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REGIONAL NEWS - LATIN AMERICA Vale Idles Three Pellet Plants Shifting steel-industry demand for raw materials prompted Vale to suspend operations at two of its pel- let plants in Brazil. Vale reported in early October 2012 that an additional portion of its iron ore pro- duction in Brazil will be allocated to increase the supply of sinter feed, conse- quently reducing the availability of pellet feed for its pelletizing operations. As a result, the company is temporarily sus- pending operations at its São Luís and Tubarão I and II pellet plants, located in the states of Maranhão and Espírito Santo, respectively. These plants pro- duced 4.926 million mt of pellets during the first half of 2012, accounting for 18.3% of Vale's total pellet production. Employees at the plants will be reassigned to other operational activities at Vale. Vale's reduction in pellet production stems from a change in the composition of steel-industry demand for raw materi- als, where there has been a contraction in pellet consumption in favor of greater use of sinter feed. Vale is continuing to invest in its iron ore and pellets growth pipeline, remaining confident in the long-term iron ore market fundamentals and, above all, in the high competitive- ness of its world-class assets, the Vale statement said. 14 E&MJ; • NOVEMBER 2012 Torex Advancing its Morelos Gold Project Torex Gold has received a final feasibility study from M3 Engineering & Technology for its Morelos gold project, located about 180 km southwest of Mexico City, and has initiated procedures for the imple- mentation of the study's recommenda- tions to develop the project to commercial production. Capital expenditures to com- mercial production are estimated at $675 million. On October 23, 2012, Torex closed a bought deal for units of the com- pany that raised C$380 million that will be used to fund development of the pro- ject and for general corporate purposes. The Morelos feasibility study models estimated proven and probable mineral reserves containing 4.1 million oz of gold. The study calls for the development of two independent open-pits to mine the skarn- hosted gold and silver mineralization. The pits will feed a centrally located cyanide- leach/carbon-in-pulp processing plant, with dry stack tailings deposited just to the west of the plant. The life-of-mine strip ratio will be 5.6:1, waste to ore. The Morelos plant has a designed throughput rate of 14,000 mt/d. Head grade to the mill will be 2.61 g/mt gold and 4.35 g/mt silver. Startup is targeted for 2015. A two-year ramp-up period will be required before the Morelos pits can de- liver the full designed plant throughput of 14,000 mt/d. Ramp-up will be fol- lowed by 8.5 years of full production, after which production will fall off sharply over the remaining four years. Production during the first 10 years of Morelos mine life is projected to average 337,000 oz/y of gold and 211,000 oz/y of silver in doré bars. Torex will seek to extend production beyond 10 years through exploration by potentially upgrading ounces currently categorized as inferred mineral resources and by making new discoveries on a highly prospective land package. Agnico-Eagle Begins Construction at La India Agnico-Eagle Mines has begun construc- tion at its La India gold project in Sonora, Mexico, approximately 70 km northwest of the company's Pinos Altos mine. The pro- ject is being developed as an open-pit, heap-leach operation, with commercial production expected in the second half of 2014. Production is forecast at 90,000 oz/y over an initial mine life of eight years. Construction costs for La India are expected to total about $158 million, which will be funded from Agnico-Eagle's operat- ing cash flows. Sustaining capital costs are forecast to total about $25 million over the eight-year mine life. The feasibility study estimates that the project will generate an internal rate of return of approximately 31%, assuming a gold price of $1,379/oz. Initial probable reserves at La India total approximately 44.6 million mt, grad- ing 0.65 g/mt gold, containing 930,000 oz. These amounts are based on drilling through the end of May 2012. Infill and step-out exploration drilling will continue in an effort to further delineate and expand the mineral reserves and resources. La India mine production is planned to average 16,000 mt/d at a waste-to-ore strip ratio of 1:1. Metallurgical recoveries are estimated to average approximately 80%. Life-of-mine total cash costs are expected to average $500/oz. Agnico-Eagle acquired the La India property in November 2011 when it acquired Grayd Resource Corp. Sulliden Reports Positive Results from Shahuindo Sulliden Gold has received a positive feasibil- ity study from Kappes, Cassiday & Associates and Mine Development Associates for its 100%-owned Shahuindo gold project in northern Peru. The study describes a 10,000-mt/d mining operation that would produce an average of 84,500 oz/y of gold and 167,200 oz/y of silver over a 10.4-year mine life. Pre-production capital costs are estimated at $131.8 million, and total cash operating costs are estimated at $552/oz of gold, net of silver byproduct credits. Oxide ore is forecast to be mined using an owner-operated mining fleet. Mining bench height will be 8 m. The life of mine stripping ratio is 1.91:1. Ore will be trucked to a crushing and agglomeration facility near the mine where it will be crushed to 100% passing 32 mm; agglomerated with cement; and conveyed to the leach pad. Waste from the mine will be sent to a sin- gle dump located adjacent to the mine. The project is located about 80 km from the city of Cajamarca. www.e-mj.com