Overview
The El Morro copper-gold property covers 3,600 hectares located in the Municipality of Alto del Carmen, Huasco Province, Third Region of Atacama in northern Chile. The project is about 650km north of Santiago and some 80 km east of the city of Vallenar.
Silver mining began in earnest in the first part of the 19th century followed by copper mining in the coastal region during the second part of the same century.
Metallica Resources Inc (now New Gold Inc.) began exploration work in the area in late 1990s; in 2000 it joined forces with Noranda (now Xstrata). Goldcorp acquired XStrata's interest in 2010 through a transaction involving New Gold.
Three mineralized prospects have been identified to date but the only mineral deposit that had demonstrated an economic potential is La Fortuna which is located at 4,100 meters elevation and is part of the Atacama Desert region.
It contains proven and probable reserves of 6.7 million ounces of gold and 5.7 billion pounds of copper with an additional 2.2 million ounces of gold and 1.0 billion pounds of copper in the measured and indicated resource categories.
The El Morro Project is envisioned as an open pit mine supplying material for crushing and processing in a copper flotation mill producing a copper-gold concentrate. Production is planned for 90,000 tonnes per day of ore over an estimated 14 years mine life.
Concentrate will be transported by truck from the filter plant to the port at Huasco.
A seawater desalination plant located on the coast, 197 kilometers from the mine site, would offer the most reliable water supply over the lifetime of the mine operation.
Location
The project is located in the Municipality of Alto del Carmen, Huasco Province, Third Region of Atacama in northern Chile.
Chile is a Spanish speaking country located in South America on a narrow coastal strip sandwiched between the Pacific Ocean to the west and the Andes Mountains to the east.
The region was originally inhabited by the Diaguitas people whose economy was based on agriculture and livestock breeding. Kakan was their language and nowadays a few places still bear their original Kakan name - e.g. Antofagasta and Atacama.
The Spanish Diego de Almagro descended in the Copiapo valley in 1536. The city of Copiapo was established in 1744, and Vallenar followed in 1789. Silver was discovered south of Copiapo in 1832 by Juan Godoy. Mining of the copper rich veins of the coastal area began in the second part of the 19th century.
No significant mining has occurred on the property other than a small shaft which represents historic artisanal mining efforts directed toward exploiting high grade copper oxides.
Current access to the project is through the town of Vallenar, the nearest main town to the site. Vallenar is situated at kilometer 663 of the Pan-American Highway, north of Santiago. From Vallenar, the road access, at the current time, follows 72 kilometers of paved road to the east to Chanchoquin and then continues another 73 kilometers to the east-northeast via the Totoral gravel/dirt road. The site is approximately 15 kilometers from the Argentine border.
The La Fortuna site at 4,100 meters elevation is a high altitude Cordilleran desert, part of the Atacama Desert region, devoid of any significant plant life.
The proposed mine and plant site has a median yearly temperature of 25° C. During winter time, values around -1° C are reached, but extremes can reach -15°. Precipitation is less than 200mm a year and considering the altitude of the property most of the precipitation occurs as snow.
More recently, the economy of the region saw the take-off of agriculture in the valleys, especially grape farming and its resultant demand on local water resources.
Geology
The El Morro District sits at the center of a tectonic depression enclosed to the west by the west dipping Cazadero fault and, to the east by the east dipping Cantaritos fault.
The porphyry-style copper mineralization in the El Morro District is linked to a cluster of multiple porphyry intrusions emplaced syntectonically during the Eocene-Early Oligocene "Incaic" event, along an East-West to West-Northwest transfer or "tear fault corridor" which accommodated changes in the sense of displacement of large North South trending regional basement faults.
The El Morro group of properties consists of three separate zones of porphyry style copper-gold molybdenum mineralization within a contiguous boundary. The La Fortuna deposit is the only property of the three within the outlines of the El Morro holdings with measured and indicated resources.
The La Fortuna deposit is a typical copper-gold porphyry system consisting of multiple phases of similar composition intrusives, concentrated within a near vertical ovate cylinder of alteration and mineralization.
The porphyritic copper-bearing igneous rocks are intrusive into host volcanic and sedimentary rocks which have also been altered and mineralized with copper but to a much lesser degree, and the mineralization falls off dramatically with distance from the host intrusives. La Fortuna displays variable intensities of quartz veinlet swarms, breccia zones and rarely large vein zones. The bulk of mineralization is associated with intense vein stockworks of narrow veinlets.
At El Morro, mineralization is hosted by a sequence of epiclastic sandstones and conglomerates, occurring as primary and secondary copper sulfides plus associated gold in stockwork veins and disseminations. An intrusive source to the mineralization at El Morro has so far not been identified.
It contains proven and probable reserves of 6.7 million ounces of gold and 5.7 billion pounds of copper with an additional 2.2 million ounces of gold and 1.0 billion pounds of copper in the measured and indicated resource categories.
Mining & Operation
The El Morro Project is envisioned as an open pit mine supplying material for crushing and processing in a copper flotation mill producing a copper-gold concentrate.
Production is planned for 90,000 tonnes per day of ore. Mine life was estimated at 14 years.
The pit was divided into eleven design sectors with slope angles of 40° to 49°.
Slope depressurization is based on 200 m to 300 m long horizontal drain holes with 60m horizontal spacing every 30 m in elevation.
Typical annual production rates are a nominal 130 million tonnes of waste and 32 million tonnes of ore.
Processing
Primary Crushing and Grinding
The plant design is conventional for the copper industry using some of the largest processing machinery currently available. The process includes primary crushing in a 60-inch x 110-inch gyratory crusher followed by primary grinding in a 38-ft diameter x 21-ft long SAG mill discharging to two 27-ft diameter x 42.5-ft long ball mills operated in closed circuit with two 33-inch diameter cyclone clusters (14 cyclones per cluster) to achieve a final primary grind of 80 percent passing 130 microns. Pebbles from the SAG mill discharge are crushed in two MP-800 cone crushers and recycled back to the SAG mill feed. Lime is added during milling to achieve a flotation pH of 10.5.
Flotation
The ground slurry advances to the rougher flotation circuit, which consists of four lines of nine-200 m3 forced air tank cells. This is sufficient to provide the design rougher flotation retention time of nearly 32 minutes. The rougher concentrate, then advances to the regrind circuit which includes four tower mills, 1.119 kW each, and two cyclone clusters to ensure a regrind product of 80 percent passing 25 microns.
The concentrate from the second cleaner is pumped to the third cleaner which consists of four 4.5 m diameter columns with a residence time of 22 minutes to produce the final concentrate assaying 28 percent copper. The third cleaner tailing is recycled to the second cleaner feed.
Concentrate Thickening and Filtration
The final copper flotation concentrate is then thickened in two 39-meter diameter thickeners designed to increase the concentrate slurry density from 26 percent to 65 percent solids by weight. The thickener overflow serves as process makeup water.
Thickened copper concentrate is pumped to two agitated storage tanks that will provide a total of 36 hours of storage capacity in advance of the concentrate slurry pipeline that will transport thickened concentrate approximately 108 kilometers to the filter plant that is located at elevation 576 masl (close to Route 5). The pipeline feeds a 45 m diameter thickener and the underflow is filtered by two 120 m2 pressure filters to produce a concentrate filter cake with less than 9 percent moisture. Filtered concentrate will be conveyed to a 15,000-tonne live capacity enclosed concentrate storage area. Concentrate will be transported by truck from the filter plant to the port at Huasco.
Tailings Handling
Combined rougher and cleaner circuit tailings are directed to three 50 m diameter thickeners that produce an underflow with 45 percent solids after the addition of 25 g/t flocculent. The underflow is further thickened by the addition of 30 g/t of flocculent to 63 percent in four high density thickeners. The underflow is pumped to a tailings dam.
Fresh Water Supply
Fresh water required for the process plant will be supplied by a desalination plant located on the coast, 197 kilometers from the mine site. The desalination plant and pumping system is designed to process and pump 740 liters per second (including 15 percent design factor), which should be more than sufficient to meet the process makeup and fresh water requirements, which is estimated at 640 l/s.
Fresh water received from the desalination plant will be stored in two 49,000 m3 capacity ponds, which will provide almost 40 hours of process supply.
Electric power required for the project will be supplied by the Chilean central power grid from a new substation to be installed at Algarrobal located 50 kilometers north of the existing Maintencillo substation near Vallenar and 83 kilometers south of the Cardones substation near Copiapó. Two overhead transmission lines will distribute power from the Algarrobal substation to the El Morro mine site facilities.
