South African miner Gold Fields (NYSE: GFI) has formally begun construction of the mining infrastructure for its Salares Norte project in northern Chile.
The company expects to complete the US$860 million project in late 2022, with first gold production in early 2023.
About 15% of the construction has already completed, Gold Fields said. That includes a mining camp for 1,800 people, related infrastructure and access roads.
Not mentioned in the company’s announcement was a delicate operation to remove critically endangered chinchillas, which were living on site. The rodent, hunted for centuries for their thick, soft pelt, is now only found in the wild in parts of Chile and are protected by law.
Gold Fields’ environmental license for the gold-silver project depended, partly, on finding a way to safely move the chinchillas.
The company said nearly 2,700 will be created during the peak of construction, but only 900 employees and contractors will stay on once the mine begins operations.
Local authorities welcomed the news, saying the project would be crucial for the region, where dozens of jobs have been lost in the past year due to the pandemic.
Salares Norte will process two million tonnes of ore per year for the production of doré gold once commissioned, over a 10-year mine life.
The asset hosts proven and probable reserves of 21.1 million tonnes grading 5.13 grams gold per tonne and 57.94 grams silver per tonne for 3.5 million oz. contained gold and 39.3 million ounces of silver.
Max Combes, director of the project, says Salares Norte seeks to employ sustainable technologies that reduce its environmental footprint. These include solar PV power and filtered tailings to optimize water use.
The announcement comes just a day after Gold Fields announced the appointment of former Anglo American Platinum (Amplats) boss, Chris Griffith, as its new chief executive officer.
Griffith will take the helm in April after current CEO Nick Holland retires, having spent 13 years leading the company.
Holland paid tribute to the Chilean team for managing to remain on schedule despite the considerable challenges linked to keeping employees and contractors safe from the impact of the covid-19 virus.
Discovered in 2011, Salares Norte is one of five gold projects set to begin operations in the South American nation over the next two years.
Chile’s gold production peaked in 2000 at 54.1 tonnes, data from the country’s copper commission, Cochilco, shows. The nation, the No.1 copper producer and second-largest lithium producer after Australia, currently ranks 16th among the world’s top gold producing nations, according to IndexMundi.com.
Other gold projects set to come online in Chile by 2023 are Kinross Gold’s (TSX: K; NYSE: KGC) La Coipa Restart, Yamana Gold’s (TSX: YRI; NYSE: AUY; LSE: AUY) El Peñón expansion, Rio2’s (TSXV: RIO; US-OTC: RIOFF) Fenix and Kingsgate Consolidated’s (ASX: KCN) Nueva Esperanza.
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