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18 E&MJ; • DECEMBER 2015 www.e-mj.com REGIONAL NEWS - LATIN AMERICA Codelco Lays Off 4,000 Workers Recently, 350 supervisors and 3,985 operators and contractors from Codelco were dismissed as a consequence of the sustained drop in copper price, according to officials. According to a press release issued by the state-owned company, this measure is "within the frame of the efforts made by the company to optimize its performance, thus responding to the effects resulting from the current low copper prices." This news was released just one day after the Chilean government announced a capitalization for $600 million. According to the company, this will also allow esti- mated yearly savings of $48 million. "These measures are…hard to imple- ment, but in view of the current copper price, and keeping in mind the commit- ments undertaken by the company, we are being forced to take every necessary step to ensure the viability of the corpo- ration," said Daniel Sierra, Codelco's human resources vice president. In total, 4,292 people have been ter- minated. According to Pizarro, these lay- offs have been carried out "without affecting the overall production." Codelco's Chairman Oscar Landerretche, said the situation "might become worse." The company anticipates a 20% downsizing in the budget for contract work. Codelco has also announced cutbacks on expenditures for exploration and technological innovation, and has delayed the replacement of equip- ment and noncritical spare parts. Pilot Tests Produce Ferronickel for Horizonte Horizonte Minerals announced in early November completion of an integrated rotary kiln-electric furnace pilot plant campaign on ore from its 100% owned Araguaia laterite nickel project in Parà state, Brazil. The pilot campaign was conducted at the Morro Azul pilot plant in Minas Gerais state. The Morro Azul plant was originally built by Anglo American and is now operated by Morro Azul in association with IGEO of Sao Paulo, Brazil. The facility has been used by a number of major nickel companies, including Vale and Anglo American, for pilot test work, staff training and final product testing. The Morro Azul plant processed a bulk sample of 160 wet metric tons (mt) of Araguaia ore over an 11-day period, 24 hours per day, and produced high-grade ferronickel to commercial specification on a continuous and sustained basis. The bulk sample was representative of ore that Horizonte anticipates will be processed during the first nine years of commercial operation at Araguaia. Drying and agglomeration produced excellent feed material for processing in the pilot plant's high-temperature rotary kiln. The kiln produced good quality calcine, with very low dust generation and favorable pre-reduction levels of about 60% for iron oxide and 10% for nickel oxide. Electric furnace smelting of the cal- cine produced high-quality ferronickel over a target range of commercial nickel grades and at a nickel recovery of more than 93%. Both ingot casting and nickel granulation of the ferronickel product were successfully demonstrated. The full range of pilot plant technical data will be incorporated into a full feasi- bility study for final commercial rotary kiln-electric furnace design due in 2016. Prior to completion of the pilot plant campaign, Horizonte announced in late September that it had reached an agree- ment to acquire Glencore's "Glencore Araguaia Project," adjacent to Horizonte's Araguaia project. Horizonte plans to com- bine the projects to create one of the world's largest nickel saprolite projects in terms of size and grade. Data from the Glencore project will be included in the full feasibility study. Horizonte anticipates that the com- bined resources of the two projects will provide ore grading 2% nickel over the first 10 years of a mine life of at least 25 years. An earlier prefeasibility study of Horizonte's standa-lone Araguaia project assumed plant feed grading 1.76% nick- el over the first 10 years of operation, delivering 15,000 mt/y of contained nickel in a ferronickel product. Horizonte CEO Jeremy Martin said, "The consolidation of the Araguaia dis- trict is a major achievement for Horizonte. The enlarged project is ideally placed in the commodity cycle to be advanced with the aim of commencing production with- in the next five years when the supply/ demand fundamentals for nickel are expected to be more favorable. Horizonte Minerals is headquartered in London, England, and is listed on the AIM and Toronto stock exchanges. Coeur Reports Enhanced Outlook for Palmarejo Coeur Mining has reported positive results from an updated NI 43-101-compliant technical report on its Palmarejo silver- gold mining complex in western Chihuahua state, Mexico. The report incor- porates the Independencia Este deposit, which Coeur acquired when it purchased Paramount Gold and Silver Corp. in April. The updated mine plan calls for pro- duction of approximately 5.9 million oz/y of silver and 94,000 oz/y of gold over a seven-year mine life. Pre-tax net cash flow of $305 million represents a four- fold increase from the $75 million of pre- tax net cash flow in the previous Palmarejo technical report. Coeur President and CEO Mitchell J. Krebs said, "The technical report reflects a robust, high-margin mine plan at cur- rent metal prices, showing substantial improvements in production, mine life, grades, recoveries, costs, and cash flow compared to the technical report for Palmarejo filed eight months ago. This enhanced plan demonstrates Palmarejo's transition to 'quality over quantity' pro- duction and highlights the importance of the Independencia Este deposit. This adjacent orebody carries a silver equiva- lent reserve grade 17% higher than Guadalupe and is not subject to the Franco-Nevada obligation impacting other areas at Palmarejo." The mine plan assumes silver and gold prices of $15.50/oz and $1,150/oz, respectively, for the next two years, fol- Ore sample from Horizonte's Araguaia laterite nickel project in Parà state, Brazil.