Vancouver — Copper production from Amerigo Resources’ (ARG-T, ARGOF-O) Minera Valle Central (MVC) operation in Chile will be curtailed after state copper company Codelco gave notice that it is restricting tailings flow downstream from the plant.
Codelco’s El Teniente operating arm cited environmental concerns stemming from both the volume of water in the tailings being discharged at its Caren impoundment reservoir and the structural condition of a bridge forming part of the launder. The restriction on MVC will last about four months.
As a result, Amerigo anticipates third-quarter production will fall about 20% below the 6.57 million lbs. (2,980 tonnes) copper and 203,548 lbs. molybdenum produced in the second quarter.
The launder transports tailings slurry from the El Teniente copper mine in the Andes of eastern Chile to the Caren reservoir, a distance of some 86 km west. MVC, located about 36 km west of El Teniente, reprocesses the tailings through a milling circuit to regrind it and then uses a flotation recovery circuit to extract the freshly liberated sulphide copper plus byproduct molybdenum.
Earlier this year, Amerigo was asked by Codelco to temporarily stop processing old tailings from the Colihues impoundment due to concerns with the condition of the launder. Located south of and adjacent to MVC, Colihues is a 3.7-sq.-km flooded impoundment used by Codelco for a decade (from 1977-87) as a tailings repository. It contains over 200 million tonnes of tailings with an estimated average grade of about 0.27% total copper — more than double that of the fresh tailings.
The company has built a separate pipeline system to allow for treatment of the Colihues tails at MVC and its return to the impoundment, mitigating its reliance on Codelco’s launder. Amerigo anticipates initially processing about 10,000 tonnes per day of Colihues tailings, once it has approval from Codelco.
Shares of Amerigo dropped almost 15% on the news to close down 32 at $1.90 apiece on trading volume of over 670,000. The stock trades in a 52-week range of $1.61-$3.18.
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