La Coipa cash machine’ closest mine to heaven

As is customary in Latin America, a padre offered the benediction at the recent official inauguration of the expanded La Coipa mine, 140 km from here, in the Chilean Andes. He blessed the plant itself and the workers, “the first capital of a company.” A few corporate types in the audience might have sent silent prayers aloft on the prospects for the gold price.

But even with gold at US$360 per oz, La Coipa II, the biggest precious metal producer in South America, should do well for joint owners TVX Gold (TSE) and Placer Dome (TSE). (The first La Coipa mine/plant wasn’t even a tenth the size of the new 15,000-tonne-per-day plant.)

Calculated from current gold prices, payback on the project-financed US$225-million expansion is expected in about 4.5 years, said Ian Telfer, TVX vice-president. “Then it becomes a cash machine,” added TVX President Martin Robinson.

At its new production rate, the open pit mine should annually produce 200,000 oz. (6,220 kg) gold and 14-16 million oz. (435,442-497,648 kg) silver, roughly the current revenue equivalent of another 150,000 oz. gold. Mine life is 12 years. Operator Placer Dome has fixed proven and probable open pit reserves at 68 million tons (61.8 million tonnes) grading 0.04 oz. gold and 2.4 oz. silver per ton. Cash costs are US$175 per oz. of gold produced. Adding non-cash charges, such as debt costs and depreciation, raises the figure to $256 per oz.

The padre’s efforts aside, La Coipa is about as close to heaven as any mine will ever get. And the air is thin at 4,000 metres. (An ambulance and attendants trailed the tour, oxygen bottles at the ready. Only a few guests teetered to the van for help.)

Workers, of course, become acclimatized. For example, mine manager Robert Gallagher, a marathon runner, jogs regularly at the mine site. Trucks, jeeps and other diesel-powered vehicles are altitude-tuned. But even with this and turbo chargers, a loss of power is unavoidable.

La Coipa’s mill is an impressive structure over-designed to withstand earth tremors. Full-blown quakes are rare. All the pieces comprising the flow sheet are new, not used. “It is designed for 15,000 and we have run it up to 18,000 tonnes,” Gallagher told The Northern Miner.

The key components of the flow sheet are a primary gyratory crusher, a semi-autogenous grinding mill (SAG), two ball mills, a leach circuit, and a Merrill-Crowe circuit (because of the high silver values).

The tailings are noteworthy, said Robinson, because the system’s 12 horizontal filters remove 85% of tailings moisture. “It is the biggest dry tailings plant in the Americas,” he said. Moisture-free tailings are more stable in this tremor-prone area. As well, recycling is wise because water is precious at that altitude.

Even with recycling, a piped-in water system cost $15 million. A power line connecting La Coipa to the main electrical grid added another $15 million. La Coipa ore comes from the Ladera and Farellon deposits. A third deposit, Coipa Norte, may be developed in the future.

The ore deposits, in the northern Chilean Tertiary volcanic belt, are epithermal in origin. All known reserves are in oxidized zones. The joint venture has a narrow, 22-km-long land position running nearly parallel to a portion of the altered region called the Maricunga belt. Potential for new deposits is considered good.

Olav Svela is the editor of The Northern Miner Magazine.