Vancouver — Junior producer
The mine is at the southern end of the so-called Santa Rosa Dome and is only one of 20 targets. Situated 3,900 metres above sea level in the Southern Inter-cordilleran belt of the Peruvian Andes and, the property is 550 km southeast of Lima.
For its first full year of commercial production (ended March 31, 2003), Santa Rosa produced 13,520 oz. gold at an average cash cost (including silver credits) of US$151.88 per oz. The total cost was US$196.88 per oz.
To the leach pad were sent 226,329 tonnes of ore averaging 2.65 grams gold per tonne over the past year. Andean also recycled 26,730 tonnes of previously leached ore averaging 1.59 grams gold per tonne and recovered 748 oz. gold at a cost of US$18.41 per oz.
The company sold 7,770 oz. gold during the fiscal year and incurred a loss of $1.49 million (or 6 per share) on revenue of $4.1 million. The loss in the previous year amounted to $1.2 million (6 per share) on revenue of $183,664. The presence of pervasive clays reduced gold recoveries and added to operating costs during the fiscal year. Despite the loss in the recent year, Andean managed to reduce its working capital deficit to $3.3 million from $6.5 million.
During the second quarter of the current calendar year, Santa Rosa produced 5,165 oz. gold at a cash cost of US$100.67 per oz. and a total cost of US$145.67 per oz.
At the end of March, the mine was operating at 2,000 tonnes per day. A new crusher had just been installed, which has a design capacity of 3,250 tonnes per day.
“We’ve got an aggressive expansion on for pit equipment,” says President John Huguet. “It’s all arriving at the end of this month and early next month. The capacity at the plant will be up at a hundred thousand tonnes per month for fresh ore and about thirty-six to forty-six thousand tonnes per month for recycled ore. Before the end of October, our leach pads will span sixty-seven thousand square metres, or more than seven-hundred thousand square feet. The expansion is going full-bore right now, and we’re utilizing the good weather to get it completed.”
Heavy El Nino rains during the first six months of 2003 hampered production and recoveries. Andean has been battling with the pervasive presence of clays in its ore but seems to have solved the problem. The clays in the Open Pit zone cause recovery problems on the leach pads since they compact easily and inhibit percolation of the leach solution. After trying a number of different treatment methods, Andean decided to isolate the clays completely from the other pit materials and treat the gold recovery as a separate process. Field tests indicated a 75% improvement in gold recoveries when clays were isolated from coarse mineralization.
The objective will be to maintain a highly disciplined leach-pad operation that will allow for the treatment of three ore types:
— coarse ore and fines at 3-inch minus mesh;
— clay ore and fines following agglomeration and curing on separate pads; and
— ore currently on the pads.
The current ore will have to be reprocessed and reformulated to separate and recover gold and silver from the contained clay ore. At the end of July, Andean estimated there was more than US$11 million in gross metal value sitting on the leach pads.
The company is installing a clay treatment plant, which has an initial daily capacity of 300 tonnes. Also, an agglomerated clays/fines circuit is being added to the crushing plant to isolate the clay material further. Startup of this new process is scheduled for 2004. Currently clays and fines are being transported to a clay stock pile. Laboratory tests of the clay material using an agitated leach system recovered more than 90% of the contained gold. Recycled production will likely yield a 50% recovery rate.
Meanwhile, Andean has expanded its crushing facilities so that it can now easily handle the 1.2-million-tonne-per-year permitted production rate. Additional leach pads are being constructed over 15,000 sq. metres, which will almost triple the pad area.
The company is in the midst of a 2-and-a-half-month stripping program designed to remove 400,000 tonnes of waste from the southern structure of the Santa Rosa mine. Based on the original drilling program and resource estimates, this should allow for up to 100,000 oz. gold over the next couple of years.
At the Carelo North and South zones, 500 metres north of the Open Pit zone, Andean will remove 120,000 tonnes of waste in preparation for mining.
Carelo North
Earlier this year, the company reported results from 78 percussion drill holes on the Carelo North zone. The holes were drilled to an average depth of 9.7 metres and averaged 4.97 grams gold per tonne. Highlights include 10.5 metres grading 9.7 gram gold per tonne, 10 metres averaging 9.13 grams gold, and 10 metres of 10.96 grams gold.
Most of the holes ended in mineralization. So far, the Carelo zone has been defined over an area measuring 300 by 200 metres and remains open to the north and east as well as at depth.
In September, subject to financing, Andean will begin a diamond drill program to define resources at the Carelo and Open Pit zones.
Earlier this year, the company inked a deal with
Also, Newmont is required to identify an inferred gold resource of at least 1 million oz. If it defines less than 1 million oz. but more than 500,000 oz., Newmont can earn a 49% participating interest. If less than 500,000 oz. but more than 250,000 oz. are identified, it can earn a 3% net smelter return royalty.
If Newmont earns a 51% controlling interest in the joint venture, the major becomes the operator. Also, at Andean’s discretion, Newmont would have a one-time option to earn an additional 9% undivided interest by spending US$3 million more over two years.
Andean retains full interest in 33 sq. km around the operating Santa Rosa mine for mine development and exploration. The area includes the Open Pit, North, Northeast and Carelo zones.
Included in the Newmont agreement is an option to acquire the Santa Rosa mine site outright. The major can do so if Andean has discontinued production for two years or more or if a feasibility study indicates that average quarterly cash flow to Andean (as a joint-venture participant) during the first three years of production is higher than the mine’s average cash flow during the four quarters that immediately precede any production from the joint venture.
Sinchao
Andean also holds the Sinchao gold property, which is in the Yanacocha-Hualgayoc mining district of northern Peru, about 640 km north of Lima and 30 km northwest of the Yanacocha mine.
The junior says that while it has been developing the Santa Rosa property it has not performed any exploration at Sinchao. The last technical report on the project, in 1998, recommended an exploration program costing US$3.5 million. The Sinchao property has been subjected to more than 8,000 metres of drilling, and Andean believes it has the potential to contain at least one multi-million-tonne bulk minable deposit.
Previous drilling identified four distinct styles of mineralization:
— copper-gold-zinc-silver skarn system;
— a copper-gold-silver mineralized fault and breccia zone;
— a high-sulphidation copper-gold epithermal mineralized zone; and
— a copper-gold-silver replacement manto-type massive sulphide.
Andean recently petitioned to increase the size of the Sinchao property by up to 4.4 sq. km, effectively doubling its current size.
Be the first to comment on "Andean aims for higher output at Santa Rosa"