Engineering & Mining Journal

JUN 2018

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Page 23 of 115

REGIONAL NEWS - LATIN AMERICA 22 E&MJ • JUNE 2018 Sal de Vida Lithium Brine Project is a Go for Galaxy Galaxy Resources has completed an up- date of the definitive feasibility study (DFS) of its Sal de Vida lithium brine project on the Salar del Hombre Muerto in northwest Argentina that reaffirms the potential for a long-life, low-cost, highly profitable operation, with a revised post- tax net present value estimated at $1.48 billion at an 8% discount rate. Galaxy plans to produce both bat- tery-grade lithium carbonate (Li 2 CO 3 ) and potash products through the treatment of lithium enriched brine from the Salar del Hombre Muerto. The updated DFS calls for production of 25,000 metric tons per year (mt/y) of battery-grade Li 2 CO 3 and 94,000 mt/y of potash over an initial project life of 40 years. The project also has significant, po- tential-future upside from further re- source definition and subsequent reserve upgrade. The DFS models an operation with an initial three-year ramp up to full planned Li 2 CO 3 production. Potash pro- duction is deferred for two years after the start of Li 2 CO 3 production. At the planned production rate, Sal de Vida has the potential to generate average annual revenues of $360 million and av- erage annual operating cash flow (EBIT- DA) of $270 million. Average operating costs to produce battery-grade Li 2 CO 3 are estimated at $3,144/mt after potash credits FOB Antofagasta, Chile, evidenc- ing the low-cost nature of project. Revised total capital costs for the pro- ject are estimated at $474 million. Current mineral reserve estimates for Li 2 CO 3 equivalent at Sal de Vida are 181,000 mt proven and 958,000 mt probable. Combined measured, indicated and inferred resources stand at 7.2 mil- lion mt of Li 2 CO 3 equivalent. The Sal de Vida project is well ser- viced by nearby infrastructure, including major highways, a national and interna- tional rail link that connects to the Port of Antofagasta in Chile, and access to the power grid and a gas pipeline. "We are very pleased that the formal revision to the economics of Sal de Vida continue to reinforce a world-class asset, as well as a project with a robust finan- cial profile," Galaxy Managing Director Anthony Tse said. "Galaxy has appointed JP Morgan Australia as financial advisor to assist in evaluating potential strategic partnership and/or off-take opportunities to advance project development." Galaxy is a lithium-focused, Austra- lia-based company whose assets include the Mount Cattlin mine in Western Aus- tralia and the James Bay lithium pegma- tite project in Québec, Canada. Operations Improve at San Ramon in Colombia Red Eagle Mining said it is well on the way to overcoming the challenges faced during the first half of 2017. At the time, the mine was significantly behind in de- velopment due to initial difficult ground conditions pushing the primary ramp through the saprolite during 2016. "Since raising additional capital and recruiting new experienced operat- ing personnel in August 2017, we have made immense progress," said Ian Slat- er, CEO, Red Eagle Mining. "We suc- cessfully completed 6,429 meters (m) of underground development, 21,688 m of underground infill drilling on 10-m centers and commenced stope mining in October 2017." The Red Eagle plant began production on January 2. This development has given Red Ea- gle access to up to 44 active ore pro- duction faces at any time, depending on backfill and breasting cycles, allow- ing much more operational flexibility. Six new attack ramps are expected to be completed during the second quar- ter, which will significantly increase the number of production faces available en- abling another large jump in production, the company said. "Stope mining operations contin- ued to ramp up and have increased each month since October 2017, with an average of 680 metric tons per day (mt/d) mined in April 2018," Slater said. "These additional production fac- es will allow mining rates to continue to increase to an estimated 1,000 mt/d in July, which is the designed production for the San Ramon mine." The life of mine, mill processed grade was estimated in the feasibility study at 4.5 grams per mt (g/mt) of gold. During March, the ore processed had an average grade of 3.9 g/mt gold. With more mining experience at San Ramon and operational improvements being implemented, Slater expects the grade to improve to 4.5 g/mt. "A majority of our production is cur- rently from the wider veins near the footwall of the shear zone," Slater said. "Occasionally, the higher-grade veins near the hanging wall are too thin to eco- nomically mine. Two smaller loaders will be put into operation during Q3, which will permit mining of these high-grade stopes with much less dilution increas- ing both tonnage and grade with no ad- ditional development. "During 2017 we studied and tested backfill alternatives," Slater said. "As a result of the updated ground support, drilling and blasting procedures imple- mented during the second half of 2017, quicker backfill cycle times and mining narrower stopes, full paste fill is not re- quired. Rather than 100% paste fill, a lay- er of cemented paste fill is being injected on top of the backfill, where appropriate, to tighten fill and minimize ore loss." Galaxy could produce 25,000 mt/y of Li 2 CO 3 .

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