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GOLD PRODUCTION NEWS Restart Complete at Pimentn Mine in Chile

CHILE Toronto-based SOUTH AMERICAN GOLD AND COPPER CO. (SAGC) has started up operations at its Pimentn gold-focu...


CHILE Toronto-based SOUTH AMERICAN GOLD AND COPPER CO. (SAGC) has started up operations at its Pimentn gold-focused mine in central Chile’s Region V, said company president Stephen Houghton.

The underground mine, 3,500 metres up in the Andes Mountains, was mothballed in 1997. SAGC invested slightly less than US$5 million to renovate and modernize the mine and milling system, said Houghton. "We basically rebuilt and refurbished the plant and camp, installed water and sewerage systems, electrification, generators and ventilation," he noted.

The work started in mid-December and mining operations began last week, a couple of months behind the March startup date forecast in the due diligence study compiled by the Denver-based engineering firm PINCOCK ALLEN & HOLT last October. That report considered an initial production rate of 19,600 oz of gold, or 22,210 oz of gold-equivalent (including copper and silver credits) in the first year of production, ramping up to 41,100 oz/year of gold or 46,500 oz/year of gold-equivalent in the third year of operations through 2010.

SAGC had originally considered a 250 tonnes/day plant for Pimentn, but found that with "a very slight and inexpensive modification to the crusher," the operation could be expanded to 300 tonnes/day, Houghton added. As a result, production at Pimentn will be higher than originally forecast. Similarly, cash costs, originally estimated in the study at US$180/oz of gold (including copper credits, but not silver credits), will go down slightly thanks to higher throughput.

Pimentn will produce two products: a gold concentrate and a copper concentrate with gold and silver additions. The plant uses two cyclones and a Knelson concentrator to recover 62% of the gold by gravitational methods. Pimentn’s proven and probable reserves are less than 200,000 oz of gold-equivalent, but Houghton said this will be expanded shortly when known mineralized areas are upgraded. The mine’s Carmelita vein and three other vein systems that have been intercepted by a recently-made cross-cut are not included in the reserve estimate.

In addition, SAGC has concluded a diamond drill program and is finishing a geotechnical study on a breccia pipe on the Pimentn property, which would be developed as an open pit, Houghton said.

The Washington, D.C.-based OVERSEAS PRIVATE INVESTMENT CORP. (OPIC) agreed to lend SAGC a total of US$2.8 million in two tranches. On the formal start-up of operations at the mine, OPIC released the second tranche, worth US$1.6 million, SAGC said in a statement.

Pimentn is expected to provide SAGC with income to support further development of its Cal Norte and Catedral lime projects (also in Chile) and other gold prospects currently being reviewed by the company, Houghton said last October.


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