingüino. In addition to providing better continuation to the high grade zone at Tranquilo, the trenches have extended and confirmed the presence of good medium to high grade gold mineralisation at surface in the more easterly veins at Savary and the CSS-CSV group, which is a very encouraging outcome.

The trenching plays an important role in characterising remnant mineralisation in the oxidized zone at Pingüino. The low silver grade in the trenches is generally not correlated to grade at depth. This is typical for leached material. However, higher grade mineralisation in the trenches is strongly correlated to the presence of supergene enriched, high grade silver zones.

The Pingüino system has grown to 70+ individual veins, with a combined strike length approaching ~113 line-kilometers. The Pingüino project is unique within the Deseado Massif region of Santa Cruz province in that it contains two different and spatially distinct types of mineralisation; a precious metal intermediate sulphidation epithermal system and a polymetallic sulphide-rich system.

 

 

Marifil Mines Ltd.: Drilling Update on Cerro Samenta Porphyry Copper

 
 

Marifil Mines Limited reported that drilling began on February 3rd on its Cerro Samenta porphyry copper project in Salta Province. The Company's joint venture partner, Southern Copper Corp. (SCCO), plans to drill six holes totalling about 3,000 meters.

DDH-1-S-14 was drilled at an angle of -45° to a depth of 500 meters. Persistent supergene copper mineralization is observed in the core throughout the first 125 meters. This mineralization includes neoticite (a manganese copper oxide), malachite, and chrysocolla (the latter two are oxide copper minerals). A second interval from 220 and 260 meters shows stronger oxide copper mineralization.

DDH-2-S-14 is located about 350 meters southeast of DDH1 and was in progress when a Company representative was present. A third drill site has been set in the valley to the east of and well below the elevation of the first two holes in order to achieve a deeper penetration of the observed copper mineralization.

Marifil reported channel sampling copper assay results of ten trenches located in the vicinity of DDHs 1 & 2 prior to venturing the property with SCCO. Trenches I and M are located 200 to 400 meters east of a line between DDH 1 and DDH 2. Trench I contains 52 meters of 1.21% copper, and Trench M exposes 22 meters of 4.19% copper.

Five SCCO geologists are working on the property. In addition to the drilling, they are accomplishing grid geochemical sampling (so far 1,322 samples), detailed geological and topographic mapping and surveying, and continuous rock chip sampling using an excavator for trenching. This work defines a three phase granodioritic porphyry system with associated volcanics. The two earlier phases are mineralized with copper; the youngest phase is un-mineralized.

Marifil's Cerro Samenta property is a porphyry Cu-Mo prospect located 270 kilometers west of the city of Salta in the Puna region of northwestern Argentina. It covers 5,300 hectares located on the transverse continental scale Archibarca Lineament, which also localizes Escondida situated 120 kilometers to the northwest of Samenta in Chile, as well as several other porphyry copper properties in the region including the nearby Taca Taca copper-gold molybdenum deposit (Lumina Copper Corp.) and also the Rio Grande (Regulus Resources Inc.) and Lindero/Arizaro (Goldrock Mines Corp.) copper-gold deposits.

 

Lithium Americas Closes Over-Subscribed Rights Offering for Gross Proceeds of Approx. $18.55 Million

 
 

Lithium Americas Corp. commented that it has received gross proceeds of approximately $18.55 million before expenses as a result of the successful closing of its over-subscribed rights offering through the issuance of 77,308,481 common shares at a subscription price of C$0.24 per common share.

Under the rights offering, 65,120,902 common shares were issued under the basic subscription privilege extended to rights holders (representing over 84% of the total shares on offer) with 12,187,579 additional common shares issued pursuant to exercises of the additional subscription privilege.
As previously announced, the Company's largest shareholder, Geologic Resource Partners LLC, through four funds that it manages, agreed to act as a standby purchaser in respect of the rights offering in consideration for a fee equal to 3% of the gross proceeds of the offering. Geologic purchased a total of 22,094,912 common shares under its basic and additional subscription privileges under the offering.

The net proceeds of the rights issue will be used by the Company to repay all its outstanding debt, currently approximately $9.5 million, and for general working capital purposes, including the continuing funding of its flagship Cauchari-Olaroz lithium project in Jujuy province.  The total number of issued and outstanding shares of the Company is now 154,616,962.

In the foreseeable future, the principal development focus will be on implementing the previously announced Co-operation Agreement with POSCO, pursuant to which POSCO will be delivering their PP3 pilot plant to Cauchari location.

 

 

U3O8 Corp. Completes Oversubscribed Private Placement

 
 

U3O8 Corp, a Canadian-based company focused on exploration and development of uranium resources and associated commodities in South America, has completed its previously announced non-brokered private placement. A further 2,383,384 units ("Units") at $0.13 per Unit (the "Offering") were issued on March 13, 2014 for gross proceeds of $309,840. Together with the placement which closed on February 24, 2014, an aggregate of $1,150,039 in gross proceeds were raised through the issuance of a total of 8,846,454 Units.

Each Unit consisted of one common share of U3O8 Corp. ("Share") and one share purchase warrant ("Warrant"). Each Warrant entitles the holder to purchase one Share at a price of $0.18 for a period of 24 months from the closing date.

All securities issued under the Offering are subject to a 4-month hold period. Finder's fees of $4,020 were paid in connection with this second closing. The Offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals.

The net proceeds of the Offering will be used to advance U3O8 Corp's Laguna Salada Deposit in Argentina as a potential low-cost uranium project and to complete the preliminary economic assessment (PEA) on that project, for exploration projects in Colombia and Guyana, and for general corporate purposes.

 

 

Rodinia Lithium Closes First Tranche of Private Placement Financing

 
 

Rodinia Lithium Inc. has closed the first tranche of its previously announced non-brokered private placement financing for gross proceeds in the amount of $872,500. The Company issued 17,450,000 units (the "Units") at a price of $0.05 per Unit. Each Unit consists of one common share of the Company (a "Common Share") and one common share purchase warrant (each a "Warrant"), entitling the holder to acquire a Common Share at $0.10 until March 27, 2016. In the event the Company decides to increase the size of the private placement, closing of the second and final tranche will occur on or before April 15, 2014.

The Company intends to use the net proceeds to continue development of its Salar de Diablillos lithium-potash property located in Salta Province and for general working capital purposes.

The Common Shares, Warrants and shares underlying the Warrants will be subject to a four month and one day statutory hold period expiring on July 28, 2014. Closing of the private placement transaction remains subject to the receipt of all regulatory approvals, including final approval of the TSX Venture Exchange.

 

 
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Buenos Aires - Argentina
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