El Tesoro mine aims for spring startup

Beginning in May, London-listed Antofagasta expects to produce 75,000 tonnes of cathode copper per year at the newly completed El Tesoro heap-leach mine. Antofagasta holds a 61% interest in the US$296-million Chilean operation, which is expected to boost the company’s overall copper production to more than 400,000 tonnes this year.

Last year, Antofagasta got a major production boost from an even bigger project: Las Pelambres in central Chile. Built at a capital cost of US$1.36 billion, the new open-pit mine produced 298,000 tonnes of copper-in-concentrate during its first full year of operation. It also reduced the company’s average cash costs by 29% to US39 per lb. copper from US54 in 2000.

Antofagasta holds a 60% in Los Pelambres, which is targeted to produce 350,000 tonnes of copper-in-concentrate this year at a cash cost of US37 per lb.

Exploration efforts are focused on Peru and Chile, where a total of US$5.4 million was spent last year. The two main targets are the Esperanza copper-gold porphyry deposit, near El Tesoro in Chile, and the Magistral polymetallic project, in Peru.

Esperanza contains a geological resource of 10 million tonnes of oxides averaging 0.62% copper, plus 150 million tonnes of sulphides averaging 0.81% copper and 0.46 gram gold per tonne. Additional drilling will attempt to expand the resource at Esperanza and test for extensions to the neighboring Telegrafo property.

At the 30%-owned Magistral project, a joint venture with Inca Pacific (IP-V), Antofagasta will spend US$2.95 million this year on a third phase of drilling. The target is a copper-molybdenum porphyry-skarn deposit that is geologically similar to the massive Antamina zinc-copper project, also in Peru. The latter is being developed by a consortium of majors.

Previous work at Magistral was focused on an area measuring 1,200 metres long, 125 metres wide and 350 metres in depth, resulting in an inferred resource of 190 million tonnes averaging 0.83% copper and 0.062% molybdenum.

This year’s program will include a 14,000-metre drill program, metallurgical tests, and geotechnical and engineering studies. Once this work is completed, Antofagasta will have boosted its stake in the project to 51%, which can be increased to 65% by carrying out a feasibility study.