Santo Domingo

Overview

The Santo Domingo project copper-iron-gold project is located 50 km west of the city of El Salvador in Region III, Chile.

Mining for copper, gold, and iron has been ongoing in this area since early in the 19th century. The project area has a relatively long history of small-scale mining and prospecting.

The initial Candelaria Project land package was assembled by BHP in 2002. Far West Mining gained 100% interest in the property from BHP which still keeps a 2% NSR. Far West Mining was 100% acquired by Capstone mining in 2011. The project is expected to be fully-funded through a long-term strategic partnership with KORES who purchased 30% of the project from Capstone and acquired an 11% ownership in Capstone for US$372 million. In addition, KORES will arrange for debt financing for 65% of the capital costs of the project.

The project is strategically located near key infrastructure (highway, rail, power, port, smelter and airport) at low elevation (1,000 metres) in an established mining district with several significant copper and iron mining and smelting operations.

A 2011 prefeasibility study indicated that the deposit could be economically mined through open pit mining methods over a 18 years period and would be producing 144 million pounds of copper, 4.1 million tonnes per year.

Copper and magnetite concentrate are to be pumped down a 70 km pipeline to a port facility. Seawater would be also pumped to the mine site on a separate pipeline to be used as process water.

Location

The Santo Domingo Project is located 50 kilometres west of Codelco's El Salvador copper mine, and 130 kilometres north
northeast of Copiapo in Region III, Chile, near the town of Diego de Almagro. Elevation at the site ranges from 1,000 to 1,280 metres above sea level, with relatively gentle topographic relief.

Access to the mine site is 6 km to the south of Diego de Almagro on C-17. Access to the project is 1 kilometre off the paved highway C-17 from Diego de Almagro to Copiapó. Regional infrastructure is good and highways connect the site to the main regional towns and cities. Regularly scheduled air services are available between Santiago and El Salvador and the Atacama airport located northwest of Copiapo. The project is 60 kilometres from the pacific coast, providing seawater to the site and access to deep water port facilities.

The Santo Domingo property is located in the Atacama Desert, one of the driest regions on earth. The climate is arid and the weather is generally clear and warm in all seasons and poses no limitations on field activities.

Geology and Mineralization

The project was initiated in 2002 when the former owner and BHP Billiton formed a strategic alliance to explore for Iron-Oxide-Copper-Gold (IOCG) deposits in northern Chile's IOCG belt. The Santo Domingo deposit was discovered in 2005 using BHP's proprietary Falcon system.

The Santo Domingo Project comprises four deposits: Santo Domingo Sur, Iris, Iris Norte and Estrellita.

The IOCG belt stretches over a length of almost 1,200 kilometres from just north of Santiago in the south, to the city of Antofagasta in the north along the coastal cordillera of Chile. The belt is one of the most prospective IOCG provinces in the world and hosts numerous
large copper deposits including Candelaria operated by Freeport-McMoRan (470Mt at 0.95% Cu) and Manto Verde operated by Anglo American (350Mt at 0.75% Cu).

The Chilean IOCG belt has traditionally been under explored and the exploration potential for IOCG deposits remains high. Large parts of the belt are under cover similar to Santo Domingo and Capstone intends to explore its properties in the belt for additional discoveries.

The Santo Domingo project currently comprises of the following deposits: Santo Domingo Sur (SDS), Iris, (currently grouped together as SDS/IRIS), and Iris Norte. 

In the SDS deposit, copper mineralization occurs in a sequence of iron oxide mantos within a tuffaceous package between andesitic flows. Drilling has identified a 150 to 500 m thick, copper-bearing, specularite-magnetite sequence covering an area of approximately 1,300 m by 800 m. 

The Iris deposit is approximately 500 m wide, with a strike length of 1,600 m. The deposit consists of iron oxide mantos and breccias along a north-northwest-striking fault zone. Mineralization occurs close to surface at the southern end and plunges gently towards the north. 

Santo Domingo's open pit mineable probable reserves stood at 418.0Mt grading 0.04 g/t gold and 0.32% copper for 580,000 oz gold and 2,930Mlbs copper. (2010)

Mining & Operation 

The mining sequence, which mines higher grade material early on in the schedule, begins with Santo Domingo Sur. Mining of the Santo Domingo Sur Pit will be followed by Iris, with Iris Norte mined last in the sequence.

A total of 418Mt ore  and 1,277Mt waste would be mined at the Santo Domingo project for a strip ratio of 3.1.

The proposed plant processing rate of 70 ktpd was used to estimate the mining equipment fleet required. The fleet has an estimated maximum capacity of 300 ktpd total material. 

Mining equipment consists of six Crawler-Mounted, Rotary Tri-Cone, 311mm Dia. Drill; one Crawler-Mounted, Rotary Tri-Cone, 115mm Dia. Drill; four Diesel, 26-cu-m Front Shovel; one Diesel 25-cu-m Wheel Loader; twenty-nine 220-t class Haul Truck; six D10-class Track
Dozer; three 834H-class Rubber-tired Dozer; five 16M-class Grader; and, two 90t class (20,00 gal.) Water Trucks. 

The 311 mm diameter drill will perform the majority of the production drilling in the mine, with the smaller 115 mm drill used for secondary blasting requirements. The main loading and haulage fleet consists of 220 t haul trucks, which are loaded primarily with the diesel front shovels or the large wheel loader, depending on pit conditions. As pit conditions dictate, the track dozers are used to rip and push material to the excavators, as well as maintaining the waste dumps. 

Waste rock from the various open pits at Santo Domingo will be deposited in engineered waste rock facilities (“WRF”) adjacent to each of the deposits. In addition, a portion of waste rock from Iris Norte is proposed to be backfilled into the mined out Iris pit.

Processing

The mine is expected to produce nominally 250,000 tonnes of copper concentrate and 4,000,000 tonnes of magnetite concentrate per year. The life-of-mine (LOM) is projected to be 18 years.  

The concentrator will use a conventional processing flowsheet and industry standard equipment. Concentrator operation will be monitored using a control system from a centrally located control room. Sampling and stream assay monitoring will be via an automated system linked to the control system. 

The process plant and associated service facilities will process ROM ore delivered to the primary crusher to produce separate copper and magnetite concentrates and tailings. The proposed process encompasses crushing and grinding of the ROM ore, copper rougher flotation, regrinding and cleaner flotation, magnetite rougher magnetic recovery on copper rougher tailings, magnetic rougher concentrate regrind, and cleaner magnetic separation. 

Concentrates will be thickened and stored on site prior to being pumped down a concentrate pipeline to the port for dewatering and shipping to third-party smelters. 

The magnetic separator tailings will be combined with cleaner scavenger flotation tailings for thickening before placement in the TSF. 

Process equipment includes: Primary gyratory crusher; a 22 MW SAG mill, 11.58 m diameter (38 foot) with 6.6 m EGL (21.5 foot); a 750 kW cone crusher pebble crusher; two 12 MW Ball mills per grinding train, 7.32 m diameter (24 foot) with 10.97 m EGL (35.7 foot); six 200  m3 forced air tank flotation cells; four, 38 m3 trough-shaped flotation cells; 20 m diameter high-rate thickener; ten 3.6 m long rougher magnetic separators; a single 6 MW mill, 6.1 m diameter and 9.75 m EGL, in closed circuit with hydrocyclones; six 3.6 m long, three-stage cleaner magnetic separators; a 60 m diameter high-rate thickener; copper and magnetite concentrate filtration at the port. A 70km concentrate pipe and a 70 km seawater pipeline would also be required – specifications for the steel pipe are API 5L X 65 12.5 for the concentrate pipe and a 24'' pipe for water.

A number of plant buildings will be required for operation and maintenance of the plant. These include the administration office, laboratory, plant workshop, warehouse, reagent stores, guardhouse, plant control room, and services.

High-voltage transmission will be achieved using a 220 kV double-circuit overhead line from Diego de Almagro. The high voltage power line will feed a 220/13.8 kV transformer yard at the project main substation.

The PFS is based on the port facility being located approximately 74 km west of the Santo Domingo project. Both the concentrate and seawater pipelines will run together in a pipeline corridor along the north side of the C-57 road and Route 5.

The port terminal will be required to serve vessels with the following geometry to a maximum LOA of 250 m and maximum draught of 18.28 m.

The port facility will receive magnetite and copper concentrate by pipeline and will operate 24 hours per day, seven days per week. The magnetite and copper concentrate will be handled at an open stockyard and an enclosed storage building, respectively.

Mine life was estimated at 18 years.

Seismic zone maps of South America indicate that the project area is likely to have high seismicity and the site is considered part of Zone 3 (shores) according to the Chilean National Design Code Nch2369, with a peak ground acceleration of 0.4 g. 

A pipeline will bring seawater from the coast, approximately 74 kilometres from the project.

Environment & Community

The land and territory investigations regarding the project's current footprint, indicate there would be no impact on natural parks, biodiversity conservation priority sites, or indigenous development land in the Atacama Region.