MINING IN MEXICO — Exall seeks partners at Santo Tomas

Having completed a prefeasibility study on its Santo Tomas copper porphyry project in Sinaloa state, Exall Resources (TSE) is seeking partners to assist in development.

“We’re currently having discussions with several senior mining companies and end-users who are interested in participating in the project on an equity basis,” President Stephen Roman tells The Northern Miner.

He adds that Santo Tomas could evolve into one of Mexico’s largest mining development projects.

The prefeasibility study (carried out by Bateman Engineering, Mintec and Mountain States R&D) initially envisioned a 60,000-tonne-per-day operation that would produce, on an annual basis, 139,000 tonnes (306 million lb.) copper, 2.15 million grams (69,000 oz.) gold and 71.5 million grams (2.3 million oz.) silver.

The daily mining rate could eventually be increased to 120,000 tonnes, with financing available from cash flow. Ore would be mined via open pit, with initial production coming from the North area — one of two deposits outlined. Based on 14,881 metres of drilling and a 0.2% cutoff, proven and probable reserves in the North area are estimated to be 428.8 million tonnes grading 0.368% copper, 0.057 grams gold and 1.87 grams silver per tonne. The stripping ratio is about 1.4-to-1, and production costs (including smelting and refining) are projected at US66 cents per lb.

In the South area, reserves stand at 567.7 million tonnes grading 0.405% copper.

Both areas could be mined as one pit, but additional drilling is required to confirm the continuity of the mineralization. In both areas, the deposit is open at depth and along strike.

Test work has shown that more than 90% of the copper, gold and silver can be recovered by conventional milling and that a concentrate containing 28% copper can be produced. High recoveries were also obtained with a bacterial vat leaching process known as BRISA. A solvent extraction-electrowinning circuit would follow this process.

The concentrate will be shipped to other facilities for smelting and refining. Excess smelter capacity exists in the U.S., Mexico, and several Asian countries.

Capital costs for a 60,000-tonne-per-day operation are estimated at US$318 million. The Sinaloa government says it will help finance roads, powerlines, communication systems and other necessary infrastructure. The cost of such work is expected to exceed US$25 million.

Elsewhere in Mexico, Exall’s joint-venture agreement with American Barrick Resources (TSE) on the Triunfo gold property, on the southern tip of the Baja Peninsula, has been terminated.

The property was acquired from the government (as part of its privatization of national reserves) and adjoins ground being developed by Echo Bay Mines (TSE) and Baja Gold (TSE).

The 4,850-hectare property contains a series of intrusive rocks with gold-bearing veins, porphyries, tailings dumps and placers. High-grade veins reportedly contain values of up to 6 grams gold and 328 grams silver in oxides, plus 3.5 grams gold, 213 grams silver, 2.4% lead and 1.2% zinc in sulphide material. The government estimates reserves as being 11.3 million tonnes grading 2 to 4 grams gold.

According to Roman, several parties have expressed an interest in the property, following Barrick’s decision not to proceed with exploration. Near Hermosillo, the company has dropped its Rio Yaqui placer gold project, following completion of a testing program that yielded uneconomic results. Other groups have shown an interest in using Exall’s processing plant, and the company is assessing joint-venture proposals on two placer projects in Sonora state.