Engineering & Mining Journal

APR 2018

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 45 of 91

PERU GOLD 44 E&MJ • APRIL 2018 (Total CAS hit $142 million, up from $135 million in 2016.) That increase cannot be attributed to exploration expenses, which fell 13% to $37 million in 2017 from $43 million in 2016. Regarding exploration, in 2016, Bue- naventura announced the mine was under- going a "major effort" to replace reserves. "This mine is reaching increasingly deep- er, and we are finding high-grade gold ore that promises interesting possibilities." Exploration at Orcopampa in 2016 targeted a handful of veins. Last year, the company performed more than 15,700 m of exploration and development work. "An additional 46,403.95 m of diamond drill holes were performed," Buenaventura re- ported. High grade reserves were gained in the Pucarina vein, the company report- ed. Four veins were slated for further ex- ploration in 2017. Also, in 2016, the mine tested cyani- dation flotation of tailings to recover both gold and silver. "In 2016, we success- fully recovered an additional 2,447 oz of gold and an additional 94,760 oz of silver via flotation, while in 2017, we expect to recover 3,670 oz of gold and 142,140 oz of silver in addition to those previously planned," Buenaventura reported. The company's de-bottlenecking pro- gram will continue at the mine in 2018, with focuses on differential cut-off and dilution control, and infrastructure and contract optimization. The median gold production guidance for 2018 is 200,000 oz, a roughly 5% increase yoy. Preliminary proven and probable reserves were listed in February at 851,000 mt grading at .459 oz/mt for 391,000 oz. La Zanja Searches for More Gold Buenaventura's No. 3 mine by total pro- duction, La Zanja, mined better grade over the last half decade than did Yanacocha, logged mostly stable costs and improving sales for that timeframe, but will see total gold output fall dramatically in 2018. The gold and silver mine site, located in the Pulán district of Santa Cruz, in Cajamar- ca, is operated by Minera La Zanja S.R.L, of which primary operator Buenaventura owns 53.06%. The rest is held by Newmont. Buenaventura takes credit for discovering the San Pedro and Pampa Verde oxide de- posits. Each has its own pit and the ore is loaded with excavators and trucked to the nearby San Pedro Sur heap (cyanidation) leach pad. The resulting solution is piped to the processing plant for zinc precipitation and carbon adsorption processing. The elu- ent solution goes to Minera Yanacocha for desorption and smelting. Operations com- menced in 2010, and in 2017, the compa- ny reported the mine had almost produced a grand total of 852,000 oz of gold (and 2.2 million oz of silver). Gold production at the mine has been falling since 2014, when it hit a high of 143,573 oz. It fell 2% yoy in 2015 to 141,000 oz, roughly 1% in 2016 to 140,000, and 9% in 2017 to 129,000. The volume sold fell 15% yoy in 2017 while selling expenses fell only 1%. Again, one of the backstories to the numbers is declining grade, which fell 29% between 2013 and 2016. For rough- ly the same period, CAS oscillated, jump- ing 37% yoy in 2015 to $112 million and then falling 24% in 2016 to $85 million. In 2016, CAS were up 6% over 2012. In 2017, the miner spent $847,000 on exploration at the site, up 43% yoy. Some of that went to "exploring with diamond drill- ing in other areas around San Pedro Sur, Pampa Verde, such as Casa Blanca and El Buitre," Buenaventura reported. That rep- resented a continuation of work from the year prior. "In 2016, a total of 15,705 m of diamond drill holes were carried out in the operating area: 8,067 m in the Pam- pa Verde pit and 7,638 m in San Pedro Sur," the company reported. "Exploratory diamond drill holes were also implemented in the Casablanca and El Buitre areas, for a total of 8,433 m in 41 boreholes." The company spent $270,000 on exploration in a non-operating area dubbed Emperatriz. Such exploration has yet to compel the company to announce a life-extension project, and it instead logged a $21.6 mil- lion impairment for La Zanja in Q4 2017.

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