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Native Cooper at Expansion Hole CdG

ENGINEERING & METALLURGY

Engineering - Preliminary Pit Optimization Studies

In 2007, Golder Associates generated a series of preliminary open pit optimization studies using Whittle Four-X software (see tables below) based on a 15Mtpa flotation circuit and representative costs for operations of a similar size and nature including mining costs of US$0.85/t, processing and general and administrative costs of US$6.70/t, plus post-concentrator costs.

Preliminary metallurgical recoveries were assumed at 85 per cent for copper and silver and 80 per cent for gold for the first case and 85 per cent for copper and 80 per cent for gold and silver for the second case. These assumed values were established from indicative results from metallurgical testing completed to date, which included 42 bulk flotation tests producing a rougher concentrate, as well as the reported results of comparable operations.First pass slope angles of 45 degrees and a mining recovery factor of 95 per cent were assumed, and no allowance was made for mining dilution other than that incorporated in the geological model.

 

Cerro del Gallo Deposit - Resources Contained within Optimized Pit Shell 

(Based on Au US$600/oz, Ag US$10.80/oz, Cu US$3.00/lb)

Category     Tonnes (M)    Au g/t    Ag g/t    Cu%    AuEq g/t     AuEq Moz
Measured            59              0.74         13        0.08         1.27              2.4
Indicated            173             0.25         15        0.12         0.96              5.3
 Inferred             28              0.21         14        0.12         0.90              0.8
   Total               261             0.36         14        0.11         1.02              8.5
                      3 Moz gold, 117 Moz silver and 632 Mlbs copper
Note: The gold equivalent grade was calculated as Au+(Ag/55.56)+(CuX3.64) and assumes metallurgical recoveries of 80% for gold, and 85% for copper and silver. The conceptual strip ratio is 0.57 and 89% of resources within pit shell are classified as Measured and Indicated.   

 

Cerro del Gallo Deposit - Resources Contained within Optimized Pit Shell 

(Based on Au US$500/oz, Ag US$9.00/oz, Cu US$1.50/lb)

Category     Tonnes (M)    Au g/t    Ag g/t    Cu%    AuEq g/t     AuEq Moz
Measured            54              0.76         14        0.08         1.18              2.0
Indicated             67              0.29         18        0.13         0.90              2.0
 Inferred              4               0.22         17        0.12         0.78              0.1
   Total               125             0.49         16        0.11         1.02              4.1
                       2 Moz gold, 64 Moz silver and 302 Mlbs copper
Note: The gold equivalent grade was calculated as Au+(Ag/55.56)+(CuX3.64) and assumes metallurgical recoveries of 80% for gold and silver, and 85% for copper. The conceptual strip ratio is 0.44 and 97% of resources within pit shell are classified as Measured and Indicated.  
 
 
Metallurgy
 

Metallurgical testing to date has focused on the investigation of comminution, rougher flotation and cyanide leaching flow sheet options utilizing material from the gold/silver zone. Metallurgical testing was carried out by SGS Lakefield Oretest Pty. Ltd. (“SGS”) in Perth Australia. A second phase of testing has also been completed at SGS utilizing copper zone material to evaluate both flow sheet options and comminution and flotation parameters to determine if pay metal recoveries can be improved and a saleable copper concentrate produced.

Initial metallurgical testing of Cerro del Gallo gold-rich material characterized the mineralisation’s response to crushing, grinding and recovery of pay metals in three different cyanide leaching flow sheets (whole ore cyanidation, gravity separation cyanidation and flotation cyanidation).

Metallurgical results indicate:

  • Grinding finer generally improves leach recovery
  • Gravity separation and cyanidation of products provides similar recovery to whole ore cyanidation process
  • Whole ore and independent treatment of a flotation concentrate and tail with cyanide also yields similar recovery
  • Flotation to a concentrate has the potential to significantly reduce the mass treated in the leach step and potentially a saleable copper concentrate could be produced.

Preliminary analysis of the variability tests indicates that weathered material yields lower gold, silver and copper recovery but does not impact negatively on the recovery of unweathered material when combined in a composite.