Farallon Mining, which operates the G-9 polymetallic mine on its Campo Morado property in Guerrero state, Mexico, agreed in mid-November to a friendly takeover offer from Belgium-based lead and zinc producer Nyrstar. The offer values Farallon at about C$409 million and requires approval from Farallon shareholders.
The Campo Morado property encompasses 12,000 ha over six mining concessions about 160 km south-southwest of Mexico City. Farallon achieved commercial production at the high-grade zinc-copper-lead-gold-silver G-9 deposit in April 2009. In addition to the G-9 mine, four additional deposits (Reforma, El Largo, El Rey and Naranjo) have been delineated on the Campo Morado property.
In announcing its offer for Farallon, Nyrstar said it intends to ramp-up mine production at G-9 to 2,500 mt/d by the end of 2012, representing about 70,000 mt/y of zinc in concentrate, 8,000 mt/y of copper in concentrate, 7,000 mt/y of lead in concentrate, 3 million oz/y of silver, and 35,000 oz/y of gold.
Farallon discovered the G-9 deposit in 2005 and utilized a “parallel track” development strategy by foregoing a formal feasibility study and continuing with advanced exploration in parallel with initial development of the mine. As a result the company was able to achieve commercial production less than four years after discovery of the deposit. Farallon believes current estimated total resources, including all five deposits, would support a mine life of more than 10 years. However, Nyrstar believes there is significant additional exploration potential at the G-9 and surrounding deposits, as demonstrated by Farallon’s recent announcement of a newly discovered zinc-rich polymetallic zone at G-9.