Engineering & Mining Journal

NOV 2018

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NEWS-LEADING DEVELOPMENTS 6 E&MJ • NOVEMBER 2018 OZ can increase its interest in West Mus- grave to 70% by investing an additional $14 million toward project studies and regional exploration. Current work at West Musgrave is based on a "further scoping study" (FSS) completed in November 2017 that consid- ered an open-pit mining project having an initial mine life of eight years, with several opportunities to add to mine life through upgrading of inferred resources, develop- ing other known deposits on the West Mus- grave property, and continuing to advance existing regional exploration targets. Based on a mining rate of 10 million metric tons per year (mt/y), the FSS esti- mated that average annual production at West Musgrave could come in at 20,000 mt/y to 25,000 mt/y of nickel and 25,000 mt/y to 30,000 mt/y of copper in separate concentrates during the first eight years of production. Pre-production capital costs were estimated at $730 million to $800 million. Mining would focus on the adjacent Nebo and Babel deposits, with the Nebo deposit to be mined first. At the time of completion of the FSS, the two deposits had a combined mineable resource of about 150 million mt, grading 0.35% nickel and 0.40% copper. Mining would be by open- pit methods, utilizing an appropriately sized earthmoving fleet operated by contractors. Ore processing would include con- ventional crushing, milling, and classifi- cation circuits, followed by two stages of conventional flotation with cleaning and re-cleaning to produce separate nickel and copper concentrates. Regarding completion of OZ Minerals' 51% earn-in to West Musgrave, compa- ny CEO Andrew Cole said ongoing study results have been encouraging in a num- ber of areas, including resource extension drilling and metallurgy, with good prog- ress also being made in heritage clear- ances and community engagement. Hydro Gets Go-ahead to Restart Alunorte at 50% On October 5, Hydro's alumina refin- ery Alunorte was granted an exceptional authorization by Brazil's environmental agency IBAMA to utilize its filter press technology in its processing of bauxite residues, which will extend the life of its DRS1 bauxite residue disposal area and allow Alunorte to continue operations on safe conditions. Following IBAMA's decision, Alunorte will be working with the secretary of state for environment and sustainability (SEMAS) to obtain the authorization to use the press filter on DRS1. This filter press provides stackable residues with considerably less water con- tent than the drum filter. After receiving this authorization, Alunorte will be able to restart the operation at 50% of capacity. "We are ready to restart our operations and we thank for all the support that we have received from the authorities and so- ciety," said John Thuestad, head of Hydro's Bauxite and Alumina business area. "We are now making every effort to go back to producing as we maintain our dialog with authorities to resume full production." Thuestad added that resuming 50% production at Alunorte would also allow Hydro's bauxite mine Paragominas and its joint-venture primary aluminum smelter Albras to continue operating at half capac- ity, as opposed to being fully shut down as a consequence of Alunorte being idled. Since March 1, Alunorte has been op- erating at 50% of its capacity, following orders from SEMAS and the court system. Consequently, Paragominas bauxite mine and Albras aluminum plant have also re- duced production by 50%. Americas Silver, Pershing Gold to Merge Americas Silver Corp. and Pershing Gold Corp. have agreed to merge. The trans- action pairs two polymetallic mines, the Galena Complex in Idaho and the San Ra- fael mine in Mexico, which are expected to produce approximately 7 million silver equivalent ounces (oz) with the Relief Can- yon (precious metals) development project in Nevada, which could potentially add ap- proximately 91,000 gold oz annually. "This transaction aligns with our stated initiative of building a profitable and low- cost precious metal company in the Amer- icas by operating and building low risk, low capital, high return projects," said Darren Blasutti, president and CEO of Americas Silver. "With the on-schedule and on-bud- get construction and rapid commissioning of San Rafael now successfully completed, we are focused on the next leg of growth — today's transaction delivers this growth platform, while also providing us with ad- ditional precious metal exposure and a near-term operating presence in Nevada." This transaction provides a clear path for the development of Relief Canyon, ex- plained Steve Alfers, president and CEO of Pershing. Pershing shareholders will receive 0.715 common shares of Americas Silver. The combined company will be man- aged by the executive team of Americas Silver, led by Blasutti as president and CEO. Alex Davidson will be the chairman of the combined company, which will comprise nine members. Pershing's board will designate one individual to join the combined board. The transaction, which requires share- holder approval, is expected to close in the first quarter of 2019. Work at OZ Minerals' West Musgrave project focuses on further drilling and improving metallurgical recoveries.

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