High hopes & hard work at Veladero

Everyone at the Veladero project is working flat-out preparing the mine and plant for production in the fourth quarter of this year. It helps to know that something good will come of the effort: there are 12.8 million oz of gold and 200.3 million oz of silver in the reserves, and annual output will be approximately 700,000 oz Au at a total cash cost of US$200/oz for the first three years of operation.

Veladero was one of the properties affected when Barrick Gold Inc. merged with Homestake Mining in 2001. The merger allowed the consolidation of ownership where previously Barrick held 40% and Homestake 60% of rights on the property. The deposit is located high in the Andes Mountains, in the Argentine province of San Juan.

Veladero is reached after a rigorous six-hour drive from the city of San Juan. When the author visited the property in February, we rode in a top-of-the-line SUV capably operated by Veladero general manager George Bee. One benefit of a long drive is the opportunity to talk about Barrick’s sustainable development efforts. (See separate article on page 8.)

There are a number of programs in Iglesia and Jachal, two communities 150 km from the mine, to support the development of local business and production capacity by providing financial assistance, expert consultation and training to entrepreneurs and farmers. Barrick also has programs that focus on health, education and infrastructure development that are part of the comprehensive, community-driven assistance to local residents.

After a short night and breakfast at the Pismanta Hotel, we continued up the road, an effort that includes crossing the 5,000-m-high Paso Conconta. Then it is downhill, however, only about 400 m, level with the highest bench of the mine. The camp is 11 km from the mine and farther down the mountainside at 3,850 m, in keeping with Barrick’s wish that its employees sleep below 4,000 m.

Barrick widened and improved approximately 160 km of road from the village of Tudcum to Veladero at a cost of US$29 million. Along the way the company has relocated several vegas, little patches of marshland beside the streams or natural springs in the area. To preserve these native features and replace impacted habitat, some water from streams and rivers was diverted to create new habitat and the plant species collected. When road improvements were complete, the vegetation was replaced. The local wildlife–guanacos (small llama-like animals), rheas (similar to ostriches), mountain geese and other birds, burros, goats and cows–seem undisturbed by the interruption.

Although a private undertaking, the road is open to the public until it reaches the frontier post manned by the national border guard 150 km from the mine. At the start of the private road is a warehouse–a 120-m by 50-m building that serves as a collection and staging point for the mine. The concept is rather like an offshore oil-drilling platform that has a shore-based terminal, explained Bee. By unloading at the warehouse, transport companies avoid the costs and dangers associated with extreme high-altitude trucking. And fewer buildings had to be erected at the higher elevation.

When we reached the Veladero gatehouse, the permanent camp for 550 people and the contractors’ accommodations (which almost 4,500 workers call home during construction) spread out at our feet. The permanent camp was still under construction when CMJ visited, but it already housed the same type of modern conveniences that are common in the best remote Canadian mining camps. Barrick employees work 12-hour shifts on a 14-days-in/14-days-out rotation.

Barrick has made a point to hire Veladero employees locally. The villages of Iglesia and Jachal supplied 23% and the province of San Juan 54% of the permanent workers. Most of the rest come from other areas of Argentina; only 4% of the employees are from outside the country.

The orebody

The Veladero deposit was discovered by Argentina Gold, and the first core recovered from the project returned partial results of 31 m grading 42.25 g/t Au and 42.61 g/t Ag. The early exploration was conducted by the junior company in a 60:40 joint venture with Barrick. The junior was later bought by Homestake Mining which in 2001 merged with Barrick. With each season, more mineralization was outlined, until at Dec. 31, 2004, proven and probable reserves stood at 359.71 million tonnes grading 1.1 g/t Au and 17.5 g/t Ag. Additional mineral resources of 19.78 million tonnes grading 0.72 g/t Au and 12.5 g/t Ag have also been identified.

The orebody consists of a gold-silver oxide deposit, hosted by a Miocene diatreme-dome complex. Mineralization occurs in silicified volcanic breccias at the core of the high sulphidation alteration, and is controlled by stratigraphy, structural trends and elevation. The mineralization in the deposit forms a broad, disseminated, 3-km-long blanket along a northwest-striking structural trend. The diatreme-dome complex has intruded along this trend and includes a massive, brecciated core of heterolithic vent facies tuffisite that transitions outward through a contact zone of clast-supported breccias into the volcanic sequence country rocks. A bedded tuff unit that represents fragments ejected from the central vent forms a ring that overlies portions of the vent facies and contact zone at the southern end of the deposit. Much of the deposit is covered by up to 150 m of colluvium.

The native gold is very finely disseminated and rarely visible, but is contained in rock that has a sponge-like surface quality making it ideal for leaching.

Mining the mountain

Senior mine engineer Zetti Gavelan explained the Veladero mining plan. It calls for the creation of two pits–Federico and Amable. The starter pit, Mario, lies within the Federico outline. The material from Mario is the first to be placed on the leach pad, and it has the advantage of not requiring any stripping. Mining there will be completed in November.

Mining will begin in September at the Amable pit because the ore grade in it is higher than average. Last February pre-stripping was well underway for the first of two mining phases. The top bench is at 4,550 m elevation, and subsequent benches are 15-m high with a 1.5-m subdrill extension. Each round of 75 blastholes was breaking 100,000 tonnes of waste by late February, and the orebody remained only 200 m farther down.

The goal is to begin mining Amable at a rate of 4 million tonnes/month and ramp it up to 6 million tonnes/month by the end of this year. Next year the rate will increase again to 7 million tonnes/month, or 85 million tonnes per year.

The Federico pit is designed in five phases. The first phase is the removal of the Mario material. The second phase will begin with delivery of Federico ore to the leach pad in 2008 as the Amable pit is phased out.

Once the conventional truck-and-shovel mining method was chosen, Barrick bought a fleet of new equipment. Three Liebherr 996 shovels with 36-m3 buckets were chosen. The first one became operational in July 2004. The initial truck fleet will include 18 Caterpillar 793 units rated at 240 tonnes. Each truck is outfitted with a purpose-built light-weight body, which increases its carrying capacity to 257 tonnes. There are also a pair of Cat 994D loaders with 19-m3 buckets for clean-up and lighter production work.

Barrick has three Ingersoll-Rand DMMII blasthole drills drilling 270-mm holes for pit development. But wanting more productivity, the company ordered two, larger Driltech D90s. The first was commissioned last February and the second in May.

The production equipment was supplied with maintenance and service contracts from the individual suppliers. Finning subsidiary Macrosa had about 150 people at the mine to look after the Cat trucks and loaders. Liebherr had about 40 or 50 for ser
vice after erecting and commissioning its shovels.

Blasting will vary between the two pits because the nature of the ore is slightly different. In the Amable pit, a 50/50 mixture of Anfo and heavy emulsion has been chosen because the rock is highly fractured. Blastholes are drilled on an 8-m by 8-m pattern and loaded to a factor of approximately 250 kJ/tonne. In the Federico pit, where ore is softer, blastholes are spaced 9-m by 9-m apart and Anfo loading is much less, about 150 kJ/tonne. In both pits, the blasts are initiated using a Dyno non-electric ignition system.

The current mining plan will keep Veladero producing gold until at least 2021. The property has additional mineralization not in the current plan. The Amable pit, for example, might be expanded. Plus there is the Cuarto Esquinas area, located between the two planned pits, which has not yet been fully explored.

Run-of-mine ore is trucked via 32-m-wide haul roads to the primary crusher, a Metso open circuit gyratory crusher with a nominal capacity of 36,000 tonnes/day. The ore is reduced to approximately 150 mm and conveyed to a storage dome. Coarse ore is conveyed from the storage dome to a pair of Metso MP2000 short head crushers that reduce the size to 31 mm. Trucks drive under the bin to be loaded and carry the ore to the leach pad.

Leaching and recovery

The concept of zero water discharge is taken very seriously at Veladero’s valley-fill heap leach. Before the state-of-the-art, leak-proof leach pad system was designed, Barrick geologists had a good look at what lies below the site. When they were satisfied there are no active faults that could potentially rupture the facility, they agreed the site of the multi-stage pad would be secure. There are over 1 million m3 of material in the dam, which is engineered to withstand a 10,000-year seismic and flood event.

From the top down the pad is built with every safeguard to prevent loss of the pregnant solution. On top a layer of ore up to 150-m thick can be stacked, and below the ore is a minimum 60-cm layer of specially crushed and placed ore that protects the primary liner. The primary liner is a 100-mil (2-mm) thick covering of linear low-density polyethylene (LLDP). Beneath it is a leak detection system within a 60-cm layer of 20-mm crushed stone. In this layer a network of tubing and collection pipes will direct any leaks to the lowest point under the pad. And under this stone layer is a secondary liner with an 80-mil thickness. Below the secondary liner is a 30-cm layer of conditioned, low-permeability soil that has been carefully graded.

Below the leach pad is a series of French drains and finger drains along the keel of the valley to collect runoff and groundwater. This liquid finds it way to a collection pond, which is tested and compared to information gathered during the baseline environmental study. If the water in this pond does not meet discharge standards, it is pumped back onto the pad. Downstream from the leach pad are a number of monitoring and recovery water wells.

Sodium cyanide solution will be introduced to the leach pad through a system of agricultural-style drip emitters that will be buried under a shallow layer of ore to protect them from freezing.

The level of saturation in the heap is controlled by a number of caissons–steel lined, 934-mm diameter vertical pipes that are 42-m long and installed down into the ore to the lowest point in the leach facility. When solution rises to a pre-set level in the caisson, it is automatically pumped to the processing plant. There is no separate pregnant solution pond, thus avoiding many worries about toxicity to the local birds and wildlife.

The backbone of the gold plant is a conventional 1,800-m3/hour Merrill-Crowe system. Pregnant solution is clarified first in a tank and then in membrane filters, which are Sparker filters made by Metpor Argentina using diatomaceous earth as a filter medium. Sludge from the filters will be returned to the leach pad, and clarified solution will be pumped to the deaeration tower. The addition of zinc dust causes metals (gold, silver and zinc) to precipate from solution. The precipate will be collected on plate filters in batches.

The precious-metals-containing cake will be placed in mercury retorts and heated for 24 hours. The mercury vapour must be condensed, collected and sold as a byproduct. Barrick will not sell the mercury locally, where it might be used by artisanal miners.

Borax, silica and fluxes are added to the mercury-free material, and the mixture can then be placed in an electric arc retort at a temperature of at least 2,000C. The molten metal will be poured into gold/silver dor bars, cleaned, stamped, sampled and placed in a vault until it is transported to a refinery.

Gold and silver recovery rates are expected to vary considerably depending on the ore type. The process is engineered to maximize gold recovery, which will average 76%. Type I ore yields the best rates, which can be within a few points either side of 90%. Type II ore is grind-sensitive and lower recovery rates are expected, as low as the mid-50% range in tests. Silver recovery is hampered by the fact that this metal is associated with jarosite. Neither ore type has acid-generating potential as sulphides are locked within silica.

A valuable investment

Barrick’s investment in the Veladero mine can be measured in dollars and sense.

The capital cost estimate for Veladero has risen to US$540 million from US$475 million. Not only have the costs of labour, explosives and structural steel gone up and exchange rates fluctuated, the new estimate includes several changes in the scope of the project. Provisions have been made for extra drilling to convert resources to reserves, for studies on bringing down the per-unit cost of production, and for future capital projects.

As for the sense, Barrick is using common sense to ensure the people of the region have an economy that will sustain future generations. The company is also demonstrating its business sense to ensure a long and profitable future for itself.

In the words of manager George Bee: “Stay tuned. We’re not done by any stretch of the imagination.”