Infrastructure makes up for Andacollo’s low grade

The old maxim about finding new mines near old ones has been taken to the extreme by Placer Dome (TSE).

The Andacollo copper project, 50 km from this picturesque coastal town, not only is near, but virtually surrounds existing and former small-scale mining operations. An old open pit is within the bounds of the property. The project is well situated geographically. It’s close to a seaport and at an altitude that won’t take your breath away because of oxygen deficiency. (This project should not be confused with Dayton Development’s Andacollo gold project, which borders Placer’s copper play of the same name.) Unlike Placer’s La Coipa, a high-altitude mine in the Chilean Andes — jointly owned with TVX Gold (TSE) — Andacollo (pronounced Andacoyo) is on an existing power grid, close to two towns, with both a railroad nearby and a potential workforce that has mining experience.

“Those are the advantages that can save us a lot of money,” said Placer President Tony Petrina, who was on a swing through the area after the official opening of La Coipa. Project geologists briefed him on the project and he and Sandy Laird, Placer’s chief mine developer, along with The Northern Miner, toured several potential surface plant and tailings areas. While infrastructure is a big plus for this property, the grade is not. Relative to the Chilean average of about 1%, Andacollo’s indicated grade of 0.6% copper is low.

“By Chilean standards, yes, it is low grade,” Petrina said. “But I also think there’s a good chance the entire resource has not been identified.” At the time of the tour, 10 drills were probing the orebody: nine of them diamond drills, the tenth a reverse circulation drill. About 16,000 metres of a budgeted 21-22,000 metres had been drilled.

The drill program had four objectives: to further define the deposit on 100-metre centres, extract a 27-tonne bulk sample, provide geological data for reserves and confirm the grade through the supergene and hypogene material.

Reserves in the past were quoted at 249 million tonnes averaging 0.62% copper, with low-grade gold values. The grade estimate hasn’t changed, but there is also low-grade gold that might be recovered metallurgically with the copper.

The size is estimated to be at least 260 million tonnes and drilling has traced the deposit 200-300 metres below surface. The average is 250 metres. “We’re beginning to think that’s the depth,” said Peter Kowalczyk, Placer’s chief geophysicist.

By early next year, Placer should have a geological model prepared and a reserve and grade figure worked out. It faces a July, 1992, deadline for a completed feasibility study.

To extend its option beyond that point without a go-ahead on development will result in Placer shelling out $5 million to partner Empresa Nacional de Mineria (Enami). In the event of development, Enami will be the 20% partner. It would not collect its share of profits until after payback of capital costs.