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NEWS-LEADING DEVELOPMENTS MARCH 2017 • E&MJ 5 www.e-mj.com mately 1.9 million oz of proven and prob- able reserves in the Deep South zone, of which more than 80% is oxide. The permitting process, which began in 2016, is expected to take approximate- ly three to four years, including the prepa- ration of an Environmental Impact State- ment. A record of decision is expected in 2019 or 2020. Dewatering and develop- ment work could begin as early as 2019 or 2020, with initial production from Deep South commencing in 2022 or 2023. Barrick expects to complete the feasibil- ity study by the end of 2017, which will focus on processing, backfill and stope sequencing to optimize free cash flow. The Goldrush project continues to ad- vance according to schedule, with the po- tential to become Barrick's newest mine in Nevada by 2021. Average annual produc- tion for the first full five years of operation is expected to be approximately 450,000 oz of gold. Goldrush is expected to have a mine life of 21 years, with first production as early as 2021, and sustained produc- tion in 2023. The initial capital costs are estimated at $1 billion and the project now has 9.6 million oz of measured and indicated gold resources, and 1.9 million oz of inferred gold resources. During 2016, Barrick obtained the necessary permits for the construction of twin exploration declines. The twin de- cline portal access site has been cleared, and work is expected to begin on the por- tal pad in the first quarter of 2017. Barrick is evaluating a sequenced ap- proach to extend the life of the Lagunas Norte mine by optimizing the recovery of carbonaceous oxide ore contained in ex- isting stockpiles, followed by extraction and processing of refractory ores. The prefeasibility study for the Re- fractory Ore project contemplated an initial capital investment of approximate- ly $640 million for the installation of a 6,000-metric-ton-per-day (mt/d) grind- ing-flotation-autoclave and carbon-in- leach processing circuit to treat refractory material. Once ramped up, the circuit has the potential to produce an average of 240,000 oz/y of gold. Over the past year, Lagunas Norte has developed a process to treat certain car- bonaceous oxide material already stock- piled at the mine through heap leaching, helping to bridge the gap between pro- cessing of oxide and refractory materials. This has created an opportunity to first construct a grinding and carbon-in-leach processing circuit that would treat the re- maining carbonaceous oxide material at the site. This would allow the company to defer the construction of the flotation and pressure oxidation circuits required for treating refractory ore, optimizing the timing of capital expenditures. Construction of these facilities could begin in late 2018, with first production in 2020. Construction of the refractory ore processing facilities (flotation and pres- The exploration sector remained de- pressed again in 2016, after a record high of more than $20.5 billion in 2012, ex- ploration budgets have now fallen for four consecutive years. The 2016 exploration budgets by 1,580 companies totaled only $6.89 billion, a year-on-year drop of 21%. The average 2016 exploration budget among the surveyed companies was $4.4 million, the lowest since 2009, and the median budget was $800,000, which is the smallest in more than a decade. These details and more can be found in the 2016 Corporate Exploration Strat- egies (CES) report, published by S&P Market Intelligence, working in conjunc- tion with the Prospectors and Develop- ers Association of Canada. The report covers an estimated 95% of worldwide commercially oriented nonferrous explo- ration budgets. The report does say that some positive signs have recently emerged with financ- ings having gained traction since March 2016. Nevertheless, caution persists as the amounts being raised remain far be- low those of a few years ago, and financ- ings for the fourth quarter of 2016 seem likely to have been lower than required to suggest a significant improvement in ex- ploration budgets this year. In 2016, the CES report said that com- panies lowered their spending in an attempt to reassure investors, with the major com- panies shrinking exploration departments and the junior companies slashing spend- ing. Across the board, projects were put on hold and agreements renegotiated, with a marked shift away from grassroots explora- tion in favor of later-stage, less-risky assets. As the industry struggles, organic growth will continue to slow and project pipelines will be affected. Exploration spending by the major companies, which are likely to remain focused on brownfields targets until more positive economic con- ditions prevail, characteristically outper- form, or at least track, the industry trend. Therefore, given some positive signs, S&P Global Market Intelligence expects a small uptick in the majors' budgets in 2017. Unfortunately, it seems likely that the aggregate exploration budget for junior explorers will be slightly lower in 2017. Given the still mixed indicators, the CES team is cautiously optimistic overall, and projects total corporate ex- ploration budgets for 2017 to be flat. Exploration Budgets Fall for a Fourth Consecutive Year Estimated global nonferrous exploration budgets have fallen to their lowest point since 2006.