Regional News - Latin America September 2017

BHP Approves Investment to Expand Life of Spence Copper Mine

In mid-August, BHP approved a $2.46 billion Capex investment for the Spence Growth Option (SGO) at the Spence open-pit copper mine in northern Chile, which will extend the mine life by more than 50 years. Andrew Mackenzie, CEO, BHP, said the SGO project supports the company’s strategy to deliver near-term, valuable copper production.
In the first 10 years of operation, incremental production from SGO will be approximately 185,000 metric tons per year (mt/y) of payable copper in concentrate and 4,000 mt/y of payable molybdenum, with first production expected in the 2021 financial year.

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Hecla Secures San Sebastian Mill Through 2020

Hecla Mining announced it has reached an agreement that will allow it to lease the Velardeña mill, located near San Sebastian, for an additional 24 months. The exploration budget at San Sebastian has been increased by $1.1 million for additional drilling and will bring the 2017 exploration budget at the project to $5.3 million. Goals with this funding include identifying another sulphide zone at depth, similar to the previously discovered Hugh Zone, and discovering additional oxide ore. Strong intersections from a recently discovered zone on the East Francine Vein, including 0.72 ounces (oz) per ton (t) of gold and 288 oz/t of silver over 4.6 feet.

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Brazil Revises Policy on Renca

The Brazilian government will publish a new decree regulating the dissolution of the National Reserve of Copper and Associate Minerals (known by its Portuguese acronym Renca) to clarify country’s commitment to protecting the environment. It will regulate mineral exploration in areas with no protected areas, indigenous lands or border strips, and was published in an extra edition of Brazil’s Federal Official Gazette (the Diário Oficial da União, or DOU).

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Mine Life is Extended to 2028 at Iamgold’s Rosebel Gold Mine

Iamgold has reported an updated reserve estimate for its Rosebel gold mine in Suriname that will extend mine life to at least 2028. Attributable proven and probable reserves have increased 80% since the end of 2016 to 3.5 million ounces (oz), as of June 30.

Over the same period, Rosebel’s measured and indicated resources, inclusive of reserves, increased by 55% to 8.9 million oz, and its inferred resources increased by 322% to 2.5 million oz. Average reserve grade remains unchanged at 1 gram per metric ton of gold, but now includes dilution.

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Trek Planning Restart of Aurizona Gold Mine

Trek Mining has awarded the Engineering, Procurement, Construction and Management (EPCM) contract for redevelopment of its currently shuttered Aurizona mine in northeast Brazil to Ausenco Engineering Canada. Based on a recently completed feasibility study, the refurbished and upgraded Aurizona plant is planned to produce an average of 136,000 ounces per year (oz/y) of gold over a 6.5-year mine life, with year-end 2018 targeted for the first gold pour.

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Recent Changes to the Mining Framework in Brazil

By Affonso A. Barros da Cunha

In 2013, former Brazilian President Dilma Rousseff announced a bill that would deeply modify the Brazilian mining legal framework and revoke the much-outdated Mining Code of 1967. Despite this attempt to modernize the sector, Brazilian Congress did not take further steps and the issue remained untouched for years, barred by the turmoil of Rousseff’s impeachment and other scandals that paralyzed Congress and prevented it from voting on the bill.

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Regional News - Latin America August 2017

Guatemalan Lower Court Issues Ruling on Escobal Mining License

The Supreme Court of Guatemala has issued a provisional decision with respect to an action brought by the anti-mining organization, CALAS, against Guatemala’s Ministry of Energy and Mines (MEM), alleging that MEM violated the Xinca Indigenous people’s right of consultation in advance of granting the Escobal mining license to Tahoe Resources’ Guatemalan subsidiary, Minera San Rafael. The provisional decision suspends the Escobal mining license of Minera San Rafael while the action is being reviewed by the court, even though no Xinca representative or community is currently participating in the CALAS lawsuit against MEM.

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Spence Mine Expansion Approved

The Chilean environmental authority has approved the expansion of the Spence copper mine, which would amount to an investment of about $2.5 billion. The execution decision, however, will have to wait until August, according to El Mercurio. The new expansion includes the construction of a concentrator plant to increase production and extend the life of the deposit about 20 years. The Committee on Environmental Assessment (CEA) of Antofagasta decided unanimously to approve the BHP initiative. Environmental approval of Spence’s expansion could pave the way for its execution.

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Nyrstar Completes Coricancha Mine Sale

Nyrstar NV has successfully completed the sale of its Coricancha mine in Peru to Great Panther Silver Ltd., a primary silver mining and exploration company listed on the Toronto Stock Exchange, for a total cash consideration of $100,000-plus earn-out consideration of up to $10 million. Under the earn-out, Nyrstar will be paid 15% of the free cash-flow generated by the Coricancha mine during the five-year period after which the Coricancha mine is cumulative free cash-flow positive from closing of the transaction.

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Regional News - Latin America July 2017

Construction Well Under Way at Fruta del Norte in Ecuador

Lundin Gold has reported that construction of its Fruta del Norte underground gold project in southeast Ecuador is well under way. The mine development contractor mobilized to the site in April, and work on the mine portals began on May 1. Construction of mine development support facilities by Lundin began later in the month.
Fruta del Norte is one of the largest and highest-grade undeveloped gold projects in the world. Probable reserves currently stand at 16.8 million metric tons (mt) at a grade of 9.16 grams/mt for 4.94 million ounces (oz) of contained gold. Gold production is forecast to exceed 300,000 oz per year (oz/y) for more than 15 years at average life-of-mine total cash costs of $561/oz and all-in sustaining cash costs of $609/oz.

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State-owned Company is Created in Nicaragua

In June, the Nicaraguan National Assembly (parliament) approved the creation of the Nicaraguan Mining Co. (Eniminas), which will be in charge of the exploration and exploitation of mining resources. Eniminas will be a decentralized public company of the state under the rectory of the Ministry of Energy and Mines, and will be subject to the Special Law on the Exploration and Exploitation of Mines (2001), explained the official Deputy Jenny Martinez, in the plenary.

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Goldcorp Completes JV With Barrick

Goldcorp announced the completion of a previous transaction resulting in the formation of a 50/50 joint venture with Barrick Gold Corp. in the mining district of Maricunga, northern Chile. Under the terms of that transaction and offer for the acquisition of Exeter Resource Corp., Goldcorp and Barrick will jointly control more than 20,000 hectares of mining property within the Maricunga District with the Caspiche and Cerro Casale orebodies. Together, both deposits, contain more than 3,500 tons of mineral resources. Also, Goldcorp will spend at least $60 million in a two-year period, unless the deferred payment obligation worth $250 million is satisfied.

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Cerro Grande Files for Bankruptcy in Chile

Cerro Grande Mining Corp. announced the closure of its Pimenton mine and that it has entered into voluntary bankruptcy, effective June 1. On the advice of its Chilean lawyers, the directors and management of Compania Minera Pimenton and the Board of Directors of Cerro Grande Mining Corp. decided to go into voluntary bankruptcy versus waiting for its creditors to place Pimenton into involuntary bankruptcy.

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Silver Standard Forms JV With Golden Arrow

Silver Standard Resources has formed the Puna Operations joint venture (JV) with Golden Arrow Resources Corp. to develop the Chinchillas project. The JV will be comprised of Silver Standard’s Pirquitas property and Golden Arrow’s Chinchillas property. Silver Standard owns 75% and Golden Arrow owns 25% of the venture. Silver Standard is the joint venture operator and has made an option exercise payment of $13 million to Golden Arrow. This transaction was previously announced in March 31.

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Tahoe Challenges Anti-mining NGO in Guatemala

Tahoe Resources reported this week that an anti-mining organization, CALAS, has filed a claim against Guatemala’s Ministry of Energy and Mines (MEM) alleging it violated the Xinca indigenous people’s right of consultation in advance of granting the Escobal mining license to Tahoe’s Guatemalan subsidiary, Minera San Rafael.

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Regional News - Latin America June 2017

Pizarro: Codelco to Keep its Foot on the Brake

Nelson Pizarro, CEO, Corporación Nacional del Cobre (Codelco), delivered a speech at the Exponor conference in Antofagasta, Chile, on May 16. Those who are familiar with Pizarro know that he does not mince words. He is a respected engineer, who managed many Chilean mining operations during his 50-year career before taking the helm at Codelco in July 2014 in his 70s. During his tenure as CEO of the world’s leading copper producer, he has seen copper prices and head grades steadily decline, while costs continued to increase.

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Continental Gold Garners Backing for Buriticá Project in Colombia

Continental Gold announced sales of company common shares to Newmont Mining and RK Mine Finance Master Fund I (Red Kite) having a combined value of $136 million. Continental will use the funds to advance its underground Buriticá gold project in Antioquia department, northwest Colombia, where formal construction is scheduled to begin before year-end 2017.

The Newmont transaction is valued at $109 million and will give Newmont an approximate 19.9% interest in Continental. In addition, the companies will form a strategic alliance to evaluate opportunities to partner on exploration of Continental’s other properties in Colombia.

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