Engineering & Mining Journal

JAN 2018

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REGIONAL NEWS - LATIN AMERICA 12 E&MJ • JANUARY 2018 Coeur Sells Bartolomé to Argentum Coeur Mining plans to sell its subsidiary, Empresa Minera Manquiri S.A., which owns and operates the San Bartolomé mine and processing facility located near Potosí, Bolivia, to Argentum Invest- ments AB, a privately held Swedish com- pany owned by a group of Mexican indi- viduals with extensive mining experience in Latin America. Under the terms of the agreement, af- filiates of Argentum will acquire Manquiri from Coeur for 2% net smelter returns royalty (NSR) payable to Coeur on all metals processed through the San Bar- tolomé's processing facility (estimated to be $5 million); all refunds of pre-closing value added tax (VAT) that will be collect- ed or received by Manquiri in the future ($13 million); and one-year promissory notes equal to Manquiri's cash and cash equivalents ($28 million). As an all-stock transaction, except as otherwise specifically provided in the agreement, all of the current and future assets and liabilities of Manquiri, in- cluding its processing facility, mineral rights and other assets, and its current and long-term liabilities (including future reclamation and closure liabilities), will remain with Manquiri after ownership of the entity is transferred to Argentum. "San Bartolomé was an important op- eration for the company after it was con - structed and placed into production in 2008," said Mitch Krebs, president and CEO, Coeur Mining. "However, the mine's short remaining life, higher operating costs and future estimated closure-re- lated costs led the company to conclude that a sale to a new owner at this time made strong strategic sense." By retaining a 2% NSR, Krebs said Coeur will preserve positive exposure to San Bartolomé as Argentum continues to operate the mine and pursue opportuni- ties to generate additional value from it. The transaction is expected to close in early 2018. SSR Receives EIA Approval for Chinchillas Project Argentine regulatory authorities have approved the Environmental Impact As- sessment (EIA) for Puna Operations Inc.'s Chinchillas project in Jujuy Province. Development activities will commence, according to SSR Mining, with first ore feed to the Pirquitas mill expected in the second half of 2018. Priority devel- opment activities include initiating the earthworks projects at Chinchillas, releas- ing construction contracts and commenc- ing construction activities at Pirquitas, as well as pioneering works for pre-stripping at the Chinchillas deposit. "The EIA approval is another positive step forward for our growth strategy," said Paul Benson, president and CEO, SSR Mining. "Our team can now accelerate development and construction activities to begin processing ore in 2018." Puna is a joint venture that consists of the Pirquitas and the Chinchillas prop- erties, owned 75% and operated by SSR Mining. Chinchillas is a silver-lead-zinc deposit located approximately 42 kilome- ters (km) by road from the Pirquitas prop- erty. The prefeasibility study for the Chin- chillas project evaluates the development and construction of an open-pit mine and supporting infrastructure to supply ore to the Pirquitas processing facilities over an eight-year active mining period. The oper- ation is expected to produce a silver-lead concentrate and a zinc concentrate with an average annual production of 6.1 million ounces (oz) of silver, 35 million pounds (lb) of lead and 12.3 million lb of zinc at cash costs of $7.40 per payable ounce of silver sold. The Chinchillas proj- ect has low capital intensity with an esti- mated $81 million capital costs, based on initial capital expenditures and using certain property, plant and equipment from the Pirquitas property. SSR believes the project has an attractive post-tax net present value of $178 million, based on a 5% discount rate, and post-tax internal rate of return of 29%. Ero Reports Progress With Vermelhos Development Ero Copper has reported continued prog- ress in the development of its Vermelhos underground copper mine in Bahia, Brazil. Through October, approximately 1,167 meters (m) of underground development had been completed, comprising 635 m of primary ramp development, 102 m of auxiliary ramp development, and 430 m of secondary development. The average development rate since primary ramp de- velopment began in early May has been approximately 105 m per month, well ahead of the planned 75 m per month. The Vermelhos mine is located approx- imately 80 kilometers (km) north of Ero's Pilar underground mine and Caraíba mill. The current NI 43-101 compliant prov- en and probable mineral reserve estimate is 2.4 million metric tons (mt) grading 4.15% copper. Mine design calls for pro- duction of up to 2,500 mt/d of ore. Planned mine depth is currently limited to 300 m, which is the limit to date of exploration activities. Mineral reserves to that depth are sufficient for about five years of production. The main Vermelhos deposit remains open along strike and at depth. Long-lead-time equipment orders re- quired for first production at the Vermel- hos mine have been placed, and deliver- ies are expected to begin in the second quarter of 2018. Construction of the haul road to deliver ore to the Caraíba mill will begin in the first quarter of 2018. Located at 15,400 ft above sea level in Bolivia, San Bartolomé produced 5.5 million oz of silver in 2016.

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