At first glance, it appears to be a turnaround story in the making. All the ingredients are there — developed deposits, a modern mine and mill, a tailings disposal facility, roads, rail and a deep-water port — plus plenty of exploration upside in the largest volcanogenic massive sulphide district in the world. Yet
Like the Brunswick and Caribou zinc mines in eastern Canada and the Red Dog mine in Alaska, Aljustrel has fine-grained mineralogy of the type that makes life both interesting and complicated for metallurgists and mill operators. It’s a problem shared by other deposits in the Iberian pyrite belt, and elsewhere in the world for that matter. In the case of Aljustrel, poor recoveries were one of several factors contributing to the mine’s closure after an unprofitable 2-year production run that ended in 1993.
EuroZinc President Alvin Jackson is confident that with a bit of tweaking of the existing mill circuit, 85% zinc recoveries can be achieved at Aljustrel. This represents a dramatic improvement over the dismal 40% recoveries of the past, and transforms the failed project into one of obvious economic interest.
“We’re satisfied the [85%] target is attainable,” Jackson told The Northern Miner and a group of mining analysts during a recent site visit.
He bases his optimism on the positive results of a prefeasibility study, completed in 1998 by Rescan/Hatch and Knight Piesold. The study included metallurgical tests that indicated recoveries as high as 89% for zinc. Recoveries are expected to be in the 30%-to-35% range for silver and 50% for lead.
A bankable feasibility study by SRK Engineering and Rescan Engineering, scheduled for completion in the first quarter of 2000, will include results of pilot-plant metallurgical studies currently under way at the site.
Jackson stressed that EuroZinc’s approach differs in many ways from that of the previous operator, which exploited the lower-grade, copper-rich Moinho deposit. “Our focus has been to drill and develop the Feitais [zinc-rich] deposit, with the objective of proving up a 15-million-tonne reserve, enough for at least 10 years of mine life.”
Feitais and Moinho are two of five zoned massive sulphide deposits at Aljustrel; the others are Algares (mined out), Estacao and Gaviao. Typically, high-grade zinc, lead and silver zones are found at the top of the deposit and a copper zone, at the bottom (separated by a pyrite-rich zone). Aljustrel in turn is one of three giant assemblages of massive sulphides in the famous, 40-km-long Iberian pyrite belt, the other two being Rio Tinto and Neves Corvo.
At Feitas, drilling is currently aimed at expanding and upgrading the existing resource of 13 million tonnes grading 5.9% zinc, 2.02% lead and 0.24% copper. The average silver grade will be reported in the feasibility study; it is expected to be about 60 grams.
This year’s stepout drill program is expanding the main deposit, as well as confirming a newly discovered, shallow, high-grade zinc zone dubbed FS60. Some of the better zinc assays from this work include: 40.7 metres grading 8.5% zinc; 19 metres of 6.74%; 48 metres of 6.28%; and 16.1 metres of 8.69%.
In addition to the zinc hangingwall unit, the Feitais deposit hosts a copper footwall unit where grades of up to 4.46% copper over 24.5 metres have been intersected. Current thinking is that it hosts about 5 million tonnes grading in the range of 2.5% to 3% copper. However, more drilling is required to test this deeper target.
“We won’t drill the copper zone off until we’re underground at Feitais,” Jackson explained. The feasibility study will, however, look at the feasibility of phasing in a copper circuit as a separate stream in the mill.
The study will also include an updated minable reserve for Feitais, which should be drilled off on 35-to-40-metre spacings by year-end. To date, more than 75 holes totalling 23,500 metres have been drilled at the deposit, along with extensive underground channel sampling.
The company’s goal is to develop an operation treating 1.5 million tonnes per year of zinc-rich ore, beginning in late 2000. Capital costs are expected to be in the range of US$40-50 million. The project could qualify for substantial capital grants, which would reduce this amount.
Once the feasibility study is handed in and project financing is arranged, EuroZinc will have acquired a 75% interest in the Aljustrel project from a unit of the Portuguese state mining company, Empresa de Densenvolvimento Mineiro (EDM).
History
Like most mining camps in southern Europe, Aljustrel was first exploited by the ancient Romans, who worked its outcropping gossans for copper and gold. From 1830 through the 1980s, pyrite was mined for its sulphur content, largely from the Algares and Moinho deposits.
In 1991, a unit of EDM spent US$160 million to build a 1.2-million-tonne-per-year autogenous grinding mill to produce copper, lead and zinc in concentrates. The plant is modern and well-maintained, as are the rail spur and loading facilities at the port at Setubal. It would cost more than US$200 million to replace the existing infrastructure at Aljustrel.
Past mining took place exclusively at Moinho, which hosts an overall geological resource of 89 million tonnes grading 3.18% zinc, 1.15% lead and 0.86% copper. EuroZinc has since focused on identifying higher-grade portions that could be used as mill feed. Current estimates are that this higher-grade portion contains 4.6 million tonnes of 5.4% zinc, 2.2% lead, 0.5% copper and about 54 grams silver.
The Moinho deposit is well-developed and includes an ore-transport system connected to the mill. All facilities have been well-maintained, and production could be resumed quickly.
During an underground tour, it was evident that technical mistakes had been made when the Moinho mine operated briefly in the early 1990s. By Canadian standards, it is grossly over-built, with enough concrete to pave a major shopping mall. The stopes are huge (30 by 70 metres in some cases) and designed to accommodate large-scale extraction methods, which were not profitable owing to poor grade control and the lack of selective mining. (Weak metal prices didn’t help.) EuroZinc plans to mine only the zinc-rich portion, which averages about 15 metres in width, rather than the larger, lower-grade zone, which was mined at twice this width in the past.
While ground conditions are generally good, a hangingwall fault and related weakness forced miners to leave a mineralized skin to prevent caving problems. And there was no grizzly in place, which caused problems with oversized material in the mill.
Past mining was also hampered by organizational problems. There was no general manager (the mine was operated by department managers and bureaucrats) and only one mine geologist — an over-extended, under-appreciated fellow who seemed to rank near the bottom of the mine’s hierarchical chart.
“There were few geological studies in those days,” one former employee said. “In the past few months we’ve had more studies than in the mine’s previous life, and we’ve all learned a lot. Everything underground is well-maintained and being made ready for a brand new start.”
About 1.2 million tonnes are already fully developed, so Moinho could begin producing in a mere two months to provide feed for the mill while Feitais is being readied for production.
“We view Moinho as a back-stop deposit,” Jackson said. “It will have feed when we need it.”
Mill modifications
The ongoing feasibility study at Aljustrel will include updated plans on modifications to the mill, which has been well-maintained, though, here too, the builders were overgenerous with concrete. Originally sized at 3,500 tonnes per day, it will be modified
and upgraded to 4,300 tonnes.
To treat the zinc-rich ores from Feitais, EuroZinc intends to convert the autogenous mill into one that is semi-autogenous (SAG) and convert the pebble mill into a ball mill. It also plans to install two tower mills, which use less power and are more efficient when fine grinding is required. While the plant has column cells, these won’t be used, unless ongoing tests show that they are beneficial.
Fine-grained mineralization requires fine-grinding — down to 42 microns in the case of Aljustrel — to ensure good recoveries and good-quality concentrates. However, fine-grained minerals are slower to float and require a longer retention time in the flotation circuit.
While the previous operator had losses owing to minerals that would not float, the low recoveries of the past also had much to do with the variability of grades in the bulk-mined Moinho ores. EuroZinc is already doing test runs of Feitais ores through its on-site, 1-tonne-per-hour pilot plant. The small plant mimics the SAG ball mill circuit proposed for the mill and has a sequential zinc, then lead, circuit.
Two concentrates would be produced: a zinc concentrate expected to grade 50% zinc, and a lead-silver concentrate expected to grade 50% lead and about 900 grams silver. At this scale, Aljustrel would produce an estimated 168.7 million lbs. of zinc-in-concentrate, making it one of the world’s larger zinc mines. Silver and lead production would amount to 1.5 million oz. and 33.1 million lbs., respectively.
Plans
The bottom line of any feasibility study is profitability, and Aljustrel’s will be no exception. Based on results from the prefeasibility, EuroZinc expects to produce zinc at a cost (net of byproduct credits) of about 34 cents per lb. While this would ensure profitability at current zinc prices of about US51 cents per lb., analysts are increasingly bullish about the metal’s long-term prospects.
Achieving good metallurgical recoveries and producing good-quality concentrates appear to be the main challenges at Aljustrel. The recent addition to the board of Ted Fletcher, a former chief operating officer of Cominco, will no doubt help the company in its evolution as a zinc producer.
On the mining side, recent drilling at Feitais has most analysts predicting that the company’s reserve threshold will easily be met. Because the ground is competent and requires minimal support, direct mining costs are projected at only US$6.83 per tonne. Preliminary estimates are that crushing, conveying, processing and other provisions will bring total operating costs to US$16.60 per tonne.
Further savings could be obtained if a decision is made not to leave one skin of the Feitais deposit behind, as was done at Moinho owing to the existence of a fault. No such fault occurs at Feitais.
While low-cost, mechanized mining of large-scale stopes is planned, the ore will be selectively mined using good grade-control methods.
Aljustrel has an existing mining licence, though some permits are still required for surface work and other aspects of the proposed operation. All previous environmental liabilities will be borne by the Portuguese government.
The existing tailings disposal facility has room for another seven years of operation, and a lift would extend this even further.
Down the road, EuroZinc has potential to expand the life of the Aljustrel mine by drilling and defining its remaining deposits. Only limited work has been done to date at Estacao, which is believed to represent the fault offset of the Feitais deposit. It is geologically similar with respect to its high zinc grades and good continuity.
The Gaviao deposit, 2.5 km southwest of Moinho, was found in 1970. No underground development has been done; however, the deposit is reported to host a resource of 26 million tonnes grading 1.51% copper, 1% lead and 2.98% zinc, and it remains open at depth. The Algares deposit is mined out.
On the exploration front, EuroZinc has high hopes for its newly acquired, 75%-held Malhadinha concession. Several strong gravity anomalies within the 147-sq.-km concession will be tested using geophysics and drilling.
The acquisition of this concession boosts the company’s land package to a total of 160 sq. km.
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