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•• Monthly Mining Bulletin Nº34
August - 2016 - PANORAMA MINERO
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Mining in Argentina – What happened in July

PANORAMA MINERO returns with its free monthly bulletin related to the mining industry in Argentina. This bulletin is sent to all decision makers at Embassies, Commercial Trades, governments, local and foreign mining companies and suppliers of good and services.

Please, feel free to ask anything you want. PANORAMA MINERO is your partner of choice.


Cerro Moro project: Yamana Gold will invest over US$220 million in 2017-18
Cerro Moro project, located in Santa Cruz province, is a high grade gold and silver deposit, currently in the development stage and with expected planned production in early 2018. At which time, Cerro Moro will begin having a positive impact on Yamana’s business.

Positive Results of Definitive Feasibility Study for Salar Del Rincon Lithium Project
Enirgi Group Corporation announced the positive results of its Definitive Feasibility Study for its planned 50,000 tonne per annum lithium carbonate processing plant at its Salar del Rincón development project located in the province of Salta, in northwest Argentina.

MAS

Tres Quebradas ("3Q") Project - Neo Lithium Discovers High Grade and Low Impurity Salar and Brine Reservoir Complex in Catamarca Province
Junior mining Neo Lithium Corp., announced the discovery of Tres Quebradas Lithium Project (the "3Q Project") a new and unique lithium salar and brine reservoir complex in Catamarca Province, named.

MAS

hunt

Lindero Gold Project: Fortuna Completes Acquisition of Goldrock Mines Corp.
Fortuna Silver Mines Inc. and Goldrock Mines Corp. reported that Fortuna has completed its previously announced acquisition of all of the issued and outstanding shares of Goldrock by way of plan of arrangement.

MAS

hunt

Blue Sky Uranium closes $1,900,000 Private Placement
Blue Sky Uranium Corp. announced the completion of the non-brokered private placement financing of 38,000,000 units for gross proceeds of $1,900,000 announced on June 1 2016 and June 3, 2016.

MAS

hunt

Golden Arrow Closes Private Placement
Golden Arrow Resources Corporation received regulatory approval from the TSX Venture Exchange for the Company's private placement of 9,020,000 units, announced on July 13, 2016 and July 14, 2016.

MAS

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Cerro Moro project: Yamana Gold will invest over US$220 million in 2017-18

 
 

Cerro Moro project, located in Santa Cruz province, is a high grade gold and silver deposit, currently in the development stage and with expected planned production in early 2018. At which time, Cerro Moro will begin having a positive impact on Yamana’s business.

Following the formal decision to proceed with the construction of Cerro Moro in 2015 and the updated project parameters with respect to timing and capital investment, the 2016 work program includes the ramp-up of site construction activities, the continuation of detailed engineering, as well as the advancement of underground mining in order to gain a better understanding of in-situ mining conditions. The Company is controlling planned expenditures, which for 2016 are expected to be approximately $53 million leaving $224 million in total for 2017 and 2018, with the majority of the spend predominantly in 2017, which continues to reflect the previously reported execution schedule. This approach allows for further exploration drilling in order to increase the size of the Cerro Moro mineral resources, in addition to improving the current mineral resource categorization. Yamana Gold believes that the Cerro Moro project also offers significant opportunities for the conversion of mineral resources into mineral reserves and for further discoveries on the property. This will serve to significantly improve the returns and value from this high grade project.

The Cerro Moro project contains a number of high grade epithermal gold and silver deposits, some of which will be mined via open pit and some via underground mining. The feasibility study is based on annual production in the first three years of approximately 150,000 ounces of gold and 7.2 million ounces of silver, with annual production averaging approximately 130,000 ounces of gold and 6.4 million ounces of silver over an initial 6 year mine life at a throughput of 1,000 tonnes per day. The concentrator will consist of a standard crushing, grinding and flotation circuit with a counter current decantation and a Merrill Crowe circuit included.

During the second quarter, the Company continued to show good progress on its development objectives. The Company has completed 325 metres of total planned underground development for 2016 of 617 metres, which positions the Company ahead of schedule providing additional time to develop the competency for underground mining in the local workforce. Ramp-up of site construction continues safely with bulk earthworks nearing completion and the concrete contractor having mobilized to site. Consistent with the base-line plan, detailed engineering progress is 73% complete and advancing to a target of 85% by the end of the year. This increases the comfort level on the construction process and details related to the plant eliminating ambiguities in construction schedule and potential delays. Procurement progress is also tracking well, upgrade of existing mine truck facility advanced, and phase 2 construction camp installation as well as tailings dam design were concluded.

 

Positive Results of Definitive Feasibility Study for Salar Del Rincon Lithium Project

 
 

Enirgi Group Corporation announced the positive results of its Definitive Feasibility Study for its planned 50,000 tonne per annum lithium carbonate processing plant at its Salar del Rincón development project located in the province of Salta, in northwest Argentina. Enirgi Group owns 100% of the Rincón Project through its wholly owned subsidiary ADY Resources Limited.

The Rincón Project's lithium carbonate processing plant is designed to produce battery grade lithium carbonate directly from raw, unconcentrated brine and will use Enirgi Group's proprietary lithium extraction technology, developed in-house by Enirgi Group's Innovation Division in cooperation with the Australian Nuclear Science and Technology Organisation (ANSTO).

Key DFS Findings

Mineral Reserve and Resource Estimates

 

Probable Reserves

1.2 million tonnes Lithium Carbonate Equivalent ("LCE")

 

Measured and Indicated Resources

3.5 million tonnes LCE

 

Inferred Resources

4.8 million tonnes LCE

 

Capital Expenditure

 

Initial net capital expenditure

US$720.1 million (including 8.62% contingency)

 

Project Economics

 

Ungeared After-tax 9% NPV

US$1.36 billion

 

Ungeared After-tax IRR

30.80%

 

Payback period               

4.13 years from start of commercial production

 

Mine Production

 

Life of Mine

24.5 years

 

Average annual production

50,000 tonnes LCE per annum

 

Total cash operating cost

$2,070 per tonne LCE for life of mine

 

DFS Highlights

  • Very large brine resource capable of supporting long project life with superior mining extraction and process recoveries when compared to industry averages;
  • Lowest quartile operating costs and potentially the lowest all-in production costs (excluding by-product credits);
  • High confidence in extending project life and/or increasing production rate further from conversion of Black Sand resource to reserve status and addition of large resource identified outside the halitic core;
  • Flexible product distribution/logistics strategy to export from Argentine and Chilean ports to meet future market demand; and
  • All environmental and construction permit approval processes on track to meet expanded 50,000 tonne per annum production ramp up schedule with all impacts mitigated.

Project Development/Investment Strategy

In conjunction with the DFS work, Enirgi Group's Innovation Division has focused on delivering its proprietary, game-changing lithium extraction technology, which is capable of producing battery grade lithium carbonate product by directly extracting lithium from raw, unconcentrated brine and processing it to the end product within 24 hours, at a low cost and with a lower environmental impact than standard processing technologies.

Enirgi Group has completed comprehensive exploration and metallurgical work and extensive technical, design, and engineering studies and the positive results of the DFS support the Company's significant investment to date and advancement of the Rincón Project.

The next milestone is to commence production at a demonstration plant level of lithium carbonate in-situ on the Salar del Rincón in the first quarter of 2017 to demonstrate the full lithium extraction process and technology. In parallel with the work to achieve this, Enirgi Group's Innovation Division will finalize the commercial plant design, commence detailed plant engineering, and complete engineering activities relating to gas supply and construction of a gas pipeline for the Rincón Project.

The current resource and reserve estimates underpin plans to maintain 50,000 tonnes LCE per annum for 24.5 years, however, Enirgi Group is confident in converting significant inferred resources that will provide the opportunity to expand production or extend the life of the operation.

Proprietary Lithium Extraction Process Development and Demonstration Plant - Highlights

  • Produces lithium carbonate directly from unconcentrated raw brine;
  • Radically reduces processing time; from brine to bag in less than 24 hours;
  • Eliminates reliance on capital intensive mega-evaporation pond infrastructure;
  • Reduces dependency on external reagents brought to site;
  • Low-impact extraction process radically reduces environmental footprint;
  • Reliably brings to the market significant volumes of low cost, predictable supply of high grade lithium;
  • Sets new industry benchmarks through superior extraction efficiencies;
  • Process is amenable to production of lithium hydroxide; and
  • Option to apply technology to other lithium-bearing brine resources.

 

Characteristics of the Salar del Rincón - Location and Infrastructure

The Salar del Rincón covers an area roughly 435 km2 with inner Salar area, termed the Halitic Zone, of approximately 232 km2. The halite crust area is essentially completely covered by ADY concessions and is the area used for the static resource estimation and remains the primary focus of brine evaluation on the Salar.

The Salar is situated in close proximity to key infrastructure, including existing natural gas pipeline, electricity, rail and road transport that is required to build and support a large, scalable lithium processing facility. Water can be sourced from tenements owned by Enirgi Group, which is sufficient to sustain long term processing rates.

Enirgi Group will construct a tie-in to the existing Gas Atacama pipeline connecting Chile and Argentina to supply power to support the Rincón Project (construction of the pipeline is included in the capital expenditure estimate).

 

Mining Method and Process Recovery

The proposed plant will have the capacity to produce 50,000 tonnes LCE per annum. To achieve this, brine containing approximately 350 to 500 milligrams per litre ("mg/L") lithium will be pumped from a series of wells in the Salar to the process plant, where impurities are removed and the lithium is refined and converted to a lithium carbonate.

The technology enables lithium extraction from raw unconcentrated brine and returns the spent brine with a very similar elemental composition with the exception of lithium. This removes the need for brine concentration which is usually made via a large area pond system reducing the mining area footprint and environmental impact relative to conventional technologies.

The chemical processes main reagent inputs are cost-effective natural gas and limestone with the carbonate requirement needed for the end product being manufactured from carbon dioxide flue gases from the power station reducing carbon emissions to the environment. There are no large amounts of solid waste generated from the plant as all impurities remain in the spent brine; this attribute solves many scalability and environmental problems usually encountered with material handling and storage of these wastes at the mine site.

Execution

  • Federal and Provincial permits associated with the operation of the on-site pilot plant for lithium carbonate production obtained.
  • Clear strategy and plan in place to carry out execution of the 50,000 tonne per annum Rincón Project.
  • Experienced team in place.
  • Strong global track record of successful project execution across Enirgi Group's assets and operations.
  • Project support from shareholders.
  • Strong local presence and positive relationships with Federal and National Government entities.

 

Tres Quebradas ("3Q") Project - Neo Lithium Discovers High Grade and Low Impurity Salar and Brine Reservoir Complex in Catamarca Province

 
 

Junior mining Neo Lithium Corp., announced the discovery of Tres Quebradas Lithium Project (the "3Q Project") a new and unique lithium salar and brine reservoir complex in Catamarca Province, named. Highlights include:

  • High grade and low impurities lithium discovery in the Lithium Triangle
  • Located in the largest lithium producing Province of Catamarca
  • Lithium Rich brines hosted in salars and reservoirs covering 160Km2, one of the largest of the Puna Plateau
  • 100% ownership of entire salar complex
  • Fully funded to Lithium Carbonate PEA Report

Located in Catamarca, the largest lithium producing province in Argentina, in the southern end of the "Lithium Triangle" of the Puna Plateau, the area is characterized by high altitude salt flats, some of which contain elevated lithium concentrations. The largest brine lithium mines and projects in the world are located in salars in the Lithium Triangle.

There are no communities or inhabitants in the area, and the 3Q Project is only 25 km from the border with Chile, where the Maricunga Salar is located. The Maricunga Salar is another high grade lithium brine project that is located over a highway 210 km away from the Chilean port of Caldera (Copiapo). That means that with potentially minimal infrastructure improvement, 3Q could be the closest Argentinean project to a Chilean port.

A total of 255 samples were collected for the 3Q project. These samples were collected from lakes, salars, boundary areas, rivers, and geothermal springs throughout the property from December 2015 to April 2016. The whole area registers anomalous lithium and potassium, but the northern portion of the salar and brine reservoir complex encompasses a high grade target that extends for approximately 14 km in length and 2.8 km in width along the 3Q brine reservoir and salar. Samples in the brine reservoir (28 in total) contained an average Lithium concentration of 895 mg/l and Potassium of 7,694 mg/L and samples in the salar (32 in total) contained an average Lithium concentration of 784 mg/l and Potassium of 6,796 mg/L (lithium concentrations in both zones range between 400 to 4,000 mg/L and Potassium concentrations between 5,100 to 18,000 mg/L). Preliminary brine sampling results indicate these values are comparable and in most cases higher than current producing mines or projects in construction.

The preliminary brine sampling results also indicate that the northern target of the 3Q brine reservoir and salar contains remarkably low impurities, which when compared to lithium brine projects around the world they are considered to be one of the lowest known amount of combined impurities in the industry. The average Magnesium/Lithium ratio is between 1.58 Mg/Li in the brine reservoir to 1.87 Mg/Li in the salar and the average Sulphate/Lithium ratio is between 0.46 SO4/Li in the salar to 0.67 SO4/Li in the brine reservoir. Sulfate and Magnesium are critical impurities in Lithium brine projects because they could increase operational costs significantly and many projects become uneconomic at high impurity levels.

Exploration Program

The Company will start an aggressive exploration program that will encompass upgrading the current road to an all-weather road, building a camp, a state of the art weather station, a pilot plant evaporation facility and an on-site laboratory. Geophysics will start in the third quarter and drilling will commence in the fourth quarter with the objective to generate a resource in the second quarter of 2017.

The Company has already initiated the processing studies out of a representative bulk brine sample at University of Antofagasta (Chile) and results are expected by the third quarter of 2016. These results are critical to demonstrate the ability of this low impurity brine to produce concentrated brine for export and for the design of evaporation ponds. These studies are the starting point for the design of a lithium carbonate facility.

The Company is very well capitalized with approximately $17.5 million cash position to see operations through to the Lithium Carbonate PEA report which is expected to be available in the first quarter of 2018.

 

 

Lindero Gold Project: Fortuna Completes Acquisition of Goldrock Mines Corp.

 
 

Fortuna Silver Mines Inc. and Goldrock Mines Corp. reported that Fortuna has completed its previously announced acquisition of all of the issued and outstanding shares of Goldrock by way of plan of arrangement. Goldrock is now a wholly-owned subsidiary of Fortuna.Pursuant to the Arrangement, Goldrock shareholders received 0.1331 of a common share of Fortuna for each Goldrock Share held. Additionally, outstanding warrants to purchase Goldrock Shares are now exercisable for Fortuna Shares based on the same exchange ratio.

The Arrangement was approved by the Supreme Court of British Columbia in its final order dated July 26, 2016. The Arrangement remains subject to final approval by the Toronto Stock Exchange, the New York Stock Exchange and the TSX Venture Exchange.

Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Its primary assets are the Caylloma silver mine in southern Peru and the San Jose silver-gold mine in Mexico. The company is selectively pursuing acquisition opportunities throughout the Americas and in select other areas.

The Lindero gold deposit is located in Salta province, northwestern Argentina. Goldrock has been granted permits by the Salta provincial government for the development of Lindero as an open pit, heap leach gold mine. In addition, Goldrock has received formal public declaration of support for the Lindero development by the provincial government, recognizing Lindero as the priority development project for Salta province.


 

Blue Sky Uranium closes $1,900,000 Private Placement

 
 

Blue Sky Uranium Corp. announced the completion of the non-brokered private placement financing of 38,000,000 units for gross proceeds of $1,900,000 announced on June 1 2016 and June 3, 2016.

Blue Sky is one of Argentina's best positioned uranium exploration companies with more than 5,000 km2 of tenements. The Company is a member of the Grosso Group, a resource management group with experience in South America since 1993.

The company engaged Mr. Guillermo Pensado as a Technical Consultant to the Company, and is proceeding with a new exploration campaign that seeks to advance and integrate several of Blue Sky's significant uranium discoveries identified in previous exploration programs.

Mr. Pensado's renewed approach will focus on the Anit, Ivana and Santa Barbara projects, which are located in the same geologic environment along a 120 kilometre corridor in the province of Rio Negro. The projects are known to host near-surface uranium mineralization and are open for expansion. The three projects are considered to be part of the same larger geologic system; therefore the new objective is to integrate the three projects into a combined exploration project, to delineate resources that could support a single combined low-cost surficial mining operation.

The US$500,000, six month work program has been developed as a first stage of the strategy, including:

  • Updating of the environmental permits to permit exploration work
  • Standardization of the geologic database for the projects
  • 25 kilometer IP Survey
  • Exploration pit sampling
  • Metallurgical scoping studies


 

 

Golden Arrow Closes Private Placement

 
 

Golden Arrow Resources Corporation received regulatory approval from the TSX Venture Exchange for the Company's private placement of 9,020,000 units, announced on July 13, 2016 and July 14, 2016.

The Company will issue 9,020,000 common shares of the Company at a price of CAD$0.75 per share for gross proceeds of CAD$6,765,000. Each unit consists of one common share of the Company at $0.75 per share and one-half share purchase warrant. Each whole warrant will entitle the holder thereof to purchase one additional share in the capital of the Company at a price of CAD$1.00 per share for 18 months from the date of issue.

Golden Arrow is a Vancouver-based explorer focused on identifying, acquiring and advancing precious and base metal projects in Argentina with the goal of achieving a world class discovery. The main focus is on advancing the flagship Chinchillas Silver Project located in Jujuy, Argentina. Golden Arrow is a member of Grosso Group, a management company specialized in resource exploration, and working in Argentina where it is highly regarded and trusted since 1993.


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