Engineering & Mining Journal

NOV 2017

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 17 of 83

REGIONAL NEWS - LATIN AMERICA 16 E&MJ • NOVEMBER 2017 18.8 million metric tons (mt) with an average ore grade of 8.2% zinc, plus an additional inferred mining resource of 5.4 million mt of tin with 0.89% ore grade. The company's Peruvian representa- tive, Alvaro Fernández-Baca, said his zinc exploration project is a good opportunity to invest. "In the last year, the price of zinc has more than doubled and, since zinc prices have been low for a long time, there are not many zinc exploration proj- ects right now," Fernández-Baca said. More than 17,500 m have been drilled at Ayawilca thus far this year, and the company has made a new discovery in an area they call Ayawilca Sur. Americas Silver Ships First Cons From San Rafael Americas Silver Corp. announced that first processing of ore from its San Rafael project occurred in the last week of Sep- tember from development stockpiles. The first lead and zinc concentrates produced from the company's newly modified Los Braceros Mill have been shipped to the Port of Manzanillo from the Cosalá Oper- ations in Sinaloa, Mexico. The reconfigured flotation circuit at the Los Braceros Mill has been success- fully commissioned. Initial milling rates, metal recoveries and concentrate grades are meeting expectations, according to the company. It expects San Rafael to be the sole source of mill feed by the end of November with commercial production expected before the end of the fourth quarter. Five development headings are currently accessing ore in the southern lobe of the Main Zone at San Rafael and will be stockpiled while the existing Nues- tra Señora ore is processed. The Nuestra Señora mine is expected to be put on care and maintenance by the end of the first quarter of 2018, although additional ma- terial is available to supplement mill feed. "Initial concentrate deliveries were on time, met internal targets and third party specifications," said Darren Bla- sutti, president and CEO, Americas Sil- ver. "Despite a transitional third quarter, the startup of the San Rafael mine and continued strengthening of zinc and lead prices sets up our fourth quarter and next year for significantly reduced all-in-sus- taining costs and free cash flow. We ex- pect to use this cash flow to further ex- plore, develop, and organically grow our large and prospective silver reserves and resources without equity dilution." In addition to its Cosalá Operations in Sinaloa, Mexico, Americas Silver owns and operates the Galena Complex in Ida- ho. The company has also acquired an option on the San Felipe development project in Sonora, Mexico. Glencore Increases Stake in Volcan After concluding an agreement with cer- tain shareholders of Volcan Compañia Minera S.A.A., a Peruvian polymetallic miner, Glencore will acquire at least an additional 27% of the total class A com- mon shares of Volcan for a total consid- eration of $531 million ($1.215/share). Glencore has been a shareholder in Vol- can since 2004 and it currently holds 18% of the total class A common shares of Vol- can and class B common shares reflecting an economic interest in Volcan of 7.68%. To implement the acquisition, Glencore intends to make an offer to all of Volcan's shareholders via a public tender offer or oferta pública de adquisición de acciones subject to the Peruvian laws and regula- tions. The offer will be for up to 48.19% of the total class A common shares of Volcan at an offer consideration of $1.215/share. Glencore expects to make the offer to Vol- can shareholders by no later than October 27 and the offer is expected to complete in November/December timeframe. Depending on the level of acceptanc- es, Glencore will hold between 45% and 66% of the total class A common shares and will have an economic interest in Vol- can of between 19% and 28%. The ag- gregate consideration payable by Glencore pursuant to the terms of the offer will be between $531 million and $956 million, depending on the level of acceptances. Volcan's operations are located in the richest polymetallic production area in Peru, producing some of the highest quality zinc concentrates. The transaction will provide an increase and extension of Glencore's zinc production profile and the opportunity for synergies with Glencore's existing Peruvian zinc operations. ArcelorMittal Invests in Mexican Operations ArcelorMittal announced a major $1 billion, three-year investment program for its Mexican operations, which is fo- cused on building ArcelorMittal Mexico's downstream capabilities, sustaining the competitiveness of its mining operations and modernizing its existing asset base. The program is designed to enable Arce- lorMittal Mexico to meet the anticipated increased demand requirements from do- mestic customers, realize in full Arcelor- Mittal Mexico's productive capacity of 5.3 million metric tons (mt) and significantly enhance the proportion of higher-value added products in its product mix. The main investment will be construc- tion of a new hot strip mill. Construction will take approximately three years and, upon completion, will enable ArcelorMit- tal Mexico to produce about 2.5 million mt of flat-rolled steel. Coils from the new hot strip mill will be supplied to domes- tic, non-auto, general industry custom- ers. Further investments will be made at Lázaro Cárdenas to improve the quality and productivity of the asset base, with additional investment in the group's Mex- ican mining operations. The announcement follows confirma- tion that the Mexican government has established five Special Economic Zones (SEZ) in southern Mexico to attract in- frastructure investment in areas of un- developed economic potential. Lázaro Cárdenas, home to ArcelorMittal Mexi - co's primary steelmaking operations, was named an SEZ. ArcelorMittal Mexico currently pro- duces about 4 million mt of steel a year. Following completion of the investment program, production would be optimized to roughly 5.3 million mt/y, with the pro- portion of finished steel for the domestic Mexican market significantly expanded. Flat rolled steel production would total 2.5 million mt/y, long steel 1.8 million mt/y with the remaining 1 million mt made up of semifinished slabs. A recon fi gured flotation circuit has been commissioned at the Los Braceros Mill.

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