Alamo Dorado

Overview

Acquired by Pan American Silver in February 2003, the Alamo Dorado deposit found in Mexico is the only primary silver discovery made in that country in the last decade. Construction of the open-pit mine project was completed in November 2006 and commercial production commenced on April 1, 2007. Total construction costs for the project were approximately US$81.5 million, within 6% of feasibility estimates.

With total proven and probable reserves of 12.4 million tonnes at an average grade of 112 g/tonne silver and 0.33 g/tonne gold, and measured and indicated resources of 3.1 million tonnes at an average grade of 74 g/tonne silver and .28 g/tonne gold, Alamo Dorado had an expected life of 8 years.

Production from Alamo Dorado generates approximately 75% of its revenue from silver with the remainder from gold (approximately 10,000 ounces annually). The mine has an expected life of 9.1 year for the open pits and 8 years for the milling circuit.  

Location

The Alamo Dorado deposit is located in northern Mexico in the state of Sonora, 60 kilometers south-southeast of the town of Alamos, population 7,000 and approximately 370 kilometers southeast of the state capital of Hermosillo, population 650,000

Geology and Mineralization

The Alamo Dorado project comprises an epithermal silver-gold deposit located in the southeast corner of the State of Sonora in Mexico. It consists of two contiguous exploitation concessions, the 509 hectare Alamo Ocho Concession and the 4,865 hectare Alamo Dorado Concession; and five exploration concessions covering 6,014 hectares.

Geologically, the project is located in the Sierra Madre OccidentalRange, a late Cretaceous to Tertiary age volcanic province that extends for hundreds of kilometers through northwestern Mexico. The volcanics overlie a basement of Paleozoic and Mesozoic metamorphic rocks that have been locally intruded by various Cretaceous intrusions. The deposit lies within Jurassic metavolcanic rocks, the youngest member of a Precambrian to Mesozoic metamorphic sequence of gneisses, metasediments and metavolcanics.

The silver-gold mineralization at Alamo Dorado is predominantly fracture- controlled and associated with moderate to intense pervasive silification. About 50 percent of the silver mineralization is related to strongly fractured rhyodacites and about 30 and 10 percent in the rhyolites and dacites, respectively. The main silver mineral at Alamo Dorado appears to be chlorargyrite which is a silver mineral derived from a silver chloride complex occurring along with the quartzpyrite minerals filling the fractures. The gold mineralization occurs as free, micron-size particles and/or in the crystal lattices of micro-crystalline pyrite.  

Mining & Operation

The deposit is mined with a two-phase pit: a five-year starter pit from years 1 through 4 and a seven-year ultimate pit from years 2 through 8.

Mining is carried out via conventional surface methods, using a 7.5 cubic meter hydraulic shovel, front end loader and 60 ton mechanical rock trucks for the principal earthmoving. The plant is designed for 4000 tonnes per day of ore milled, and the average strip ratio in the current mine plan of 1.65 to 1 waste to ore ratio requires an average earthmoving capacity requirement of 10,000 to 12,600 tonnes per day. The equipment fleet selected for Alamo Dorado can comfortably produce at these levels.

The initial pit design will develop into the deeper, higher grade reserves as rapidly as is practically possible, and the second phase of development will balancing the material movements with the first phase and will expand the pit to its final high wall and depth.

The configuration of the ore deposit is such that the mining operation startup proceeded one year ahead of the milling operation in order to expose sufficient reserves to be able to maintain consistent ore production from the outset of milling operations.  

As of 2012, mining was expected to be completed in 2013 with processing completed in 2016. The company was considering a reserve
increase with a Phase 3 mine layback.

Processing

Run-of-mine (ROM) ore is delivered to the primary 42-inch gyratory crusher dump pocket by end-dump trucks during a single 12-hour shift each day. A front-end loader may be utilized to provide feed to the crusher dump pocket during mine down times. The crusher operates with a closed side setting (CSS) of 102 mm, the smallest setting possible for the crusher. The size was chosen to provide a nominal SAG mill feed of minus 150 mm (F80 = 102 mm). A hydraulic, pedestal mounted rock breaker is installed at the dump pocket to reduce oversize boulders in the ROM feed. Water sprays are used to control dust levels in the primary crushing circuit (at the dump pocket, feeder discharge and stockpile conveyor discharge).

SAG mill feed is reclaimed from the stockpile using one of two variable speed belt feeders. The feeders discharge onto the SAG mill feed conveyor. A dry dust collection system has been installed to control dust emissions in the reclaim tunnel area. A 50-tonne capacity pebble lime silo and the dust collector baghouse will straddle the SAG mill feed conveyor where it daylights leaving the coarse ore stockpile. A weigh scale on the SAG mill feed conveyor will provide signals for adjusting the ore and lime feeders and water addition to the SAG mill.

The SAG mill operates in closed circuit with a vibrating screen and a ball mill in closed circuit with hydrocyclones. The 6.1 m diameter by 2.4 m SAG mill (1,340 kW) is fixed speed and capable of handling up to a 15% v/v ball charge. Ground slurry from the SAG mill is screened on a single deck 1.5 m by 4.3 m unit fitted with polyurethane panels with a nominal 10 mm opening. Undersize from the screen gravity flows to the cyclone feed sump. The cyclone overflow slurry gravity flows to an elevated 30 m diameter thickener, the overflow from which is pumped to the first mechanically agitated cyanidation leach tank. There are seven tanks which together provide 96 hours of retention time for precious metal dissolution. The tailings from this process are filtered via horizontal vacuum belt filters ahead of reporting to the precious metals recovery circuit.

Filtrate from the tailings filter area is pumped to the electrowinning area which reduces the silver and gold concentration in solution to 1.0 ppm and 0.05 ppm, respectively. Electrowinning is performed in a series of 24 cells. The precious metals are removed from the cells as a "sludge" and are filtered in a small plate and frame press. The cake from the press is manually "dumped" into wheeled collection tubs. From the tubs, the cell sludge is shoveled into trays and placed in the retort which removes the mercury and water.

The dried, retorted cell sludge is mixed with fluxes (borax, soda ash, silica and niter) and subsequently smelted in a diesel-fired crucible furnace. The doré (estimated 990 total fine - Au+Ag) is then shipped by armored truck to an offsite refiner for further , third party processing. The slag is remelted to recover metal prills and the barren slag returned to the grinding circuit. 

Environment & Community

Pan American has estimated the present value of reclamation costs for the Alamo Dorado property at December 31, 2011 to be approximately $3.4 million.