Toronto-based Minera Rayrock (TSE) is the latest Canadian company to produce copper in Chile.
The Ivan mine, 40 km northeast of Antofagasta, is operating at about 50% capacity and is expected to reach its annual production rate of 990,000 kg (22 million lb.) of copper cathode by late October.
The project consists of 85 sq. km. of exploitation claims, which host three deposits (the Ivan, Zar and Emperatriz), and 97 sq. km. of exploration claims. Copper will be mined using a combination of open-pit and underground methods, and Minera plans to use bacteria-assisted sulphuric acid technology to leach the metal from oxide and sulphide ores. The solutions will be combined at the electrowinning stage to produce a cathode of high purity.
The copper deposits are hosted in Jurassic-aged volcanics. Mineralization is often structurally controlled, lying either within steeply dipping fault breccia zones or in horizontal “mantos” deposits.
Total minable reserves at the three deposits are 4.6 million tonnes averaging 2.5% copper, indicating a minable reserve life of 10 years.
The Ivan mine consists of high-grade copper sulphide mineralization, as well as a brecciated copper oxide cap. Oxide ores are currently being mined via open-pit methods, and underground development for the mining of sulphide ores will be completed before year-end.
Open-pit reserves at Ivan total 311,800 tonnes of oxide ore averaging 1.4% copper. Underground reserves total 934,700 tonnes of sulphide ore averaging 4.6% copper and 937,000 tonnes of oxide ore averaging 1.7%
copper.
The Zar and Emperatriz deposits will be mined strictly via open pit. Reserves are 1.9 million tonnes averaging 2.1% oxide ore and 471,600 tonnes averaging 1.8% oxide ore, respectively.
Capital costs are expected to be US$31 million, and working capital is forecast as US$28.9 million.
Cash operating costs are expected to average US55-60 cents per lb., though the company thinks these potentially could be lowered. Moreover, it believes profits from the mine could be higher than expected, as a result of the higher-than-anticipated copper price and the hedging program. The feasibility study assumed a copper price of US90 cents per lb., and the company has hedged about 70% of 1995’s anticipated production using forward sales and call options. The forward sales average is US99 cents per lb. net of costs, thereby guaranteeing a floor price for the year’s production. As well, call options will bring additional revenue if copper prices exceed US$1.10 per lb.
Elsewhere in Chile, at the Sierra Valenzuela copper property, three new zones of mineralization have been discovered. This raises to 13 the total known mineralized zones, each averaging 1-2.5% copper.
Minera is preparing to carry out additional exploration and reserve definition drilling at Sierra Valenzuela.
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