Overview -

Keywords   Peru   copper   open pit

The Cerro Corona copper-gold mine is located in the highest part of the Western Cordillera in the Andes of northern Peru at an elevation of 3960 m, 90 kilometers by road north of the district capital of Cajamarca.

Production commenced in July, 2008, with first concentrate shipped in January, 2009. The copper-gold concentrate is produced through conventional open-pit mining and extraction of a copper-gold flotation concentrate which is trucked to the Port of Salaverry for shipment to smelters in Asia and Europe.

Cerro Corona is a single open-pit producing approximately 6.2 million tons per annum of ore at a life of mine strip ratio of 0.58, for a total of approximately 91 million tonnes of ore mined over a 16-year life, at an average grade of 1.0 gram per tonne of gold and 0.53% copper.

The mine employs approximately 320 people. Over its 16-year mine life, 3.0 million ounces of gold and 1,061 million pounds of copper in concentrate will be mined at Cerro Corona. Average yearly life of mine production is estimated at 375,000 AuEq oz, or 140,000 oz gold and 25,000t copper.

Gold Fields Limited is the majority owner (92% voting interest; 80.7% economic interest) of Sociedad Minera La Cima SA, which owns the Cerro Corona Mine. Gold Fields interest in Peru is held through Gold Fields Corona (BVI) Limited (100%), its wholly owned subsidiary. Sociedad Minera Corona S.A., a private Peruvian company, owns the remaining interest in Sociedad Minera La Cima SA.

The mine was developed over a three year period at a cost of US$540 million and began production in 2008. Full production commenced in December, 2008.

Ownership Summary  Name: Gold Fields Limited    Interest: 80.7%    Note: 80.7% economic interest; 92% voting interest; remaining ownership held by Sociedad Minera Corona S.A. Reference: 13 Mar 2009

Location - Cerro Corona is located approximately four kilometers west of the town of Hualgayoc (pop. approx. 2,000) at an elevation of approximately 3,960 m. Hualgayoc is 30 km southwest of Bambamarca, the provincial capital, and 80 km away from Cajamarca (pop. approx. 135,000), Department of Cajamarca.

Location Summary Nearest Landmark: CAJAMARCA Distance from Landmark: 60km Direction from Landmark: NORTH Latitude: 6 deg 46 min S Longitude: 78 deg 37 min W Satellite Image: <click to view>

Access to the Cerro Corona project from Cajamarca is by means of an all-weather road to the Yanacocha Mine (45 km), followed by approximately 45 km of a relatively poor quality gravel road that continues on to the village of Hualgayoc and the town of Bambamarca.

The environmental conditions at Cerro Corona are strongly influenced by its high altitude. The median annual temperature is 8°C, with frequent frosts. Annual rainfall is approximately1200 mm/year. There are two distinct seasons, with dry winters (April through September) and wet summers (October through March). The mine operates year-round.

Property - Cerro Corona lies within the Hualgayoc District which has seen significant production of silver, lead, zinc, gold and copper since the Spanish discovered the area in the 1700s. The operating Yanacocha mine is on the road to Cerro Corona. Early mining concentrated on placer deposits and oxidized surface veins. The veins at Cerro Jesus have reportedly produced more than 50 million oz of silver.

Reserves Summary Name: Cerro Corona Commodity: copper and gold Class: Proven + Probable Tonnage: 94.1 Mt Grade: 0.5 % Cu and 1.0 g/t Au  Reference: June 30, 2008

The Bureau de Recherches Geologiques Minieres (BRGM) discovered the porphyry-style mineralization at Cerro Corona during systematic exploration of the area in 1979. The Cerro Corona project is covered by a group of 33 mining claims, which total about 2,027 hectares.

The Cerro Corona deposit is a copper-gold mineralized sub-vertical cylindrical-shaped Tertiary diorite intrusive hosted in broadly folded Cretaceous and Jurassic limestone, marls, and sediments. The upper portion of the deposit is oxidized and has low copper grades. Below the oxide ore, secondary copper mineralization is present in a supergene zone. A mixed or transition ore zone of variable thickness is present between the oxide and supergene zones. Primary copper mineralogy and gold are present below the supergene zone as hypogene ore. Pyrite is present in both the supergene and hypogene ores. Pervasive alteration of the porphyry has led to the formation of extensive clays in parts of the deposit.

Deposit Summary Deposit Type: Porphyry Primary Commodity: copper and gold

Reserves in June 2008 consisted of 94.1 million tonnes averaging 1.0 g/t Au and 0.5% Cu for 3.0 Moz Au and 1,061 million pounds Cu (based on US$650/oz gold and US$1.75/lb copper. Construction at Cerro Corona concluded in late April 2008.

Operation - Cerro Corona is an open-pit mine operating at a capacity of 7,000 tpd. The mine strip ratio is estimated at 0.58 for the life-of-mine. In 2008, 12,368 kt (49:51 waste/ore) of material were mined. By December, 2008 full production capacity was attained.

The mining fleet at start up consisted of one CAT 994 Loader and a Terex RH-120 Shovel which load six CAT 785 trucks, four Komatsu 330M's. An ancillary fleet of Caterpillar machinery includes one D8 and one D9 dozers, two 140 Graders, three 988s and one 330 Excavator. Drilling is done with two Ingersoll Rand DM45s and one Pantera Sandvick for pre-splitting. The mine is operated under a 5-year contract with Peruvian company Minera San Martin.

Mine Production Summary  Mine - Cerro Corona    Capacity: 7,000 t/d    Rate: 7,000 t/d Reference: June 2008

Process - Following crushing, the dominantly sulphide copper-gold ore is treated through a flotation process at a rated capacity of 17,000 tpd or 6.2 million tonnes per year producing a copper concentrate of approximately 25% copper and 40 g/t gold for custom smelting at third party facilities in Japan, Korea, and Europe. Concentrate is transported by truck to the Port of Salaverry, a road distance of 403 km.

Since no oxide material is processed, a leach pad is not required, helping the mine reach the goal of zero discharge. The Cerro Corona Project has been limited in size as much for environmental reasons as economic in that by mining less than 90 million tonnes of ore, all waste dumps, water, tailings and the plant site will be contained within a single watershed which is centered just north of the historic (SMC) La Carolina mill and camp site and about two kilometres west of the ultimate open-pit (approximately 600m x 750m) at Cerro Corona. It is possible that the oxide material (7.8 Mt ore) could be processed off-site under a toll treatment agreement or a cyanide leach plant would have to be built on-site. No such plan currently exists.

Processing Summary  Facility - Cerro Corona    Capacity: 17,000 t/d    Rate: 17,000 t/d  Product    Commodity: copper and gold    Quantity: 375,000 AuEq oz    Cost: US$270/oz AuEq     Note: Production and Costs are projected for 2009 Reference: June 2008

The tailings management facility (TMF), a major construction project on site, captures water allowing the operation to continue through the dry season. In 2008, the mining fleet sourced materials from three rock quarries within the mine area for the TMF embankment, before overburden removal and mining of ore began in April. TMF construction was to continue into the future, Phase 1 was completed in August 2008.

Environment and Community - Environmental Impact Assessments (EIA) had been granted for all stages of Cerro Corona, including construction, mining, and closing and operations at the port facilities without much delay.

During the construction phase approximately 28% of the 3,000 person workforce was sourced from local communities. With mining underway, contractor opportunities and plans are in place to ensure that local suppliers are able to continue their business relationships with Cerro Corona.

The mine buys from local suppliers as much as possible. Currently about 80 local suppliers sell their products to the mine and every effort is made through meetings and site visits to make locals businesses aware of opportunities to sell their products and services.

Gold Fields integrates community issues into Cerro Corona's operational plans to ensure ways of maximising positive operational impacts within the local communities.