Engineering & Mining Journal

DEC 2017

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REGIONAL NEWS - LATIN AMERICA 20 E&MJ • DECEMBER 2017 www.e-mj.com Argonaut Acquires Cerro del Gallo Project in Mexico Argonaut Gold has reached an agreement with Primero Mining Corp. to obtain the Cerro del Gallo (CDG) project through the purchase of all the shares of Prime- ro's subsidiary San Anton Resource Corp. for $15 million in cash, which is payable upon closing. Argonaut expects to be able to recover approximately $1.7 million of value-added tax, which reduces the to- tal purchase price to $13.3 million. The company expects the transaction to close on or before November 30. "We view the acquisition of the CDG as a low risk, high reward investment," said Pete Dougherty, president and CEO, Argonaut Gold. "CDG is a project in our own backyard where we have the ability to leverage our existing operations and projects team's skill sets. We view CDG as a pipeline project that fits well within our portfolio of Mexican assets." The CDG deposit is located in the state of Guanajuato in central Mexico, approx- imately 270 kilometers (km) northwest of Mexico City in an active mining dis- trict. The property is accessible by road, rail and air services. Additionally, there is availability of a skilled local workforce, grid power, water, sealed roads, equip- ment suppliers and established transport routes, the company said. A Definitive Feasibility Study (DFS) for CDG was completed in May 2012. The DFS outlines an initial 7.2-year mine life, which could be extended to 14 years through a second stage carbon-in-leach (CIL)/heap leach mill expansion. The project has been planned as conventional open-pit truck and shovel operation cou- pled with a 4.5-million-metric-ton-per- year processing plant. The flow sheet de- sign is broadly based upon a conventional cyanide heap leach and gold on carbon recovery technologies, but will incorpo- rate a SART processing stage to facilitate copper removal prior to gold recovery. The plant design is based on the treatment of both fully and partially oxidized ores, pro- ducing an average of 95,000 ounces (oz) of gold equivalent annually at estimated cash costs of $700/oz. Operations Resume at Uchucchacua Mine in Peru Compañia de Minas Buenaventura, Peru's largest publicly traded precious metals mining company, reported that its Uchuc- chacua mine has resumed operations. A task force, "mesa de trabajo," was estab- lished on November 3 by the Office of So- cial Affairs of the Ministry of Energy and Mines with the participation of other pub- lic offices, including representatives from the Prime Minister's office, to end the conflict and resume negotiations with the Oyon community. It removed the road- block, which was preventing Buenaventu- ra's team from entering the Uchucchacua mine site. Normal operations at Uchuc- chacua resumed on November 4. The Oyon community allegedly adopt- ed a more aggressive negotiating position related to Buenaventura's use of lands by its Uchucchacua mine. This act, accord- ing to Buenaventura, did not acknowl- edge an agreement previously estab- lished between the Oyon community and Buenaventura, which was signed in the 1970s. Threats by community leaders re- sulted in a work stoppage in Uchucchac- ua's production, which began on October 31, the date on which the plant's sched- uled planned preventive maintenance had concluded. Lundin Orders Long-lead Process Equipment for Fruta del Norte Lundin Gold has announced that long- lead-time process plant equipment for its Fruta del Norte gold project in Ecuador has been ordered and that soft tunneling for mine development is well advanced. The long-lead-time grinding equipment package, including the SAG and ball mills, complete with motors, was award- ed to Outotec Chile S.A. Outotec was also awarded the flotation and filtration pack- ages. Orders for the remaining process plant equipment packages are expected to be awarded by year-end. The facilities to support Fruta del Norte development, including offices, mine dry, warehouse, maintenance facilities, and batch plant have been built and are oper- ational. The earthworks for the 1,000-per- son construction camp are mostly com- plete, and the camp is scheduled for completion in the first quarter of 2018. Both portals for mine access are in place. Soft tunneling through the initial clay began on September 20 for the first decline and on October 7 for the sec- ond. The transition from soft tunneling to hard-rock development was scheduled to begin by year-end. An engineering, procurement, and construction (EPC) contract for the pow- er transmission line that will connect the national grid at the Bomboiza substation to Fruta del Norte has been awarded. Cerro del Gallo consists of 12 concessions with some mines that were formerly worked for high-grade vein-hosted gold and silver.

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