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•• Monthly Mining Bulletin Nº31
November - 2014 - PANORAMA MINERO
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Mining in Argentina - What happened in October?

October was an important month for the local mining industry: Mendoza legislature opened a dialogue in order to discuss the Environmental Impact Studies of two important projects (Hierro Indio –with iron ore mineralization and operated by Hierro Indio S.A. – and Cerro Amarillo –with copper/gold/molybdenum mineralization and operated by Meryllion Resources) Although Law 7722 (the ones that prohibits the use of chemical in mining extraction), has not been suppressed, this is an important step in order to advance and develop Mendoza’s mineral wealth.
Also, Yamana Gold announced the creation of Catamarca District in order to develop the huge Agua Rica copper mine (close to Bajo la Alumbrera), and made important progress in two of the most promising gold projects in Argentina (Cerro Moro in Santa Cruz province, where a green light for construction could be announced before year end, and Suyai in Chubut province, a jurisdiction with anti-mining law)

Barrick Gold, the most important gold producer in terms of production, had a strong performance at its Veladero mine (San Juan province), and at Pascua-Lama signed a Memorandum Of Understanding with the local communities.

Cerro Negro (Goldcorp’s project in Santa Cruz province) is in its final steps to begin commercial production by year end; Coro signed a Definitive Agreement with a Russian Consortium, granted these companies a 70% interest in San Jorge copper project, the most advanced mining property in Mendoza province.

Yamana Gold: More gold production at Gualcamayo, creation of Catamarca District, advancement at Cerro Moro and Suyai
Yamana Gold announced its financial and operating results for the third quarter 2014.

Barrick Gold: Strong Third Quarter at Veladero – Pascua-Lama Update
Barrick Gold Corporation reported third quarter net earnings of $125 million ($0.11 per share).

MAS

Goldcorp: Cerro Negro in the path to begin commercial production by year-end
Goldcorp Inc. reported adjusted quarterly revenues of $1.1 billion, generating adjusted net earnings of $70 million, or $0.09 per share, compared to adjusted net earnings of $190 million, or $0.23 per share, in the third quarter of 2013.

MAS

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San Jose Mine - Q3 2014 Production Results
McEwen Mining Inc. announced production results as of Sept. 30, 2014. For the quarter, 30,642 gold eq. oz. and for the nine months, 93,987 gold eq. oz. were produced.

MAS

Coro Signs Definitive Agreement for San Jorge
Coro Mining Corp. signed a Definitive Agreement ("DA") with a group comprised of Aterra Investments Ltd. and Solway Industries Ltd. , (collectively, the "Group") for them to acquire an interest in the Company's San Jorge project, located in the province of Mendoza.

MAS

NGEx Acquires 100% Interest in Filo Del Sol
NGEx Resources Inc. entered into a definitive agreement to acquire the 40% interest in the Filo Del Sol project held by its partner Pan Pacific Copper Co., Ltd. for total cash consideration of US$7.0 million.

MAS

U3O8 Corp. Provides Corporate Update
U3O8 Corp. a Canadian-based company focused on exploration and development of uranium resources and associated commodities in South America, provided an update on the company in light of current market activities.

MAS

Rodinia Lithium Completes Shares for Debt Settlement
Rodinia Lithium Inc. has completed its share for debt settlement with Aberdeen International Inc. and has issued to Aberdeen 15,362,811 common shares of Rodinia at a deemed price of $0.065 per Common Share.

MAS

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Yamana Gold: More gold production at Gualcamayo, creation of Catamarca District, advancement at Cerro Moro and Suyai

 
 

Yamana Gold announced its financial and operating results for the third quarter 2014.

  • 18% increase in production from the second quarter for record quarterly production of 391,277 gold equivalent ounces ("GEO" - GEO assumes gold plus the gold equivalent of silver using a ratio of 50:1.);
  • All-in sustaining cash costs ("AISC" – All- in sustaining costs) of $807 per GEO, a 7% decrease from the second quarter; and AISC of $671 per GEO at key assets;
  • Adjusted loss of $12.5 million ($0.01 per share);
  • Net loss of $1,023.3 million ($1.17 per share);
  • Adjusted cash flows before changes in non-cash working capital of $196.0 million ($0.22 per share);
  • Cash flows after changes in non-cash working capital of $158.9 million ($0.18 per share).

 

Gualcamayo (San Juan Province)
During the third quarter of 2014, Gualcamayo produced 43,060 ounces of gold, exceeding 2013 third quarter production of 27,678 ounces by 56%. The new QDD Lower West ("QDDLW") underground mine, contributed approximately 30% of the ore during the quarter. Higher production, compared to third quarter of 2013, also resulted from a 66% increase in gold feed grade and an 11% increase in ore processed. Relative to the second quarter of 2014, normal sequencing in the mine plan for the open pit called for mining from lower grade areas as mining expands to new sectors of Phase III.

Gold recovery for the third quarter was lower than that of the comparable quarter of 2013 due to the metallurgy of the ore from Amelia Inés ("AIM") and QDDLW as it requires a longer leaching cycle than that of QDD Main, increasing the amount of ore on the heap leach pad. During the third quarter, efforts to reduce the leaching cycle and improve permeability have been made using lower stacking heights improving the recovery rate from the second quarter of 2014. Expansion of the Adsorption and Desorption plant increasing the volume of the treatment capacity to improve recoveries is also underway. Gualcamayo is positioned to meet or exceed production expectations for 2014.

Cash costs were $867 per ounce in the third quarter compared to $919 per ounce in the third quarter of 2013 representing a decrease of 6%. The conveyor belt that transports the ore from QDDLW completed commissioning by September, favorably impacting the cost structure of the underground mine. As a result, mining costs per tonne from QDDLW were 40% lower in September compared to August. Conveying ore will favorably impact the cost structure of the ore from QDDLW on a go-forward basis. Additionally, an integrated plan for cash cost reduction is in place involving the reduction of infrastructure services in the open pit mine such as maintenance contracts, reduction of equipment rental at QDDLW and a general optimization of camp services including energy consumption. Plans to demobilize contractors and transition to owner-mining are underway and will be fully effective by the middle of the fourth quarter of 2014. To date, all the development metres planned for the current year have been completed and the Company is advancing on 2015 planned metres.

Gualcamayo produced 134,404 GEO for the first nine months of 2014, compared to 85,408 GEO in the same period of 2013 representing a 57% increase. Cash costs for the nine month period ended September 30, 2014 were $765 per gold ounce, compared to $750 per gold ounce in same period of 2013.

Preliminary results on the geotechnical and metallurgical studies continue to provide a better understanding of the options for processing the newly discovered mineral resource beneath the current QDD pit limits. The Company is working with third-party consultants in assessing the economic viability of the sulphide mineral resources. Results at Rodado Southwest continue to support the potential for a large scale, bulk tonnage underground operation with several drilling intersections exceeding 100 metres. The Company will provide an update on the potential mine and processing methods by the end of the year. A pre-feasibility study will commence in 2015.

Cerro Moro (Santa Cruz Province)
Cerro Moro is a very high-grade, low cost, gold and silver deposit located in the Santa Cruz province 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 late 2016 or early 2017. Ordering of long-lead items and civil works is planned for the first half of 2015 with most expenditures being incurred in the second half of the year.

The Company is evaluating optimizations and efficiencies that include scalability of the plant on the basis of greater economic returns. This would include the installation of a Merrill-Crowe circuit during initial construction that would increase upfront recovery rates resulting in higher production in the initial years. The Company anticipates a throughput rate of at minimum 800 tonnes per day and over 150,000 ounce per year, and is advancing detailed engineering to further increase throughput. Detailed engineering to confirm assumptions and further refine capital costs to precision levels normally better than feasibility study levels is ongoing.

The project is expected to generate significant returns, create robust value and positively contribute to cash flow per share. This project aligns with the Company's focus to balance production of growth and capital spending to maximize value creation. The Company still expects to announce a formal construction decision by the end of the year.

Agua Rica (Catamarca Province)
Agua Rica is a large-scale copper, gold, silver and molybdenum deposit located in the province of Catamarca. On October 6, 2014, the Company announced the signing of a Memorandum of Understanding ("MOU") with the provincial Government of Catamarca ("the Government"), represented by the provincial mining company Catamarca Minera y Energetica Sociedad del Estado ("CAMYEN"), relating to the creation of the Catamarca Mining District. This agreement sets the groundwork for the Company and the Government to work together to consolidate important mining projects and prospective properties in the province, currently consisting of the Agua Rica property and the Cerro Atajo prospect. The MOU also considers the future participation of mining companies like Yacimientos Mineros Agua de Dionisio ("YMAD"), as well as permitting and significant infrastructure support on the part of the Government. This agreement is one of the first of its kind in Argentina and is indicative of government support at the national level and, as importantly, in Catamarca for the development of Agua Rica and more generally for mining and mining investments in Catamarca.

The MOU outlines the mechanics by which an association will be formed to advance exploration at the Cerro Atajo prospect, which is considered a stepping stone for further advancement in the development of the Agua Rica project. Cerro Atajo is prospective for both high grade gold-copper-silver veins and large tonnage copper-gold porphyry mineralization. Cerro Atajo is centred on an intrusive complex within the same host rock as the nearby Alumbrera mine, 10 km to east of Alumbrera and 25 km west of Agua Rica, a region in which both the Company and the Government have interests.

The MOU forms the basis of a working relationship between the Government through CAMYEN, other mining companies like YMAD and the Company that is expected to result in a formal agreement by the end of the year to help advance the Cerro Atajo prospect and the Agua Rica project. The MOU also outlines a maximum ownership interest of up to 5% for CAMYEN of a combined entity, including the Agua Rica project and Cerro Atajo prospect, and some exploration and infrastructure spending during the three year life of the initial agreement. The MOU does not restrict the Company's ability to continue with Agua Rica, although it provides a framework of cooperation that would see Agua Rica advance to development more efficiently and on an expedited timeline. Presently, the Company is considering the development of Agua Rica in conjunction with other financial and mining industry participants.

 

Suyai (Chubut Province)
Suyai is a high-grade gold and silver deposit located in 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. The Company continues with community engagement to demonstrate the benefits of underground mining and offsite processing of ore.

 

Barrick Gold: Strong Third Quarter at Veladero – Pascua-Lama Update

 
 

Barrick Gold Corporation reported third quarter net earnings of $125 million ($0.11 per share). Adjusted net earnings were $222 million ($0.19 per share). Operating cash flow was $852 million. The company reported strong quarterly results with solid production and lower than expected costs which drove the second reduction to annual all-in sustaining cost guidance this year. Barrick produced 1,649 Moz of gold during the quarter, at US$834 (AISC per ounce); revised guidance for the whole year is 6,100-6,400 Moz of gold, at US$880-US$920 (AISC per ounce)

Veladero (San Juan province)
The Veladero mine produced 178 thousand ounces at AISC (All In Sustainable Costs) of $822 per ounce in the third quarter. Production benefited from higher grades on positive grade reconciliations. This trend is expected to continue into the fourth quarter. Production guidance in 2014 has been increased to 680-720 thousand ounces and AISC guidance has been reduced to $890-$920 per ounce.

Pascua-Lama Project (San Juan province & III Region of Chile)
The project is currently on care and maintenance. A decision to re-start development will depend on improved economics and more certainty regarding legal and permitting matters. Barrick is in the final stages of preliminary engineering for the permanent water management system and is discussing the permitting requirements necessary to obtain approval for construction with Chilean regulators. The company is making progress on establishing a constructive dialogue with a group of 15 Diaguita indigenous communities and associations in Chile's Huasco province through a Memorandum of Understanding (MoU). Under the MoU, Barrick is providing these groups with technical and environmental information on Pascua-Lama along with financial resources and materials to facilitate their analysis of the information.

Barrick continues to explore opportunities to improve the project's risk-adjusted returns, including engineering optimization, strategic partnerships or royalty and other income streaming agreements.

 

Goldcorp: Cerro Negro in the path to begin commercial production by year-end

 
 

Goldcorp Inc. reported adjusted quarterly revenues of $1.1 billion, generating adjusted net earnings of $70 million, or $0.09 per share, compared to adjusted net earnings of $190 million, or $0.23 per share, in the third quarter of 2013. Adjusted operating cash flow was $399 million, compared to adjusted operating cash flow of $375 million in the third quarter of 2013. Highlights include:

  • Gold sales of 641,400 ounces of gold production of 651,700 ounces.
  • Adjusted revenues of $1.1 billion.
  • All-in sustaining costs of $1,066 per ounce.
  • Adjusted net earnings of $70 million, or $0.09 per share.
  • Adjusted operating cash flow of $399 million.
  • Dividends paid of $122 million.
  • Ramp–up at Cerro Negro in Argentina and Éléonore in Quebec progressing on schedule.

"The continued ramp-up of new mines Cerro Negro and Éléonore, coupled with stable performance at our existing mines position us for a strong finish to 2014," said Chuck Jeannes, Goldcorp President and Chief Executive Officer.

Cerro Negro (Santa Cruz province) continued to ramp-up following first gold production on July 25, 2014, with commercial production expected in the fourth quarter of 2014. Gold and silver production for the quarter totaled 19,000 ounces and 233,700 ounces, respectively. Production mining continues at Eureka, while production mining at Mariana Central is expected to commence in the first quarter of 2015. Cerro Negro continues to operate on diesel power generation with permanent power from the national grid now expected by the end of the fourth quarter of 2014. The initial capital guidance range has been narrowed to between $1.65 and $1.70 billion.

 

San Jose Mine - Q3 2014 Production Results

 
 

McEwen Mining Inc. announced production results as of Sept. 30, 2014. For the quarter, 30,642 gold eq. oz. and for the nine months, 93,987 gold eq. oz. were produced.

Production guidance for the year remains unchanged at 135,000-140,000 gold eq. oz. Production is expected to increase in Q4, due to higher grades and processing capacity at El Gallo 1 (Mexico) and higher grades at San José (Argentina)

McEwen Mining has two sources of gold and silver production, the El Gallo 1 mine located in Sinaloa, Mexico and the San José mine located in Santa Cruz. The San José mine is 49% owned by McEwen Mining and 51% owned and operated by Hochschild Mining.

McEwen Mining's attributable production from the San Jose mine during Q3 2014 was 23,811 gold eq. oz. This is 3% higher than Q2 2014. Production in Q3 was in-line with the mine plan, but shows a decrease year-over-year due to exceptionally high gold and silver grades produced in Q3 2013. Production increased quarter-over-quarter due to slightly higher gold grades and recoveries. McEwen Mining's share of production from San José in 2014 is forecasted to be 97,500 gold eq. oz. with approximately 27,900 gold eq. being produced in Q4.

mb31

1. The Company calculates gold equivalent ounces at a Ag:Au ratio of 60:1

 

Coro Signs Definitive Agreement for San Jorge

 
 

Coro Mining Corp. signed a Definitive Agreement ("DA") with a group comprised of Aterra Investments Ltd. and Solway Industries Ltd. , (collectively, the "Group") for them to acquire an interest in the Company's San Jorge project, located in the province of Mendoza. The Group may acquire a 70% interest in the Project, with the provision for an early buy-out of Coro's interest subject to Coro's retention of a 2.5% Net Smelter Return ("NSR") on the production of all payable metals from the Project, except gold.

Alan Stephens, President and CEO of Coro commented, "We are pleased to have concluded this Definitive Agreement with our partners, Solway and Aterra, who have been operating Minera San Jorge and funding the Project since we signed a Heads of Agreement with them last December. We look forward to them successfully obtaining the outstanding environmental permissions for San Jorge and developing it, which would allow our shareholders to benefit, either through our 30% ownership interest or from the proceeds of a valuable NSR."

"We are pleased to continue our cooperation with Coro Mining Corp. on the San Jorge Project in Mendoza. I believe that Solway Investment Group's expertise in managing projects of this scale in developed agricultural regions, together with Coro's knowledge of the Project and Aterra's well-balanced investment strategy will produce a very successful outcome. Our objective is to create an up to date, modernized, ecologically safe and well-maintained business that will secure a high level of employment and significant tax return to the region", said Dan Bronstein, CEO of Solway Investment Group.

Principal Terms of the Definitive Agreement

The Group may acquire a 70% interest in the Project by; paying Coro US$200,000 (paid), US$33,000 on signing the DA, US$300,000 within 6 months from signing the DA, US$500,000 within 12 months from signing the DA, and US$500,000 within 24 months from signing the DA; funding all of the costs required to advance the Project to the Exercise Date, including an independent, bankable Definitive Feasibility Study, completed to NI43-101 standards ("the BFS"); keeping the Project and Minera San Jorge in good standing; and, prior to the Exercise Date, paying all of the advance royalty payments pursuant to the underlying San Jorge Purchase and Royalty Agreements between Coro and its subsidiaries, and Franco-Nevada Corporation and Franco-Nevada LRC Holdings Corp (together "Franco-Nevada"). The Group will be Operator for the duration of the Option Period.


 

NGEx Acquires 100% Interest in Filo Del Sol

 
 

NGEx Resources Inc. entered into a definitive agreement to acquire the 40% interest in the Filo Del Sol project held by its partner Pan Pacific Copper Co., Ltd. for total cash consideration of US$7.0 million. The consideration is payable in two installments: US$3.5 million payable immediately and US$3.5 million by the earlier of November 1, 2015 or upon completion of an administrative restructuring of certain exploration licenses. As a result, NGEx holds a 100% interest in the Filo Del Sol project.
NGEx is planning an exploration program on the Filo Del Sol project that is expected to include approximately 6,000 meters of reverse circulation drilling. This program is expected to commence in early 2015 and will focus on step out drilling designed to extend and further define the Filo Del Sol mineralization.

Wojtek Wodzicki, President and CEO stated "We are pleased to increase our interest in Filo Del Sol where we see excellent exploration potential. Today's agreement allows us to explore the earlier stage Filo Del Sol project, while focusing the work with our partner PPC on further developing the Los Helados project which is located closer to PPC's newly commissioned Caserones Mine. The ownership of the Los Helados project will remain the same with NGEx holding a 60% interest and PPC holding a 40% interest."

The Company's focus is on advancing its South American projects which include several large copper-gold systems including the Josemaria, Los Helados, and Filo Del Sol projects, located on a land package that the Company holds in Chile's Region III and adjacent San Juan Province, Argentina. Los Helados is part of a joint venture in which the Company holds 60% and Pan Pacific Copper Co., Ltd. holds 40%. Josemaria is part of a joint venture in which the Company holds 60% and Japan Oil, Gas, and Metals National Corporation (JOGMEC) owns 40%. In addition, as a result of the agreement announced in this news release, NGEx holds a 100% interest in Filo Del Sol amongst an extensive portfolio of other 100% owned early stage exploration projects located in Chile and Argentina.

 

 

U3O8 Corp. Provides Corporate Update

 
 

U3O8 Corp. a Canadian-based company focused on exploration and development of uranium resources and associated commodities in South America, provided an update on the company in light of current market activities. "The fundamentals of U3O8 Corp. and its projects remain solid," said Dr. Richard Spencer, U3O8 Corp's President and CEO. "We are currently being swept along in the market-driven sell-off in commodities and a broader liquidation affecting a number of exploration companies, which is further aggravated with end-of-year tax loss selling. Of further note, shares of uranium producers and juniors alike have traded down although uranium prices have risen over 25% since the summer. These market-related events highlight the disconnect between our share performance relative to the value that we are creating in our projects."

Highlights of U3O8 Corp's achievements to date:

  • Near-term production profile - the PEA recommends that Laguna Salada deposit advance to pre-feasibility to position it as one of the few projects that could be in production ahead of a sustained global uranium supply crunch forecast to start in 2019; and
  • Frac sand opportunity - a 39% stake in South American Silica Corp. ("SAS") offers exposure to the fast-growing frac sand market. A partnership with a local operator on SAS's first project in Argentina is currently installing a processing plant, at no cost to SAS, towards initial production in Q1 2015. SAS plans to advance two other frac sand targets to initial resource estimation with the aim of either moving these projects to potential production or joint venture with frac sand producers.

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Rodinia Lithium Completes Shares for Debt Settlement

 
 

Rodinia Lithium Inc. has completed its share for debt settlement with Aberdeen International Inc. and has issued to Aberdeen 15,362,811 common shares of Rodinia at a deemed price of $0.065 per Common Share. The share for debt settlement represents the full and final satisfaction of $998,582.72 owing to Aberdeen pursuant to a credit facility agreement entered into between the parties on February 22, 2013 and accordingly, the credit facility agreement has been terminated.

Prior to the completion of the shares for debt settlement, Aberdeen held 2,000,000 Common Shares. Upon completion of the debt settlement Aberdeen now holds in the aggregate 17,362,811 Common Shares, representing a 13% interest in the Company. The Common Shares remain subject to a statutory hold period of four months and one day which expires on February 2, 2015 and final approval of the TSX Venture Exchange.

Rodinia Lithium Inc. is a Canadian mineral exploration and development company with a primary focus on Lithium exploration and development in Argentina. The Company is also actively exploring the commercialization of a significant Potash co-product that is expected to be recoverable through the lithium harvesting process.

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