Engineering & Mining Journal

MAR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 13 of 67

REGIONAL NEWS - LATIN AMERICA 12 E&MJ • MARCH 2019 Leagold Planning Major Expansion at Los Filos Leagold Mining has reported results from an expansion feasibility study of its Los Filos gold operations in Guerrero state, Mexico, 230 kilometers (km) south of Mexico City. The study demonstrates the potential for development of the Berme- jal underground mine on the property, enlarging the Los Filos open-pit mine, re-phasing the Bermejal open pit into two distinct open pits (Bermejal and Guada- lupe), and construction of a carbon-in- leach (CIL) processing facility to comple- ment the existing heap leach facilities. Los Filos produced 137,161 ounces (oz) of gold during the first three quarters of 2018. The expansion would increase average annual production to 350,000 oz per year (oz/y) from 2021 onward, includ- ing average annual production of more than 400,000 oz/y from 2021 to 2023. Capital costs are estimated at $180 mil- lion to develop the Bermejal underground mine and construct the new 4,000-metric tons-per-day (mt/d) CIL plant with related infrastructure. Current operations would fund capitalized stripping during the initial expansion phase (2019 to 2020) at the Guadalupe and Los Filos open pits. Proven and probable mineral reserves at the project currently total 111.3 million mt at an average grade of 1.23 grams/mt for 4.5 million oz of contained gold. "When we acquired Los Filos in April 2017 from Goldcorp, we identified its potential to be developed into a long-life, low-cost operation with significant scale," Leagold CEO Neil Woodyer said. "During the 20 months since the acquisition, we have carried out extensive exploration pro- grams for both open-pit and underground deposits, developed a 1,330-m ramp to ac- cess the orebody at Bermejal underground, completed the Bermejal underground mine design, completed comprehensive metal- lurgical test work on all of the mineral de- posits to support the CIL plant design, and learned a lot from current operations." Investment to date is approximately $30 million and forms the basis of the independent feasibility study and a 43- 101 technical report, Woodyer said. "The study forecasts a 10-year mine life with annual gold production approximately doubling from current rates. The Los Filos mineral reserves have increased to 4.5 mil- lion oz from 1.7 million oz at the acquisi- tion in 2017. "The study identifies a new operating strategy that includes three large open pits, two high-grade underground mines, the addition of a CIL plant to process the higher-grade ore, and the continued heap leaching of the lower-grade open-pit ore. The Los Filos expansion will also bene- fit from existing operations and excellent infrastructure. Approximately 51% of the gold production in the life-of-mine plan is from the CIL plant and 49% is from the existing heap leach facility. "With this very positive study complet- ed, we are now putting its findings into our overall corporate business model for planning and corporate financing purpos- es. It is obviously a project we should un- dertake, and, therefore, we are preparing a Los Filos development plan that includes construction planning, optimizing the se- quencing of the major expansion projects, and recognizing the social and economic benefits created by the expansion oppor- tunities and the engagement required from employees, contractors, unions, and community members," he said. Hard Rains Shut Down Mines in Northern Chile More than 11.4 millimeters of water fell in February in Calama, northern Chile, which is equivalent to two years of rainfall in the area. The water generated flooding, roadblocks and the isolation of hundreds of people who have not been able to leave their homes. The bad weather also par- alyzed operations at the Chuquicamata and El Abra divisions of Codelco. "The operations of each division were suspended for prevention, to protect the safety of people," said the state, in a press release that was released by the Chilean newspaper El Mercurio. Codelco also reported that its workers were sent to their homes until the climat- ic and working conditions are optimal enough to resume work. The heavy rains also caused damage to the copper facilities. "The Chuquicamata division facilities suffered only the alteration of an electri- cal substation, and the emergency teams are working to normalize the system's ac- tivities," the company said. ONEMI (The Chilean National Office of Emergency of the Interior Ministry) said the precipitation in the northern zone continued until February 9. The rains went from moderate to strong in the foothills and highlands, in the regions of Arica and Parinacota and Tarapacá. Minera El Abra is still affected by rain in the north of Chile, and the mine is not fully operational yet. The minister of mines recently visited the mine and held meet- ings with executives from the Chuquicama- ta division to check the damage and take stock of the current status of the operation. A small amount of rain turns into a huge hassle for Chilean copper miners.

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