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•• Monthly Mining Bulletin Nº35
October - 2016 - PANORAMA MINERO
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Mining in Argentina – What happened in September

September was a very interesting month for the mining sector, particularly lithium. On the metalliferous side Austral Gold restarted production at Casposo mine; Yamana Gold continued the successful drilling campaign at Gualcamayo; Golden Arrow submitted the Environmental Report of the Chinchillas project to the mining authorities of Jujuy province; and the Lundin Group announced the update of the Constellation project (managed by NGEx Resources Inc.) and Filo del Sol (Filo Mining) Also, Veladero mine (Barrick Gold) suspended its operations after an environmental incident that caused no damage to employees and environment.

Austral Gold Announces Restart of Casposo Silver-Gold Mine Operations
Austral Gold Limited. announced that it is recommencing full operations at the Casposo gold-silver project following receipt of the results of an updated Mineral Resource and Mineral Reserve estimate for Casposo in San Juan province.

Yamana Gold - Gualcamayo Exploration Update
Yamana Gold Inc. provided an update of the exploration programs at its Gualcamayo Mine, located in San Juan Province.

MAS

Golden Arrow - Phase VI Drill Results Free Up Ground for Mine Development and Confirm Chinchillas South Mineralization
Golden Arrow Resources Corporation announced the results of assaying of the first twenty-four drill holes in the Phase VI drilling program at the Chinchillas Silver Project in Jujuy Province.

MAS

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NGEx Provides Corporate Update and Outlines Corporate Plans Post Filo Mining Spin Out
NGEx Resources Inc. provided a review of the Company's projects and an update on the Company's plans following the successful spin out and listing of Filo Mining.

MAS

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Filo Mining Launches With Initial Resource Base of 150 Million Ounces of Silver, 4 Million Ounces of Gold, and 3.3 Billion Pounds of Copper
Filo Mining Corporation provided an introduction to Filo Mining which was spun out from NGEx Resources in August and is now trading on the TSX-V and the NASDAQ First North exchanges under the symbol FIL. Filo Mining is the newest addition to the Lundin Group of Companies.

MAS

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Minsud - Closing of Above Market Non-Brokered Private Placement for Gross Proceeds of $1,519,200
Minsud Resources Corp. announced the closing of a non-brokered private placement offering of units in Minsud for gross proceeds of $1,519,200.

MAS

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Barrick Gold Corporation: Temporary Suspension of Operations at Veladero Mine – Reassumed normal Operations in early October
On September 15, Barrick Gold Corporation reported that the Government of San Juan province had announced a temporary suspension of operations at the Veladero mine pending further inspections of the mine's heap leach area.

MAS

Lithium Sector

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Neo Lithium Expands its 3Q Project Mineral Property and Signs Construction and Service Contracts
Neo Lithium Corp., has expanded its 3Q mineral property from approximately 30,000 ha to 35,000 ha. This new property extends the mineral property portfolio to the border with Chile and hosts sources of lithium rich hot springs that feed the project, identified in the previous field season.

MAS

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Millennial Lithium Purchased PastosGrandes Lithium Project and Closed Concurrent Financing for Proceeds of $4,875,000
Millennial Lithium Corp. closed its acquisition of the PastosGrandes Lithium Project and has also closed its concurrent private placement financing. The acquisition constituted a Fundamental Acquisition under the policies of the Exchange and was first announced in a news release on July 19, 2016.

MAS

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Millennial Lithium Options Cauchari East Lithium Project
Millennial Lithium Corp. entered into an option agreement to acquire 100% of the Cauchari East Lithium Project in Jujuy Province.

MAS

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Ultra Lithium - LOI to Acquire Lithium Salar Project - Announces $300,000 Private Placement
Ultra Lithium Inc. signed a binding Letter of Intent to acquire an 80% interest in a lithium salar property located in Puna Plateau north western Argentina from JinshanMinera Argentina S.A.("JMA").

MAS

 

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Austral Gold Announces Restart of Casposo Silver-Gold Mine Operations

 
 

Austral Gold Limited. announced that it is recommencing full operations at the Casposo gold-silver project following receipt of the results of an updated Mineral Resource and Mineral Reserve estimate for Casposo in San Juan province. The estimates were reviewed by independent consultants Roscoe Postle Associates, and are summarized in a National Instrument 43-101 ("NI 43-101") and JORC 2012 compliant Technical Report. The Technical Report confirms that the optimization of the plant and move to small scale mining will support a robust and economically viable underground gold and silver mine. All dollar amounts are quoted in U.S. dollars ("$").Life of Mine Plan Highlights:

  • Changes in underground mining methods are expected to reduce dilution;
  • Optimization of processing plant is expected to improve efficiency of the plant;
  • Mine life: 4 years;
  • Pre-Tax NPV (5%) of $53 million and After-tax NPV(5%) of $37 million;
  • Proven and Probable Mineral Reserves as of June 30, 2016, totaling 972,000 tonnes at 2.53 g/t gold and 231 g/t silver, containing approximately 79,000 ounces of gold and 7.2 million ounces of silver;
  • Measured and Indicated Mineral Resources as of June 30, 2016, inclusive of Mineral Reserves, totaling 1.4 million tonnes at 3.0 g/t gold and 238 g/t silver, containing approximately 136,500 ounces gold and 10.8 million ounces silver;
  • Average production of 800 tonnes per day (tpd) from underground (300,000 tonnes per year)
  • All-In Sustaining Cost (AISC) of $1,038 per oz. gold equivalent.
  • Metallurgical recovery based on operating data averaging 91% for gold, 83% for silver;
  • Average annual gold production of 21,000 ounces of gold and 1.7 million ounces of silver per year;
  • Life of Mine (LOM) capital totals $41.7 million, including reclamation and closure costs.
  • Proposed operations to be funded from Austral's existing and other internal cash resources

Austral Gold Chief Executive Officer, Stabro Kasaneva, remarked that, "The Life of Mine Plan provides a very solid basis for advancing to commissioning the full operation. The Plan supports the viability of moving to small scale underground mining methods and optimization of the process plant. The positive results put us in a position to re-commence full operations. We look forward to continuing the operation of Casposo and working with the community to the benefit of all stakeholders."

"The results present an exciting opportunity for the Company and its shareholders, and it is a very significant moment for the company, representing our first operation in Argentina," remarked Austral Gold Chairman, Eduardo Elsztain. "The results confirm our expectations for Casposo, validating the original commitment of the Board of Directors, management, our investors and Argentina's stakeholders to push forward with recommissioning the operation and growing our precious metal production in Argentina and Chile."

 

 

Yamana Gold - Gualcamayo Exploration Update

 
 

Yamana Gold Inc. provided an update of the exploration programs at its Gualcamayo Mine, located in San Juan Province. The initial 2016 exploration budget of US$4 million was earmarked primarily for Mineral Resource infill drilling within the QDD Main pit and the underground mine areas, infill and limited deep drilling of the Las Vacas mineral body.

At Gualcamayo, exploration drilling that commenced in late 2015 to discover and develop new oxide ounces amenable to current heap leach processing technology continued into early 2016. The program focused on near mine targets and included the collection of 10 metre channel samples for geochemical analysis. Very positive results were returned from two areas immediately adjacent to the current open pit. The Cerro Condor target is located along the eastern rim of the QDD Main pit wall and was defined by channel sample results including 60 metres of 2.57 g/t gold and 10 metres of 9.19 g/t gold. The Potenciales target, located along the western flank of the pit wall was defined by numerous channel sample results, including 10 metres of 10.5 g/t gold and 10 metres of 13.28 g/t gold. Given these impressive surface results, a $3.5 million budget increase was approved in the first quarter for drill testing. Results of these drill programs have been very positive and further drilling is planned for 2016 to expand these new discoveries.

Both of these new discoveries are significant in that they may define new oxide mineral resources and allow for pit wall lay backs to exploit more of the QDD Profundo resources. An updated Mineral Resource and Mineral Reserve from the new discoveries and QDD Profundo will be completed in the first quarter of 2017. While the Deep Carbonates project represents a large ore body, the Company is not currently allocating exploration funds to the deposit as the focus is on evaluating mining method and metallurgy.

Stepping 2 kilometres to the northwest of the QDD Main pit, the exploration team conducted follow up infill drilling of the Las Vacas target during the first half of the year yielding positive results such as 10 metres of 2.01 g/t gold in hole 16LVR-052 and 38 metres of 0.86 g/t gold in hole 16LVR-053. The initial results of this program indicate that portions of this near surface oxide deposit will be amenable to the current leaching and gold extraction circuit.

To support long term discovery and growth at Gualcamayo, the exploration team has developed and prioritized over 29 areas to explore based on proximity to the mine, favorable geology, geochemistry, geophysics and remote sensing characteristics, size potential and accessibility. Exploration of five highest priority targets is underway and with support from the mine and regional exploration staff.

 

Golden Arrow - Phase VI Drill Results Free Up Ground for Mine Development and Confirm Chinchillas South Mineralization

 
 

Golden Arrow Resources Corporation announced the results of assaying of the first twenty-four drill holes in the Phase VI drilling program at the Chinchillas Silver Project in Jujuy Province.

The drilling program is part of the Chinchillas Project pre-development activities, funded by Silver Standard, which are being undertaken to evaluate the feasibility of creating a combined mining business with Silver Standard's Pirquitas mine, as announced October 1st, 2015.

The objective of the drill program is exploration for resource potential as well as condemnation of certain areas for future mine infrastructure. Drill targets included the Chinchillas South area where seven previous drill holes had returned significant zinc and silver intervals up to 1.5 kilometres away from the main Chinchillas deposit.

"Phase VI drilling has confirmed that the area planned for surface infrastructure is devoid of significant near-surface mineralization. However the area is underlain by narrow high grade structures found over a 440 metre by 120 metre area that are similar in style to those found at Pirquitas. This mineralization, along with Breccia Dome target to the north provides future resource potential," commented Brian McEwen, Golden Arrow's VP Exploration and Development.

Selected highlights from these drill holes include:

  • 159 g/t silver and 1.3% lead over 6 metres in CGA-301RC
  • 23 g/t silver and 0.6 % Pb and 1.0 % Zn over 104 metres in CGA-308, including365 g/t silver and 16.7 % Pb and 13.2 % Zn over 0.5 metres
  • 110 g/t silver, 2.3% lead and 2.1% zinc over 7 metres, and376 g/t silver, 7.5 % Pb and 3.2 % Zn over 2 metres
  • 255 g/t silver and 0.5 % Zn over 2 metres in CGA-320

The drilling of Phase VI holes is now complete, with a total of 7,188 metres over 34 holes including seven short reverse circulation holes and one hole redrilled for a water well.

Additionally, Golden Arrow Resources announced that the Environmental Report for exploitation at the Chinchillas project has been submitted to the mining authority in the Province of Jujuy.

This report initiates formal permitting for mine development and is part of the Chinchillas Project pre-development activities funded by Silver Standard (as per the proposed combined mining business with Silver Standard's Pirquitas mine announced October 1st, 2015).

The detailed Environmental Report (“ER”) is the main focus of permitting for mining projects in the province of Jujuy. The report includes a description of the expected environmental impacts of the proposed mining operation, a management plan for those impacts and a plan of action on environmental contingencies. The ER is submitted for review by Jujuy's Provincial Environmental Management Unit, or UGAMP. The UGAMP is a multi-stakeholder group chaired by a technical appointee from the Mining Department who review and discuss the ER, and recommend approval or rejection to the provincial mining authorities. Approval by UGAMP provides the needed social license to obtain an exploitation permit.

 

 

NGEx Provides Corporate Update and Outlines Corporate Plans Post Filo Mining Spin Out

 
 

NGEx Resources Inc. provided a review of the Company's projects and an update on the Company's plans following the successful spin out and listing of Filo Mining.

The Company's initial focus will be on advancing its 60% owned Project Constellation which includes its Los Helados and Josemaria Deposits located in Region III, Chile and adjacent San Juan Province, Argentina. Project Constellation is one of the largest, undeveloped copper-gold projects in South America.

An Integrated Preliminary Economic Assessment, which evaluated the combined development of the Los Helados and Josemaria Deposits, was completed in January, 2016. The combined project is called Project Constellation. Project Constellation highlights include:

Robust economics at long term metals prices of $3.00 for copper and $1275 for gold:

  • an after tax NPV of US$ 2.6 billion,
  • an IRR of 16.6%, and
  • a payback period of 3.6 years
  • forecast lowest quartile C-1 costs per pound of copper net of by-products;

A large scale project that over a 48 year life would produce a projected average of:

  • 150,000 tonnes of copper per year
  • 180,000 ounces of gold per year
  • 1,180,000 ounces of silver per year
  • Life of mine production totals 7.1 million tonnes of copper (15.7 billion lbs), 8.5 million ounces of gold, and 55.6 million ounces of silver. Although primarily a copper project - Project Constellation represents one of the largest undeveloped gold resources in South America
  • Opportunities to expand production or increase mine life by optimizing the integrated mine plan to bring in significant resources that remain outside the current Integrated PEA production plan; (only 37% of the total Josemaría mineral resource is included in the Integrated PEA mine plan);
  • Excellent metallurgy yielding a clean, 29% copper concentrate, with high precious metals content; Clean concentrates are expected to command a premium price as many of the world's largest copper mines transition to producing concentrate with high levels of impurities such as arsenic which many smelters cannot accept due to increasingly stringent environmental regulations. This trend is expected to intensify in the coming years increasing the value of Project Constellation concentrates.
  • High-potential exploration targets within a few kilometers of the existing deposits and the proposed plant site.

Project Opportunities and Corporate Plan

The Project Constellation Integrated PEA represents an important milestone in an ongoing process of value creation but it is by no means an end point. The Company continues to think creatively, and to evaluate alternative development scenarios, and to assess opportunities to further enhance the value of its projects. Ideas for further study include:

  • Evaluation of the potential for a lower initial capex, scaled development of Josemaria. Josemaria has a zone of near surface, higher grade mineralization that, according to the Integrated PEA, could produce an average of 345,000 ounces of gold, 185,000 tonnes of copper, and 1.3 million ounces of silver in the first five years. This material allows Project Constellation to pay back its capital in 3.6 years and funds the development of Los Helados. The company plans an internal scoping study that would focus on the potential of this material to enable a lower initial capex, scaled development of Josemaria.
  • Recovery of gold from the oxide cap at Josemaría, which contains approximately 450,000 ounces of gold. This material was considered as waste in the Integrated PEA mine plan, however, the limited leach test work completed to date showed good gold recoveries and further test work is planned to evaluate whether it could contribute to project economics.
  • Further evaluation of opportunities to improve project economics by realizing potential synergies with nearby deposits. Innovative development concepts such as Teck-Goldcorp's Nueva Union Project open up the potential for sharing infrastructure on a regional scale by connecting deposits via long distance conveyor systems.
  • Further fieldwork on the proposed water source for the project and initiation of the acquisition of water rights in Argentina.

 


 

Filo Mining Launches With Initial Resource Base of 150 Million Ounces of Silver, 4 Million Ounces of Gold, and 3.3 Billion Pounds of Copper

 
 

Filo Mining Corporation provided an introduction to Filo Mining which was spun out from NGEx Resources in August and is now trading on the TSX-V and the NASDAQ First North exchanges under the symbol FIL. Filo Mining is the newest addition to the Lundin Group of Companies.

Filo Mining's flagship project is its 100% controlled Filo del Sol Project located on the border between San Juan Province and Region III, Chile. Filo del Sol is located between the prolific Maricunga and El Indio Gold Belts, two major mineralized trends that contain such deposits as Caspiche, La Coipa, Veladero, El Indio, and Pascua Lama. The region is mining-friendly and hosts a number of large scale mining operations. The project area is covered under the Mining Integration and Complementation Treaty between Chile and Argentina which provides the framework for the development of cross border mining projects.

The Filo del Sol deposit occurs within a 6 km by 3 km alteration zone which is one of the largest undeveloped mineralized systems in the Andes. With less than 20% of the project area explored to date, Filo del Sol has so far delivered an Inferred Resource estimated to contain:

  • 150 million ounces of silver
  • 4 million ounces of gold
  • 3.3 billion pounds of copper

Within a total of 381 million tonnes at a grade of 0.39% copper, 0.33 g/t gold and 12.2 g/t silver (0.69% copper equivalent).

Discreet zones of much higher-grade copper, gold and silver mineralization occur within this overall resource, providing the opportunity to study a wide range of possible mining scenarios. The upper 150 to 200 metres of the resource is oxidized, and initial metallurgical test results indicate excellent recoveries of copper and gold using leach processing.

Several high-quality exploration targets defined by geology, soil and rock geochemistry, and geophysics remain to be tested and the potential to increase the size of this resource and discover new deposits within the extensive alteration zone remain excellent.

The immediate focus at the Filo del Sol project will be directed towards evaluating the potential to develop the project as a low cost, heap leach operation. A preliminary leach metallurgical program was completed earlier this year on samples of oxidized material with results expected shortly. Heap leaching is a widely used processing method for recovering metals from oxidized mineralization and typically involves lower capital and operating costs than the flotation process that is used for sulfide material.


 

 

Minsud - Closing of Above Market Non-Brokered Private Placement for Gross Proceeds of $1,519,200

 
 

Minsud Resources Corp. announced the closing of a non-brokered private placement offering of units in Minsud for gross proceeds of $1,519,200. In connection with the closing of the Private Placement, which was initially announced on August 9, 2016, Minsud issued 15,192,000 Units at a price of $0.10 per Unit with each Unit comprising of one common share in the capital of the Company and one common share purchase warrant. Each Warrant is exercisable into one Share at $0.15 until September 2, 2018.

The net proceeds will be used to continue exploring the copper-moly-silver-gold deposit at the Company's Chita Project (San Juan province) including 1,700 meters DDH drilling and metallurgical tests, payments relating to option agreements and financing of mining rights acquisitions, as well as working capital and corporate overhead requirements.


 

Barrick Gold Corporation: Temporary Suspension of Operations at Veladero Mine – Reassumed normal Operations in early October

 
 

On September 15, Barrick Gold Corporation reported that the Government of San Juan province had announced a temporary suspension of operations at the Veladero mine pending further inspections of the mine's heap leach area. The company worked with provincial authorities to confirm the integrity and safety of the heap leach facility as quickly as possible, beginning that day.

On September 8, 2016 a pipe carrying process solution in the heap leach area was damaged when it was struck by a large block of ice that had rolled down the heap leach valley slope. A small quantity of solution left the leach pad as a result. No solution from this damaged pipe reached any water diversion channels or watercourses and the impacted area in the leach valley was remediated. The incident did not pose any threat to the health of employees, communities or the environment.

Environmental monitoring of surface and sub-surface water had been intensified and no anomalies had been detected.

On October 4, Barrick announced the resumption of normal operations at the Veladero mine following approval from San Juan provincial authorities.


 

 

Neo Lithium Expands its 3Q Project Mineral Property and Signs Construction and Service Contracts

 
 

Neo Lithium Corp., has expanded its 3Q mineral property from approximately 30,000 ha to 35,000 ha. This new property extends the mineral property portfolio to the border with Chile and hosts sources of lithium rich hot springs that feed the project, identified in the previous field season.

After receiving the environmental permit from the environment and mining authorities of the Province of Catamarca, the Company has awarded contracts for road construction, camp construction, pilot pond construction, geophysics and drilling.

A 60 km road upgrade has already started for all weather transport from paved highway #60 to the project. The 40 person camp has already been pre-built off-site and will be transported to site in the next 30 days. Along with the camp, a weather station and a full scale laboratory to analyze lithium, potassium, calcium, magnesium, sulfates, chlorine and boron will be installed on site. All the equipment is already operational and the lab has also been pre-built off-site. Alex Stewart Laboratories, a certified lab based in Mendoza, will set up the lab protocols to comply with international standards.

The exploration team including geologists, engineers, logistics, safety experts and supporting staff have already been hired and the crew is ready to be mobilize.

"With the addition of this new project area that hosts lithium rich hot springs plus our multifaceted mobilization efforts, our team is rapidly hitting milestones at the project level" stated Waldo Perez, Chief Executive Officer.


 

Millennial Lithium Purchased PastosGrandes Lithium Project and Closed Concurrent Financing for Proceeds of $4,875,000

 
 

Millennial Lithium Corp. closed its acquisition of the PastosGrandes Lithium Project and has also closed its concurrent private placement financing. The acquisition constituted a Fundamental Acquisition under the policies of the Exchange and was first announced in a news release on July 19, 2016.

The Project is strategically located within the Argentine portion of the "Lithium Triangle", which is host to some of the world's largest lithium resources. The Project is approximately 1,200 hectares in size and ideally situated in the center of the PastosGrandesSalar in Salta province. The region exhibits significant lithium and potassium brines and historically the Project has been tested by surface geochemical sampling, Magnetolluric (MT) surveying, CSAMT, vertical electrical sounding (VES) geophysical surveying and by 4 pumping wells testing and measuring brine flows in aquifers with significant lithium and potassium assays. Millennial is planning to continue with exploration and development of the Project and expects to report on such exploration plans in the coming weeks.

 

 

Millennial Lithium Options Cauchari East Lithium Project

 
 

Millennial Lithium Corp. entered into an option agreement to acquire 100% of the Cauchari East Lithium Project in Jujuy Province.

Cauchari East covers an area of 2,990 hectares on the eastern side of the Cauchari-Olaroz Salar, adjacent to Orocobre's producing Salar de Olaroz and Lithium Americas Corp.'s advanced stage Cauchari-Olaroz. The property displays geological characteristics common with the deeper, buried salar-type mineralization that has been proven for both of those projects. Gravity and magneto-telluric (MT) survey profiles to the south of the property reported in the Orocobre Technical Report, and VES survey results to the north of the property as reported by Lithium Americas both indicate that the brine-hosting aquifers extend beneath the Cauchari East Project.

Since 2009, considerable work has been completed in the Cauchari Salar by Orocobre and Lithium Americas, much of which is detailed in environmental reports and NI43-101 technical reports on the salar. In additional to the geophysics surveys, the reports disclose significant geochemical data confirming that brine resources with high lithium concentrations extend to the eastern boundaries of the basin, in the direction of the Cauchari East Project. Lithium enrichment in this area of the Cauchari basin appears to be related to the deep structure that hosts the Cerro Negro volcano and which bounds the Cauchari East property along its western limit.

Millennial plans to apply its rapid development strategy to the Cauchari East property. Pending government and communities approvals, the Company will rapidly advance through geophysics to drilling in order to make a quick assessment of resources, and as warranted add Cauchari East as another production unit to the "pipeline" of their lithium production assets.

 

Ultra Lithium - LOI to Acquire Lithium Salar Project - Announces $300,000 Private Placement

 
 

Ultra Lithium Inc. signed a binding Letter of Intent to acquire an 80% interest in a lithium salar property located in Puna Plateau north western Argentina from JinshanMinera Argentina S.A.("JMA"). The property is located about 25 kilometres to the west of Cauchari-Olaroz brine lithium deposit where Orocobre has a producing lithium mine, and a joint venture of Lithium Americas with SociedadQuímica y Minera de Chile (SQM) is developing a brine lithium project.

The property is comprised of six lithium and two gold exploration licenses covering an approximate area of 20,535 square kilometres. It has good infrastructure support with road and rail access to the provincial capital and port in Antofagasta. During the period from 2011-13, JMA carried out exploration work on the property which included drilling 20 shallow wells (1-5 m deep) and collecting 83 brine samples.Highlights of the assay results from these samples are presented below.

  • 31 samples returned over 150 ppm lithium (Li) and over 3,000 ppm potassium (K).
  • In 31 samples, average grade of lithium was 323 ppm (max. 800 ppm Li) and 4810 ppm potassium (max. 7500 ppm K).
  • Low magnesium (Mg) to Li ratio (11 in all samples).

Under the terms of LOI, Ultra Lithium will have an 80% interest in the project during the exploration stage and will increase its interest to 90% when the Company proceeds to the development stage. Ultra Lithium will be responsible for all the exploration and development expenditures on the property.

 
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