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•• Monthly Mining Bulletin Nº28
April - 2014 - PANORAMA MINERO
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Mining in Argentina – What happened in April?

April witnessed important news: the most spectacular example was Yamana’s announcement related to a possible positive decision by late 2014 in order to begin construction: in case of a positive decision, the company would begin construction fast, followed by production in 2016. Also, Yamana Gold advised important results coming from all operations in Argentina: Gualcamayo increased production and had interesting results coming from exploration activities. And in Suyai, located in Chubut province, the company is working in order to apply for the environmental impact study ("EIS") for exploration and development work which will be followed by permitting for an operational EIS within the current mining and environmental laws of the Chubut Province.

In Santa Cruz Province, San José is progressing with its high grade mineralization and one of its owners (McEwen Mining) commented about the operating results of this mining center located in the Deseado Massif.

And, in San Juan province, NGEx continues with its exploration activities in several of its projects at the so-called Vicuña District: Filo del Sol and Josemaría returned encouraging results, advancing also in other technical aspects (metallurgical, environmental)

Malbex and Barrick signed an Agreement to develop Del Carmen project (San Juan Province), a very high promising deposit located just 80 km from Veladero mine, operated by Barrick.

Meryllion is progressing at Cerro Amarillo: several studies (geochemistry, geophysics) show encouraging results in order to prepare for future drilling.

Finally, Minsud acquired two claims from Troy Argentina Limited, and by this way has expanded its land position at Chita Valley Project (San Juan Province)



Yamana Gold Announces First Quarter 2014 Results – Cerro Moro Feasibility Results
Yamana Gold Inc. announced its financial and operating results for the first quarter 2014.

San José Q1 2014 Production Results
Canadian company McEwen Mining Inc. announced production results of San José Mine (Santa Cruz province) for Q1 2014.

MAS

NGEx drilling results at Filo del Sol and Josemaría Projects
On April 30 NGEx Resources Inc. announced results from the final nine holes drilled during the 2014 drill program at the Filo del Sol copper-gold-silver project located in San Juan Province.

MAS

Malbex Resources Inc. and Barrick Gold Corporation Enter into Earn-in Arrangements on the Del Carmen Project
Malbex Resources Inc. announced that it has entered into an agreement with Barrick Gold Corporation relating to Malbex's Del Carmen project in San Juan Province whereby Barrick will have the option to earn in to a 51%, and then a 75%, interest in the Del Carmen Project based on meeting certain expenditure requirements.

MAS

hunt

Geochemical Sampling Program Completed at Meryllion's Cerro Amarillo Cu-Mo-Au Property
Meryllion Resources Corporation announced that its geochemical sampling program for the austral summer campaign of 2013-2014 has been completed at the Cerro Amarillo Cu-Mo-Au (copper-molybdenum-gold) property in west central Argentina. 

MAS

Minsud Acquires From Troy Resources Argentina Ltd. Sucursal Two Claims Adjacent to Chita Property
Minsud Resources Corp. announces that it has acquired two mining claims from Troy Resources Argentina Ltd. Sucursal adjoining Minsud's 100% owned Chita mining concession (San Juan province) for total consideration of a 2% Net Smelter Return (NSR) royalty on future production revenue from the acquired claims.

MAS

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Yamana Gold Announces First Quarter 2014 Results – Cerro Moro Feasibility Results

 
 

Yamana Gold Inc. announced its financial and operating results for the first quarter 2014. Highlights include:

•Production and costs for the first quarter were within budget expectations. 
•Gualcamayo production increased 10% over fourth quarter 2013 and 28% over first quarter 2013 with the contribution from QDD Lower West and Amelia Inés / April 2014 production was a record of approximately 20,000 ounces.
•Updated Cerro Moro feasibility study reduces initial capital expenditure to $126 million; 
•The project is expected to create significant value and provide robust returns.

Gualcamayo (San Juan province)
Gualcamayo produced 38,481 GEO (Gold equivalent ounces) in the first quarter compared with 30,177 ounces produced in the first quarter of 2013, representing a 28% increase as a result of the contribution from the new underground operation. Production was also 10% higher than the fourth quarter of 2013. Higher production was the result of more tonnes mined and processed as the ramp of QDD Main Phase III is now complete and higher grades resulting from the new mineral source of ore Amelia Inés ("AIM") and QDD Lower West ("QDDLW") underground, which were partially offset by lower recoveries.

Production for April is a record of approximately 20,000 ounces for the month representing a 56% increase to average monthly production in the first quarter. This positions Gualcamayo to meet and potentially exceed 2014 budget production expectations. The metallurgy of the ore from AIM and QDD Lower West impacts recoveries as it requires a longer leaching cycle than that of QDD Main, and increases the amount of ore on the heap leach pad. To improve recoveries, a plan is currently under review which contemplates the installation of a filtering station and an increase in volume of treatment capacity. These plant modifications are expected to improve recovery rates beginning later in the year.

Co-product cash costs were $739 per ounce in the first quarter compared with $584 per ounce in the first quarter of 2013. Co-product cash costs for the first quarter were in line with budget although higher than in the first quarter of 2013 due to higher cost underground mining at QDD Lower West. Equally, co-product cash costs were 10% lower than in the fourth quarter 2013. Cash costs were also impacted by local inflationary pressures on labour and camp service costs, which were partly offset by the effect of the devaluation of the Argentina Peso on the portion of the operating cost structure reflected in local currency. The completion of the installation of a conveyor belt, which will reduce the cost of transport of ore from the QDD Lower West underground mine, is underway and expected to improve mining costs later this year.

The Company also continues to progress with studies of the options for processing the newly discovered sulphide resources including Rodado.

Alumbrera (Catamarca province)
The Company's interest in Alumbrera is accounted for as an equity investment. The Company recorded earnings from its 12.5% interest in Alumbrera of $1.2 million for the three months ended March 31, 2014, compared with earnings of $0.1 million for the same period of 2013.

The Company received cash distributions $17.6 million in the quarter ended March 31, 2014, compared with $4.6 million cash distribution in the quarter ended March 31, 2013.
For the quarter, attributable production from Alumbrera was 10,115 ounces of gold and 7.2 million pounds of copper. This compares with attributable production of 8,222 ounces of gold and 6.3 million pounds of copper in the first quarter of 2013.

 

Construction & Development Projects

Cerro Moro (Santa Cruz province)
Cerro Moro is a high-grade gold and silver deposit with similarities to the deposits at the El Peñón and Mercedes mines. With the feasibility study completed, detailed engineering and pre-development work is on track towards a planned construction decision before the end of 2014 targeting initial production in the first half of 2016.

The parameters of the updated feasibility study include an initial capital investment of approximately $126 million, throughput rate of 700 tonnes per day, expected annual production of approximately 150,000 GEO at life of mine cash costs of approximately $352 per GEO and all-in sustaining cash costs of approximately $525 per GEO which includes life of mine sustaining capital of $174 million of which $133 million is for underground development. The initial capital expenditure estimates for the project of $126 million would be spent beginning in 2015 and mostly in 2016. Detailed engineering has commenced to confirm assumptions and further refine capital costs to precision levels normally better than feasibility study levels. Although the total capital, once this process is completed, is not expected to exceed $150 million which assumes a contingency in excess of the feasibility study.

The feasibility study contemplates small open pits for the first three years followed by the development of underground areas. The Company is also evaluating optimizations and efficiencies that include scalability of the plant. The processing plant is to be built in two phases. The first phase to recover metal from a high grade gravity concentrate; and the second phase, after year three, will add floatation to increase recoveries. This plant will be sized to allow retreatment of tailings accumulated during phase one. Extensive metallurgical testing indicates that once this plant is completed the recoveries are expected to rise to 95% gold and 93%. Development of the underground areas and second phase plant capital will be fully funded through cash flow.

Power for the processing plant and mines would be generated on site with diesel generators producing a total of 7.2 megawatts ("MW") at an average cost of $0.36 per MW.

The project is expected to generate significant returns, create robust value and positively contribute to cash flow per share. This operation aligns with the Company's focus to balance production of growth and capital spending to maximize value creation.

Suyai (Chubut province)
Suyai is a high-grade gold and silver deposit located in the Chubut province. An application for the environmental impact study ("EIS") is underway for exploration and development work which will be followed by permitting for an operational EIS within the current mining and environmental laws of the Chubut Province.

The plan being evaluated is a small scale underground operation with off-site processing or direct sale of a precious metal concentrate. The parameters of the current plan include an initial capital investment of approximately $220 million, initial throughput rate of 1,150 tonnes per day with the ability to expand over time and expected annual production of approximately 150,000 GEO at costs consistent with the Company's current all-in sustaining cash cost structure.

Exploration at Cerro Moro and Gualcamayo
At Cerro Moro, surface exploration consisting of detailed mapping and sampling of prospective targets in the Escondida and La Negra blocks were the focus of the exploration program during the first quarter of 2014. Mapping and sampling from the decline ramp and cross cuts of the Escondida fault and associated veins, breccia, and stockwork systems, is underway. Sampling of the Escondida veins and structures is expected to confirm values in the mineral resource and mineral reserve models. To date, veins and structures exposed in the decline are located as modeled from the surface drilling.

At Gualcamayo, the 2014 exploration program at Gualcamayo will focus on expanding the Rodado southwest mineral orebody and testing new target areas for near surface oxide potential. A drill program has been planned to collect core samples of the sulfide zones that can be properly preserved for metallurgical work and used for the sulfide feasibility study of the deep sulfide mineral deposits. During the first quarter, 4,626 metres were completed in 11 drill holes at Gualcamayo with 945 metres completed in 2 holes that correspond to the metallurgical test program mentioned above.

 

San José Q1 2014 Production Results

 
 

Canadian company McEwen Mining Inc. announced production results of San José Mine (Santa Cruz province) for Q1 2014.

McEwen Mining's attributable production (49%) from the San José mine during Q1 2014 was 22,781 gold eq. oz (10,767 gold oz and 720,830 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).

San José Mine Operating Results

sanjose

 

 

 

NGEx drilling results at Filo del Sol and Josemaría Projects

 
 

On April 30 NGEx Resources Inc. announced results from the final nine holes drilled during the 2014 drill program at the Filo del Sol copper-gold-silver project located in San Juan Province. The drill holes announced include infill holes which confirm the continuity of high-grade copper and silver mineralization and one step-out hole which extends the zone 300 metres to the north. Highlights include:

•VRC71 which intersected 20 metres (from 360m) of 1.07% copper and 0.63 g/t gold, extending the high grade manto zone approximately 300 metres to the north of previous drilling (VRC28). This hole appears to have stopped above the silver zone;
•VRC74 which intersected 44 metres (from 162m) of 0.80% copper and 1.09 g/t gold just above an 18 metre interval (from 236m) of 236.6 g/t silver. There are no holes drilled to the east of this hole;
•VRC76 which intersected 14 metres (from 104m) of 1.29% copper and 2.41 g/t gold;
•VRC79 which intersected 6 metres (from 146m) of 4.16 g/t gold above an 8 metre interval (from 206m) of 394.8 g/t silver;
•FSDH13 which was unfortunately lost in strong mineralization at the bottom of a 26.3 metre interval (from 204m) of 3.87% copper, including the upper 10 metres which returned 7.59% copper;
•Most drill holes terminated in porphyry mineralization as the primary goal of this program was to define the shallower, high-grade manto zone.

The nine holes released here span a north-south distance of 880 metres, with VRC75 at the southern edge of the drill pattern and VRC71 at the north. Drill hole collar locations are shown on the plan map which accompanies this news release.

Previously (April 10) NGEx Resources Inc. announced results from ten holes drilled during the 2014 drill program. The drill holes announced that day continue to extend the high-grade manto zone and expand the broader zone of disseminated copper, gold and silver mineralization.

Highlights included:

•VRC63 which intersected 12 metres of 663 g/t silver (from 262m), extending the high grade manto zone approximately 145 metres to the northeast of previous drilling (VRC38);
•VRC66 which intersected the high grade manto zone with 16 metres of 222 g/t silver (from 358m), extending the zone by 290 metres to the northwest of previous drilling (FSDH02). This hole also intersected 20 metres of 2.11% copper (from 238m) in the supergene enrichment blanket;
•VRC69 which intersected 20 metres of 2.44% copper (from 92m) in the supergene blanket;
•VRC70 which intersected 22 metres of 5.80% copper (from 146m) in the supergene blanket plus a 6 metre interval of 12.41 g/t gold (from 120m);
•VRC72 which intersected the high-grade manto zone with 12 metres of 907 g/t silver (from 176m), extending the zone 140 metres to the east of previous drilling (VRC34);
•All drill holes terminated in porphyry mineralization.

The ten holes released here span a north-south distance of 2,000 metres, with VRC65 at the southern edge of the drill pattern and VRC78 at the north. Drill hole collar locations are shown on the plan map which accompanies this news release.

A total of 8,208 metres of reverse circulation (RC) drilling was completed in 24 holes between December 10th, 2013 and March 5th, 2014The drill program was designed to collect sufficient data to allow for the planned completion of an initial mineral resource estimate for Filo del Sol later this year. With this drill results the Company plans to start work on an initial resource which is expected to be complete in the fourth quarter of 2014.

Filo del Sol is a high sulphidation epithermal copper-gold-silver system that overlies a porphyry copper-gold system. Overlapping mineralizing events combined with weathering effects, including supergene enrichment, have created several different styles of mineralization at Filo, including copper-gold porphyry, structurally-controlled gold, manto-style high-grade silver (+/- copper) and high-grade supergene copper enrichment.

The focus of this season's drill program was to expand and infill both the copper-gold porphyry mineralization and the high-grade manto zone which occurs as a sub-horizontal sheet of variable thickness within the volcanic rocks which overlie the porphyry system. The Filo del Sol mineralization remains open in all directions.

Final Josemaria Drill Results
NGEx Resources Inc. reported final drilling results from the 2013/2014 program at the Josemaría copper-gold porphyry project located in San Juan Province. A total of 7,302 metres in 14 holes, including two geotechnical holes, was completed during the field season and drilling is now finished.

The focus of this season's drill program was to define the high-grade supergene zone at the north end of the deposit and test for possible extensions of this zone to the northwest of previous drilling. Several larger step-out holes were also completed in order to test a broad area of leached cap extending to the north and northwest of the main deposit area.

All of the holes reported here were designed to test for extensions of the Josemaria deposit to the west and northwest of the current resource.

Drill hole JMDH84 was an extension of previously announced hole JMDH10, which was drilled in 2009 and stopped at 308.2 metres, within the mineralized zone. JMDH84 extended the mineralization to a depth of 600.2 metres and ended in mineralization (0.16 g/t Au and 0.373% Cu). This hole intersected the Inferred resource block from 390 metres to the end.

Drill hole JMDH86 was drilled 300 metres to the north of the main deposit in order to test for the extension of the supergene mineralization beneath the leached cap in this area. No significant mineralization was encountered.
Drill hole JMDH87 was collared 200 metres to the west of JMDH84 to test for the western extension of the mineralization intersected in that hole. It intersected a 182 metre section of 0.41% CuEq, including higher than usual silver grades. This intersection is outside of the current resource block.

Drill holes JMDH88 and JMDH89 were drilled to the west of the main deposit. JMDH88 is entirely outside of the resource block and JMDH89, located 330 metres to the south, is within the Indicated resource block to a depth of 460 metres, and within the Inferred resource block below.

Metallurgical test work and baseline environmental programs are ongoing and will continue during the coming months. The Company plans to incorporate the results of this year's drilling into an updated resource estimate and once the metallurgical test work is complete, to complete an updated Technical Report. Additionaly, NGEx expects to be in a position to complete an updated Technical Report during the fourth quarter of 2014.

At a 0.30% copper equivalent cutoff grade, Josemaria has a current Indicated Resource of 789 million tonnes at 0.35% copper and 0.24 g/t gold and an additional Inferred Resource of 315 million tonnes at 0.28% copper and 0.17 g/t gold.

 

Malbex Resources Inc. and Barrick Gold Corporation Enter into Earn-in Arrangements on the Del Carmen Project

 
 

Malbex Resources Inc. announced that it has entered into an agreement with Barrick Gold Corporation relating to Malbex's Del Carmen project in San Juan Province whereby Barrick will have the option to earn in to a 51%, and then a 75%, interest in the Del Carmen Project based on meeting certain expenditure requirements. In conjunction with the earn-in arrangements, Barrick has agreed to subscribe for an aggregate of 14,285,714 common shares of Malbex for an aggregate subscription price of C$1,000,000.

The closing of the Private Placement and the earn-in arrangements is conditional on, among other things, Malbex causing the exploration agreement covering the Del Carmen Project to be transferred to a newly-formed entity jointly-owned by wholly-owned subsidiaries of Barrick and Malbex, the extension of such exploration agreement, the delivery of required work and environmental permits for the Del Carmen Project and the approval of the TSX Venture Exchange. The transfer of the exploration agreement to the Joint Venture Company requires the prior approval of the Instituto Provincial de Exploraciones y Explotaciones Mineras ("IPEEM") of the San Juan Province. Formal application to transfer the exploration agreement is expected to be made to IPEEM shortly.

Shareholders' Agreement
The Joint Venture Company will initially be 95% owned by Malbex and 5% owned by Barrick. Pursuant to the shareholders' agreement to be entered into by the parties to govern the operation, management and control of the Joint Venture Company:

•Barrick will be the operator of the Del Carmen Project responsible for managing, directing and controlling operations at the project.
•Barrick will have the option to earn a 51% interest in the Joint Venture Company by incurring an aggregate of US$21 million in exploration expenditures on the Del Carmen Project on or prior to the fifth anniversary of the execution of the Shareholders' Agreement. The proceeds of the Private Placement will count towards these expenditures.
•In the two years following the First Earn-in Period, Barrick will have the option to further increase its ownership of the Joint Venture Company from 51% to 75% by incurring an aggregate of US$20 million in additional exploration expenditures on the Del Carmen Project.
•Following the expiry of the Second Earn-in Period, each of Malbex and Barrick will be required to fund its respective proportionate share of all expenditures relating to the Del Carmen Project. If a shareholder fails to advance their proportionate share of expenditures, the shareholdings of such shareholder will be diluted in accordance with the terms of the Shareholders' Agreement.
•If a shareholder's ownership stake in the Joint Venture Company falls below 10% at any time during the Proportionate Funding Period, such shareholder's shares will be converted into a 2% net smelter royalty on the Del Carmen Project.


 

Geochemical Sampling Program Completed at Meryllion's Cerro Amarillo Cu-Mo-Au Property

 
 

Meryllion Resources Corporation announced that its geochemical sampling program for the austral summer campaign of 2013-2014 has been completed at the Cerro Amarillo Cu-Mo-Au (copper-molybdenum-gold) property in west central Argentina. 

During the course of the field season, 1,372 samples were collected in support of the regional mapping and prospecting program. The sampling program was conducted over detailed grids and along crest and scree traverses in four high-priority prospect areas:

•Some 354 grab samples were initially collected in support of detailed mapping over the prospect areas of La Blanca, Vaca de Cobre, and Cerro Choro, as well as in reconnaissance mapping and general prospecting over the rest of the property. This work led to the identification of the La Blanca mineralized breccia zones and the mineralized porphyry system at Vaca de Cobre and Cerro Choro.
•Follow-up and detailed work comprising the collection of a further 1,018 samples was conducted over the prospect areas of La Blanca East (123 samples), Cajon Grande (444 samples), Cerro Choro (351 samples), and Vaca de Cobre (100 samples) in order to better define the distribution of mineralization identified from the mapping program.


 

Minsud Acquires From Troy Resources Argentina Ltd. Sucursal Two Claims Adjacent to Chita Property

 
 

Minsud Resources Corp. announces that it has acquired two mining claims from Troy Resources Argentina Ltd. Sucursal adjoining Minsud's 100% owned Chita mining concession (San Juan province) for total consideration of a 2% Net Smelter Return (NSR) royalty on future production revenue from the acquired claims. Minsud has the right to purchase one half or 1% of the NSR royalty by paying US$750,000 to Troy. The northern property is a mining claim granted to Troy covering 1,881 hectares and the southern property is a mining claim application pending approval covering 1,304 hectares.

Minsud's Chita Valley Project now comprises 17,400 hectares or 174 square kilometers of mineral concessions controlled by Minsud through various agreements.

 

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