Engineering & Mining Journal

FEB 2018

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REGIONAL NEWS - LATIN AMERICA 12 E&MJ; • FEBRUARY 2018 www.e-mj.com Yamana Gold reported that construc- tion activities at its Cerro Moro project in Argentina are on time and on budget. During the fourth quarter, management of the underground and open-pit mine development was transferred from the company's technical services division to its operations unit. In 2017, underground development progressed according to plan and produced a high-grade stock- pile of approximately 16,265 metric tons (mt), grading 27 grams per mt (g/mt) of gold and 1,725 g/mt of silver. In December, open-pit operations be- gan and development activities are now under way at the high-grade Escondida Central pit, where the ore zone starts at surface. The mechanical side of the plant was completed by year-end and electrical and instrumentation activities are sched- uled in the first quarter of 2018. So far, Yamana has invested $172 million at Cerro Moro, which is in line with the planned $178 million. The com- pany expects to achieve commercial pro- duction before midyear. During the first three years, annual production at Cerro Moro is expected to be 150,000 ounces (oz) of gold and 7.2 million oz of silver. Cerro Moro is on schedule to begin op- erations in a few months, said Peter Mar- rone, chairman and CEO, Yamana Gold. "We are now well-positioned with our six, and soon to be seven, producing mines along with a strong pipeline of advancing assets and opportunities," he said. Yamana entered into a copper ad- vanced sales program where it received $125 million in mid-January in exchange for 40.3 million lb of copper to be deliv- ered in the second half of 2018 and first half of 2019. This production represents approximately one-third of planned pro- duction in the period of the program or approximately 16% of the total produc- tion for 2018 and 2019. The copper is expected to be delivered against these prepaid volumes coincident with planned shipments of concentrate from its Chapa- da mine. Marrone explained that the program allows a better balance of cash flows quarter-over-quarter. Cash flows that would be generated from the production and sales of copper in later periods is be- ing realized in this quarter, which is nor- mally a weaker quarter for cash flows and, in this case, also coincides with the final quarter of significant capital expenditure in relation to Cerro Moro, he added. Tahoe Lays Off Miners in Guatemala Tahoe Resources has terminated 250 Minera San Rafael employees at its Es- cobal mine in Guatemala due to the com- pany being unable to resume mining fol- lowing its mining license suspension on July 5. Despite this difficult decision, Tahoe said it remains optimistic that based on legal precedent, the Constitu- tional Court will issue a favorable ruling reinstating the mining license and Escob- al will resume production. "Despite extensive efforts in Gua- temala, we have been unsuccessful in reaching a favorable resolution that would avoid negative impacts for all stakehold- ers, especially for our workforce and the local economy," said Ron Clayton, presi- dent and CEO of Tahoe Resources. Prior to the license suspension, Min- era San Rafael employed 1,030 people, 97% of whom are Guatemalan and 50% of whom are from the Santa Rosa region. PEA Supports Filo Mining's Multimetal Filo del Sol Project Filo Mining has reported the results of a preliminary economic assessment (PEA) of its 100% owned Filo del Sol project on the border between Argentina and Chile. The open-pit project would produce an estimated 50,000 metric tons per year (mt/y) of copper, 115,000 oz/y of gold, and more than 5 million oz/y of silver over a mine life of 13 years. Preproduction capital is estimated at $792 million, including $71 million in capitalized pre-stripping. Mine produc- tion would be followed by heap leach pro- cessing to produce copper cathode and gold-silver doré. The PEA estimates Filo del Sol's life- of-mine C1 cash costs on a co-product basis at $1.42/lb of copper equivalent. The C1 cash costs include at-mine cash operating costs, treatment and refin- ing charges, royalties, selling costs, and transportation costs and are reported on a $/equivalent payable unit of the primary metal. The Filo del Sol project is located 140 km southeast of Copiapó, Chile, and is covered under the Mining Integration and Complementation Treaty between Chile and Argentina, which provides the frame- work for the development of cross-border mining projects. The project is based on a high-sulphidation epithermal cop- per-gold-silver deposit associated with a large porphyry copper-gold system. The PEA contemplates mining the gold oxide, copper-gold oxide, and silver zones. Primary sulphide mineralization is not included in the PEA and remains a potentially significant upside opportunity for future development. Construction Advances at Cerro Moro Annual production at Cerro Moro is expected to be 150,000 oz of gold and 7.2 million oz of silver.

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