It has been more than a year since Barrick Gold (TSE) gained control of Lac Minerals and acquired that company’s considerable assets, including an 81.95% interest in the famed El Indio gold-silver-copper property, east of here.
At the time, skeptics wondered whether the deal was a good one for Barrick. But the company has since sold off some of its less profitable exploration properties and mines, including the Macassa gold mine in Kirkland Lake, Ont., and turned its attention to enhancing the performance of El Indio.
In 1995, Barrick carried out exploration and development work at El Indio, and at the nearby Tambo mine and Nevada project. And the company is already confident that El Indio has the potential to become its next Goldstrike. (During the 1980s, work carried out at the Goldstrike property in Nevada was essential in enabling Barrick to achieve the major-producer status that it enjoys today.)
On a recent visit to the property, nestled in the Chilean Andes, The Northern Miner learned that only the top 600 ft. of the deposit has been mined; it remains open at depth.
For the first nine months of 1995, El Indio produced 142,644 oz. gold and 55,352 million lb. copper at an operating cost of US$143 per oz. By year-end, El Indio is expected to have yielded 200,000 oz. gold and 85 million lb. copper. Reserves stand at 5.5 million oz.
Meanwhile at Tambo, gold production from the Wendy and Kimberly pits from the start of production in April through to the end of September totalled 63,391 oz. at an operating cost of US$241 per oz. By year-end, Barrick expects Tambo will have yielded 100,000 oz. Reserves there are estimated at 1.1 million oz.
In total, Tambo and Nevada host proven, probable and possible reserves of 8.8 million oz.
Combined, El Indio and Tambo will produce 345,000 oz. gold in 1995, up 58% from the previous year. Production in 1996 is expected to rise further as the daily capacity of the Indio mill is expanded to 5,000 from 3,000 tonnes. Barrick is projecting 360,000 oz. — a level not seen since 1983.
El Indio, which trends in a north-south direction and straddles the Chile-Argentina border, stretches about 100 miles in length and averages 5 miles in width.
The belt is underlain by granitic and granodioritic batholiths overlain by Tertiary-aged volcanics, and is thought to be representative of a large epithermal district.
Indio and Tambo lie within an extensive area of intensive, hydrothermal alteration. The property is also dominated by north-south-trending faults, as well as secondary northeast- and northwest-trending fracture systems. Using LANDSAT (satellite) imagery, Barrick geologists have delineated more than 30 prospective areas of hydrothermal alteration and faulting, many of which remain untested.
According to Barrick, there are three distinct mineralogical styles associated with the ores in the Indio-Tambo area. At El Indio, copper, gold and silver mineralization is associated with quartz veins, and with massive sulphide veins in the central zone.
While grades in the mine typically range up to 0.2 oz. per ton and 3%-5% copper, the mine does contain pockets of higher-grade mineralization. During its visit, The Northern Miner was taken to the 402 stope on the Indio Sur 3500 vein, which averaged 1.16 oz. gold and 4.37 oz. silver per ton and 2.5% copper.
Gold mineralization at the Tambo mine, 3 miles south of El Indio, is associated with silica-barite veins and breccia bodies. North of El Indio at Rio del Medio, quartz veins are more silver-rich, containing only minor amounts of gold.
Although knowledge of the mineral potential of South America dates back to pre-colonial times, exploration and development of the Indio area began in earnest only in the 1960s. During that decade, pirquineros (small-scale, independent miners) used burros and handtools to mine high-grade veins in the area.
El Indio was discovered in 1975 and placed into production in 1979 by its first owner, St. Joe Minerals. In the period between 1979 and 1982, St. Joe produced more than 750,000 oz. gold, with annual production starting at 90,000 oz. and peaking in the final year at about 360,000 oz.
Later in 1986, Australian-based Bond Gold, and later Lac Minerals, operated the mine. During this 8-year period, annual production ranged between 190,000 and 250,000 oz. Total production between 1979 and 1994 was about 3.6 million oz.
One of the problems previous owners had in exploring for and developing reserves at El Indio was that little attempt was made to understand the geology on a regional scale.
John Lill, president of Barrick’s Chilean subsidiary, explains: “El Indio was like an unwanted child. It kept being passed around from owner to owner, and exploration was completed sporadically only in order to replace mined-out reserves. Nobody really took the time to perceive the bigger picture.” When Barrick threw its hat into the ring and made a bid for Lac Minerals, it had a good idea of El Indio’s potential. At the time, it thought it could convert half of Lac’s 13-million-oz. resource into reserves. With work completed so far, Barrick expects to be able to convert all the resources into reserves.
Exploration and Development
While Barrick has spent its first year assessing the bigger picture, it has also initiated an aggressive exploration and development program, which will continue through 1997. This program is expected to extend the mine life of Indio to beyond 25 years.
Barrick is sinking a 2,000-ft internal shaft to gain access to potential ore at depth. The cost of doing so, and of establishing subsequent exploration drifts, is projected at US$37 million. The work should be concluded by the end of 1996.
Two-thirds of the space needed for the headframe has been excavated, and 545 ft. of the shaft have been reamed out to a diameter of 7 ft.
Drilling will be carried out on the downdip extensions of the Indio Sur 3500 and Inca Norte structures, which comprise the Indio vein. Additional drifts will be used to explore the neighboring Viento vein and Jalene discovery.
Barrick is also completing a US$20-million exploration program on early-stage targets in 1996. One of the more intriguing targets of this program is the potential extension and convergence of the Indio and Viento vein systems to the northeast.
Norman Brewster, manager of exploration, explains; “We’re very excited about the possibility of finding a good target there. If the zones do converge, and we think they do, it could host a large and rich breccia zone.” There is also potential to find discoveries similar to the Jalene, which was discovered in 1994. Jalene occurs in a favorable unit, termed the “friendly tuff,” which is covered by andesite flows. Drifting and drilling underneath the andesite cover may yield similar results.
In addition to the exploration and development, Barrick is proceeding with a feasibility study on its 80%-owned Nevada project.
Proven and probable reserves stand at 27.8 million tonnes averaging 0.071 oz. gold per ton, which is roughly equivalent to 1.9 million contained ounces. The mine could go into production as early as 1997.
Finally, Barrick has spent US$16.6 million upgrading the processing plant and US$21.7 million upgrading the roaster at El Indio, the objective being to render the mine more efficient and environmentally safe.