New law clears cyanide use in Rio Negro, Argentina

The passage of a law that allows the use of chemicals including sodium cyanide in mineral processing lifts the prospects of advancing Pan American Silver‘s (PAA-T, PAS-Q) Calcatreu gold project in Argentina’s Rio Negro province.

Previous legislation permitted open-pit mining in the province but banned the use of cyanide in mineral processing, rendering the Calcatreu project uneconomic.

The silver producer said the new legislation was passed in late December and was enacted into law on Jan. 9. Pan American also pointed out that the law lays out the parameters of the evaluation process for the filing and approval of environmental impact assessments (EIA) in Rio Negro. The EIA is required to mine and process minerals in the province. 

Pan American acquired 100% of the Calcatreu project in early 2010 through its takeover of Aquiline Resources, but has done very little work on the property due to the ban on cyanide use. Last year it spent just $1.7 million on the project – collecting metallurgical sample materials and drilling 3,000 metres. 

In a press release the company said it has not confirmed or updated the project’s resource estimate, which was prepared in April 2008 by Micon for the previous owner. 

According to those estimates, Calcatreu hosts 8 million indicated tonnes grading 2.63 grams gold per tonne and 25.7 grams silver per tonne. Inferred resources add 3.4 million tonnes of 2.06 grams gold and 16.6 grams silver.

This year Pan American plans to accelerate development including more diamond drilling, metallurgical testing, environmental baseline studies and preliminary engineering.

Calcatreu is less than 140 km north of Pan American’s Navidad silver development project, which lies in the central Meseta region of Patagonia just across the border in the neighboring province of Chubut. 

Pan American commented that since the recent re-election of President Cristina Fernandez de Kirchner there has “clearly been a positive shift in attitude towards mining and mining investment in Argentina.”