Canadian Mining Journal

Feature

Spence to Become Important Copper Producer

Rio Algom has another gem in northern Chile-the wholly-owned Spence deposit. Although a full feasibility study is not yet complete, Spence could produce 226,800 tonnes of copper annually beginning in ...


Rio Algom has another gem in northern Chile-the wholly-owned Spence deposit. Although a full feasibility study is not yet complete, Spence could produce 226,800 tonnes of copper annually beginning in 2004.

The discovery of the Spence deposit was the result of good, old-fashioned grassroots exploration. In 1992 Rio Algom’s Chilean exploration team began searching for another enriched porphyry copper deposit similar to Cerro Colorado. “The search spread out from the Cerro mine site and eventually expanded into Region II,” said Kelly O’Connor, Rio’s vice-president of exploration. The Spence site is northeast of Antofagasta in a previously untested area where the company was able to establish a large property position.

The first claims were staked at Spence in May 1995. Regional mapping suggested a major structural break and a suspected trend of intrusions. It was a likely target for geophysics and anomaly drilling. In the western part of the property where overburden was not too deep, Hole No.9 encountered visible copper oxides over two metres. Hole No.10 hit the leached cap over a very low grade portion of the deposit. Hole No.19, drilled using reverse circulation, returned ore grade copper values from the oxide zone and the supergene zone. Diamond drilling was begun to outline the mineralization, and the discovery was announced in January 1997. A resource estimate of 305 million tonnes at 1.1% Cu was made.

Early last year a decline was established to obtain metallurgical samples. In July 1999, Rio Algom announced a 33% increase in resources to 400 million tonnes grading 1% Cu. The deposit consists of 50 million tonnes of oxide ore at 1.4% Cu; 200 million tonnes of enriched sulphide ore at 1.3% Cu; and 150 million tonnes of primary sulphide ore at 0.6% Cu. The oxide portion of the ore is amenable to heap leaching, and the remainder can be treated by SAG milling and flotation.

A feasibility study is scheduled for this year. Plans so far call for a mining rate of 70,000 tonnes/day of ore. Sixty thousand tonnes of ore will be milled and floated daily at an estimated cash cost of US$0.56/lb and a copper recovery of 90%. The remaining 10,000 tonnes/day will be leached and the copper recovered through SX/EW means. Cash costs for the latter method are expected to be US$0.49/lb and recovery to be 80%.

The Spence deposit will require an investment of approximately US$1 billion, with construction starting in 2002. The timing of the project would be ideal if construction were done during the low part of the copper price cycle, when the cost of facilities and equipment are also expected to be low; and start-up could correspond with a rise in copper prices.


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