Rio Narcea opens El Valle mine

Centuries after gold was first found in the mist-shrouded hills of northern Spain, Emperor Augustus sent in seven legions comprising thousands of men to subdue local tribes and secure mines that eventually produced an estimated 7 million oz. of the yellow metal for the Roman Empire. Two millennia later, gold mining has returned to the Asturias region, this time under the banner of international business cooperation.

Spain’s King and Queen, Juan Carlos and Sofia, presided over the official opening of El Valle, the first gold mine to open in Asturias since Roman times. Chris von Christierson, chairman of Rio Narcea Gold Mines (RNG-T), welcomed the royal couple and praised the “cooperation between different nationalities” that brought the largest gold mine project in western Europe to fruition.

“We have a Canadian company, listed on the Toronto Stock Exchange, whose sole asset is a Spanish gold mining company with an international board of directors comprising Spaniards, North Americans and South Africans,” he said. “The mine is staffed predominantly by Spaniards; it is financed with international capital; it has the cooperation and support of Asturian and Spanish central governments, and it was established with contractors from the U.S., Canada, Australia and Spain. This was all achieved within budget and what must be record time; it took just ten months to build this gold plant and bring it to production.”

Christierson said Rio Narcea expects El Valle to produce more than 100,000 oz. gold annually from three open pits for 15 years. Preproduction capital expenditures totalled US$45 million, and cash operating costs are estimated at US$186 per oz. gold.

Rio Narcea believes the development of other deposits in the region may enable the company to extend the life of the operation.

“It is our hope and expectation that El Valle will be just the first of many future mines as the region becomes reinstated to its former prominence as a world-class gold mining district,” he added. “Our exploration efforts in the 4,000 sq. km of mineral rights and permits that we control are indicating the possibility of this being achieved.”

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Reviving golden past

The revival of gold mining in northern Spain began in the mid-1980s, when a subsidiary of South African-based major Anglo American teamed up with a local coal company to begin exploring the vicinity of the ancient Roman workings.

In early 1991, Rio Narcea’s predecessor, Concord Minera Asturiana (CMA), joined the effort, taking over as operator of an exploratory drilling program in 1993. That program revealed a zone of high-grade gold mineralization at El Valle, which was not deemed to be of sufficient size to warrant Anglo’s ongoing interest.

CMA and the Spanish coal company acquired Anglo’s interest and, following more drilling in early 1994, formed Rio Narcea to hold the properties.

Today, the company’s land package encompasses four major gold belts: Rio Narcea, Navelgas, Oscos and Salave. Most of the recent activity has focused on the easternmost belt, Rio Narcea, where El Valle is situated.

El Valle consists of six major zones of gold mineralization within a radius of 750 metres that form a single, northeasterly oriented mineralized system around the Boinas laccolith.

Gold mineralization was initially deposited as calcic and magnesic copper-gold skarns at the contact between the Boinas granodiorite and limestone and dolomite of the Lancara Formation. After extensive erosion, the reactivation of a northeasterly trending fracture zone provided conduits for the subsequent emplacement of porphyritic and diabasic dykes and low-temperature hydrothermal alteration that crosscut both the granodiorite and the skarn. The later events were characterized by the development of quartz-calcite-adularia veins and breccia veins, jasperoid and jasperoid breccias with epithermal gold mineralization.

These mineralizing events have resulted in a system with simpler geology than is usually associated with skarn deposits. For example, where the orebody consists of mineralization from the epithermal overprint, the zones have larger bulk dimensions and an orientation parallel to the fracture system.

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Mine plans

After several years of exploration, a feasibility study was completed in late 1996 that deemed El Valle viable. Permits were obtained that year, allowing construction to begin in May 1997. Fluor Daniel completed the project late that year and the first gold was poured in February 1998.

Total reserves at El Valle are estimated at 1.9 million oz. gold contained in 14.2 million tonnes of material with an average grade of 4.3 grams gold per tonne. Of this total, the three open pits scheduled to be mined (Boinas West, Boinas East and El Valle) hold proven reserves of 4.8 million tonnes with an average grade of 5.3 grams gold.

Mining began in the Boinas West pit following prestripping by the two main mining contractors, Sachez y Lago and Cemisa. More than 15 million tonnes of material were prestripped last year.

Surprisingly, several directors and officers of Rio Narcea confessed they were skeptical that El Valle could be a profitable producer, given the high strip ratio of the open-pit deposits. “We ran the numbers a few times before MinCorp did the feasibility study and found the grade was high enough to make it work,” said Eugene Spiering, vice-president of exploration.

The accelerated prestrip not only exposed ore-grade material in the first pit at Boinas West, it enabled some 10 million tonnes of waste to be compacted below the tailings pond, which was designed and constructed under the supervision of Knight Piesold.

Following the recent tailings spill at the Los Frailes mine in the southern part of the country, environmental groups came to El Valle to assess the integrity of its tailings dam. Before that visit, concerns had been raised that the dam might be at risk because of the high rainfall in the mountainous region. Mine officials told The Northern Miner that the skeptics were reassured by the size and nature of the structure at El Valle. The clay and plastic-lined pond at the mine site contains a closed circuit of bottom-drained, detoxified mill tailings processed through an Inco cyanide destruction plant.

The presence of the King and Queen at the mine opening also reassured investors skittish about the Spanish government’s commitment to mining in the wake of the Los Frailes spill. The senior staff at El Valle said mining is an important and valued contributor to the local economy, which has been hard hit by the closure of several coal mines. “We’ve hired many of those people,” Christierson said, adding that the workforce of 260 is largely made up of Asturians.

Guests attending the mine opening toured the new 60,000-tonne-per-year plant, where gold recoveries of about 95% are achieved through a combination of gravity, flotation and carbon-in-leach processes. Copper recoveries are low, rarely exceeding 50%.

The plant is designed to remove as much of the contained copper as possible to minimize cyanide consumption. Gold reports to both flotation and gravity concentrates and is separated by tabling to produce a high-grade concentrate for direct smelting. Gold recovered in the cyanide leaching circuit is also smelted to produce dor.

Rio Narcea says the plant is capable of producing up to 150,000 oz. gold annually. Though the mine has produced for only a few months, officials said grade expectations are being met and the mineralization has been found to be generally continuous.

The expansion program will involve the nearby Carles deposit (previously drilled by Anglo American) and an important high-grade discovery, dubbed Black Skarn, which lies beneath the Boinas East pit at El Valle. Tests have shown that if supergene ores from El Valle are blended with hypogene skarn and sulphide breccia ores from Carles, only minor adjustments will be required in the processing plant.

Carles has total reserves (in all categories) of 5.26 million tonnes grading 3 grams gold. Drilling to date at Black Skarn has outlined underground reserves estima
ted at 3.4 million tonnes with an average grade of 7.1 grams gold, plus copper and silver values. A 1-km-long adit, designed to drain the main pit, provides underground access for exploration drilling and future production from the Black Skarn zone.

Rio Narcea believes that the Black Skarn zone opens a new mining dimension at El Valle. Having reported assay results of up to 32 metres averaging 21.2 grams in a strongly oxidized and silicified skarn at a down-hole depth of 181 metres, it is not hard to agree.