Vancouver —
Cerro Casale is part of the Aldebaran property in northern Chile. The high-altitude, bulk-tonnage project is held by Compania Minera Casale (CMC), a Chilean company owned 51% by Placer Dome, 24% by
At last report, proven and probable reserves stood at 1 billion tonnes with an average grade of 0.26% copper and 0.69 gram gold per tonne, containing about 25.4 million oz. gold and 6.4 billion lbs. copper.
Technical aspects of the feasibility study were not updated, and the partners still envision an open-pit mine that could produce about 975,000 oz. gold and 130,000 tonnes copper each year over a mine life of 18 years. The waste-to-ore stripping ratio is 2.7-to-1, while gold and copper recoveries are estimated at 76.3% and 87.1%, respectively.
The 2000 study concluded that Cerro Casale is “technically feasible as one of the world’s largest gold-copper mines.” However it was not deemed economically viable, owing to low metal prices that limited financing options at that time.
With prices for both copper and gold now at significantly higher levels, the partners are resuming efforts to arrange financing on terms that will allow the project to move forward. “In the current market environment I remain confident we can achieve that objective,” states CMC President William Hayes.
Under the terms of its agreement with Bema and Arizona Star, Placer Dome is required to arrange US$1.3 billion in financing, including US$200 million in equity on behalf of all shareholders, and provide a pre-completion guarantee for an amount not greater than US$1.1 billion in senior loans. Capital requirements exceeding US$1.3 billion of the financing will be funded pro rata by the joint-venture participants.
CMC is evaluating various financing options to identify terms and conditions that would produce an acceptable financing structure for all parties. Discussions are also taking place for commercial contracts and long-term marketing off-take arrangements. Meanwhile, Bema and Arizona Star have agreed to defer Placer Dome’s quarterly obligation to deliver a financing certificate to no later than June 30 of this year.
Assuming a copper price of US95 per lb., Cerro Casale is projected to incur cash costs of US$115 per oz. gold (net of copper credits), and total costs (including amortization and depreciation of capital) of about US$225 per oz.
Placer Dome says it has identified opportunities to optimize technical aspects of the operation, which it intends to evaluate in the coming months.
The 2000 feasibility study envisioned production of a gold-copper concentrate using standard crushing, grinding and flotation techniques. The concentrate would be transported 224 km by pipeline to the Chilean coast, then shipped to a smelter for final processing.
Additional gold and silver would be extracted from the flotation cleaner tailings through standard cyanide leach methods on site, resulting in a dor product.
Placer Dome has already secured water rights and received approvals for the environmental impact study, leaving financing as the last hurdle to cross before mine development can begin.
The Cerro Casale deposit was discovered by Bema, which also owns half of the nearby Refugio open-pit, heap-leach gold mine. Operations there were suspended in May 2001, owing to weak gold prices, but with gold prices now at robust levels, Bema and partner
When mining was suspended, reserves were sufficient to allow for four more years of mining. Since then, a 56,000-metre drill program has boosted reserves to justify expanding production by more than 25%, while extending the mine life to about 10 years.
Reserves are estimated at 124 million tonnes grading 0.86 gram gold, containing about 3.4 million oz. Life-of-mine annual gold production is expected to range from 230,000 to 260,000 oz. at an average total cash cost of US$225 per oz.
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