Metminco holds an interest in a portfolio of gold, copper and other base metal projects that are located within well-constrained metallogenic belts associated with the Andean Cordillera in Colombia, Peru and Chile.
In Colombia, the Company is completing a feasibility study on its 100% owned Miraflores gold project where the Company plans to produce 50,000 ounces of gold per annum for an initial mine life of 9 years. The Company’s Colombian assets include the Dosquebradas, Tesorito and Chuscal targets located near the Miraflores Project, which present significant upside potential.
Figure 1: Location of the Quinchia Gold Portfolio and surrounding operating mines.
In June 2016, Metminco completed the purchase of Miraflores Compania Minera SAS, a Colombian company, from RMB Resources Australia Pty Ltd. Miraflores Compania Minera owns 100% of the Quinchia Gold Portfolio which includes the Mirafores Gold Project.
The Miraflores Project has Measured and Indicated Mineral Resources of 9.27mt at 2.82g/t Au and 2.77g/t Ag (840,000 oz Au and 825,000 oz Ag) and Inferred Resources of 0.5mt at 2.36g/t Au and 3.64g/t Ag at a cut-off grade of 1.20 g/t Au. The resources are based on 25,884 meters of drilling in 73 diamond drill holes and 236 meters of underground channel samples. This includes 3,624m in 10 holes carried out by AngloGold Ashanti and B2Gold in 2006-2007. These resources have been reported in accordance with JORC Code (2012 Edition).
The Dosquebradas deposit has Inferred Mineral Resources of 0.98m oz Au at a 0.20g/t Au cut-off.
Drilling at the Tesorito Project has identified a mineralised porphyry system with gold, silver, copper and molybdenum present in drilling.
The Company's Peruvian copper project, Los Calatos, is located in southern Peru near, and in a similar geological setting to three large operating open pit copper-molybdenum mines, namely, Cerro Verde, Cuajone and Toquepala In 2016, the Company concluded an agreement with CD Capital Resources Fund III whereby CD Capital will invest US$45 million in the project to earn a 70% interest and deliver a feasibility study.
In January 2013, the Company released a mineral resource update for Los Calatos (Figure 2) based on the drilling results of four phases of drilling (Phase 1: 6,385m; Phase 2: 9,100m; Phase 3: 35,897m and Phase 4: 65,677m). This was in addition to the prior drilling conducted by Phelps Dodge and Barrick Gold Corporation (8,317m), total 125,376 metres of drilling (135 drill holes).
This was superceded by a further mineral resource estimate (February 2013) in support of a Mining Scoping Study completed by NCL Ingenieria y Construccion Ltda (NCL) on a preferred mining scenario comprising an open pit operation followed by an underground bulk mining operation.
Figure 2: Location of Los Calatos and surrounding operating mines.
In August 2013, RungePincockMinarco (RPM) completed a Mine Production Study on the preferred mining scenario (Optimised L3_Model), which culminated in a revised mineral resource estimate of 493 million tonnes at a Cu grade of 0.38% and Mo grade of 0.023% (using a 0.15% CuEq cut-off) for those resources that are amenable to open pit mining to vertical depth of 700 metres below surface, and 926 million tonnes at a grade of 0.51% Cu and 0.022% Mo (using a 0.35% CuEq cut-off) for those resources that are amenable to underground bulk mining below this depth.
The Company completed a detailed re-logging program of the Los Calatos diamond drill core in early 2015 aimed at better constraining, and quantifying, the high-grade Cu and Mo zones developed within the Los Calatos Porphyry Complex, which was followed by the completion of a detailed geological model and revised mineral resource estimate. SRK Consulting (Chile) S.A. completed the mineral resource estimate in accordance with the guidelines of the JORC Code (2012 Edition) in June 2015, which totals 352 million tonnes at 0.76% Cu and 318 ppm at a 0.50% Cu cut-off grade, inclusive of all mineral resource categories.
With the completion of a new 3D Block Model in support of the mineral resource estimate, RPM were requested to complete a Strategic Mining Study on the Los Calatos deposit, using as its reference base the updated 3D Block Model. A key scope in this regard was to evaluate the project as a high grade, low tonnage, operation that could deliver approximately 50,000 tonnes of copper in concentrate per annum at a milling rate of 6.0 to 6.5 Mtpa. This work was completed in August 2015, following the evaluation of three case studies.
In October 2016 the Company concluded an agreement with CD Capital Resources Fund III, whereby CD Capital will invest US$45 million towards the completion of a feasibility study for Los Calatos, and in so doing will earn a 70% interest in the project.
In Chile, the Company maintains its Mollacas, Loica and Vallecillo projects on a care and maintenance basis. The Mollacas and Vallecillo (gold-zinc) projects have mineral resources classified in accordance with the JORC Code (2004 Edition).
Figure 3: Location of Metminco's projects in Chile.
In July 2012, the Company announced an updated mineral resource estimate for the Mollacas Project of 15.5 million tonnes at a Cu grade of 0.51% (using a 0.2% Cu cut-off grade), which is amenable to leaching (Copper Leach Project). The total contained leachable copper is 79,111 tonnes, of which 61,650 tonnes is soluble. Following the conclusion of additional metallurgical testwork, as well as revised operating and capital cost estimates, the Company updated a prior Scoping Study (completed by SRK Consulting [Chile] S.A. in 2008) in March 2014, the results of which support robust economics for the project as an open pit, heap leach, solvent extraction - electrowinning operation. Given these encouraging results, it was disappointing that in late March 2014, the IV Region Court of Appeal overturned a 2011 judgement by the First Court of Ovalle which had granted the Company the right to mine the Mollacas deposit. The Company is continuing to assess avenues for the development of the project.
The in-fill drill program completed at the Vallecillo Project (La Colorada deposit) in 2012 has, in conjunction with the prior drilling results, formed the basis of the current geological model for the La Colorada deposit. In reviewing the geological model, and the associated style of mineralisation, it became clear that further refinement of the model was required, which necessitated the sampling of previously un-sampled zones, and additional geological analysis of the drill core. In October 2012 SRK Consulting (Chile) S.A. completed a further mineral resource estimate comprising 8.86 million tonnes at a Au grade of 0.80g/t, Ag grade of 9.94g/t, Zn grade of 1.01%, Cu grade of 0.07% and Pb grade of 0.32% (using a 0.2g/t Au cut-off). A Preliminary Economic Assessment of the project in 2013 indicated that additional mineral resources need to be identified to develop an economically viable mining operation.
Metminco's other Chilean project, namely the Loica Project, is regarded as an early stage exploration project, where limited exploration work has served to identify anomalous occurrences of copper and molybdenum, that have yet to be assessed by follow-up geophysical and drilling programs.