Last year, the plant at El Valle ran through 649,142 tonnes of ore with an average head grade of 6.5 grams gold per tonne. A year earlier, the plant processed 723,588 tonnes running 4.6 grams to produce 97,016 oz. gold. Recovery rates between the two periods climbed to 91.2% from 89.7%.
The company ended the year on a high note with record fourth-quarter production of 34,543 oz., nearly 18% more than a year earlier.
In June and July, El Valle suffered a hiccup, encountering complex ore with higher-than-normal levels of impurities in the Boinas East pit, which reduced recovery rates while increasing processing costs for the treatment of the copper concentrates. About 100,000 tonnes of ore running 7-8 grams gold per tonne and up to 3% copper were stockpiled and will be blended with lower-grade ore for processing in the first half of 2002.
Mining in the Boinas East pit was completed on schedule in early February 2002. During 2001, Rio extended its development and exploration ramp to 693 metres and completed a ventilation raise below the Boinas East pit in preparation for underground drilling this year.
Waste removal at the El Valle pit is continuing at an accelerated pace in preparation for further mining of the main portion of the high-grade Charnela zone, which is to begin in March 2002.
At the Carles Mine, 10 km north of El Valle, 112,000 tonnes of ore averaging 4.8 grams gold were mined from the North pit. The material was then transported to El Valle.
With the Charnela deposit expected to come on-stream in March, Rio expects production this year to reach 150,000 oz. at a cash cost of US$160 per oz. Capital expenditures for the year are pegged at US$7.5 million, mainly for exploration and underground development at El Valle, and completion of the feasibility study at the Aguablanca nickel/copper/ platinum-group-metals project in southwestern Spain.
The study at Aguablanca is expected to wrap up in June, with a production decision to follow. About two-thirds of a 10,000-metre program of infill core drilling has been completed, closing the hole spacing to 25 metres. If approved, Rio plans to fast-track the project with an eye toward beginning production as soon as mid-2003.
Aguablanca hosts a resource of 30 million tonnes grading 0.7% nickel, 0.5% copper, 0.3 gram platinum, 0.3 gram palladium and 0.3 gram gold. A prefeasibility study on a 17-million-tonne deposit grading 0.73% nickel, 0.51% copper and 0.6 gram platinum group metals at a 3.5:1 stripping ratio indicates a net present value, discounted at 10%, of US$59 million. The estimate is based on current metal prices. Capital costs are pegged at US$60 million, and the deposit is amenable to open-pit mining.
The company also holds more than 6,200 sq. km covering a series of gabbro intrusions along a belt that extends through southern Spain and Portugal. Many of the intrusions are geologically similar to Aguablanca, with coincident geophysical and soil anomalies.
Meanwhile, an investment group that includes Rio Narcea Chairman Chris von Christierson has purchased 12.8 million of the company’s shares, to take a 19.8% equity stake in the company. The shares were purchased from Hullas del Conto Cortes and Lignitos de Meirama at 65 apiece. The two companies formerly held 19.9% and 14.9% interests, respectively, of Rio Narcea.
Concurrently, Fernando Chinchurreta Bollain, Fernando Herranz Villafruela and John Hough have resigned as directors. The resignations leave the board with eight members: von Christierson, Alberto Lavandeira, Stanley Beck, Anthony Bloom, Elias Velasco Garcia, John Hick, Fernando Pastor Gonzalez and Hugh Snyder.
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