EXPANDING EL INDIO AND LA COIPA: Lac, Placer may boost

With two of the country’s largest producers of precious metals looking to boost production, it isn’t surprising that Chile’s gold output is expected to climb as well.

A rise in excess of 1.2 million oz. will make Chile the second-largest gold producer in South America, next to Brazil.

At El Indio, 120 km east of La Serena, Lac Minerals (TSE) is looking at expanding production from the Tambo mine.

About 500 km north of that deposit, partners Placer Dome (TSE) and TVX Gold (TSE) hope to add to production by raising mill throughput at their jointly owned La Coipa deposit.

The Northern Miner visited both deposits and learned first-hand about the expansion plans.

Lac is Chile’s largest gold miner, producing ore from the complex known as El Indio, which encompasses the mine of the same name, as well as the nearby Tambo operation.

The main orebody at the Indio mine consists of multiple veins in a block which measures 500 by 150 metres. Two main types of veins are present: sulphide veins which contain mostly enargite (a copper sulphide) and pyrite, and siliceous veins which contain gold as disseminations and micro veinlets. There is no copper mineralization in the Tambo deposits.

Gold occurs in breccia pipes which approximate inverted cones, and production comes from two open pits: Kimberly and Wendy. Higher-grade ore is processed in the Indio mill, whereas lower-grade ore is heap-leached.

The mill operates at 3,100 tonnes per day, with about 75% of the feed supplied from the underground Indio mine.

Lac has stepped up its exploration efforts in the Indio area and plans to spend US$5 million over the next few years to delineate new reserves. A detailed feasibility study is under way at Tambo, the intention being to build a 5,000-6,000-tonne-per-day agitation leach mill and expand the heap-leach capacity to 10,000 tonnes per day. The capital cost of this expansion is estimated to be US$80 million.

Proven and probable reserves at El Indio are as follows:

* Plant ore: 13.3 million tonnes grading 5.14 grams gold per tonne; * Heap-leach ore: 5.7 million tonnes at 1.03 grams gold;

* Copper reserves: 10.9 million tonnes at 3.3% copper.

To the end of September production at El Indio totaled 138,194 oz. gold and 20,927 tonnes of copper. Gold production is down 19% over last year, primarily because of a lack of development and backfill underground. Cash costs for the first nine months of this year were US$215 per oz. gold. This year, the Coipa mine is on schedule to produce 250,000 oz. gold and 13 million oz. silver, making it the largest silver producer in the world. Current production comes from the Ladera-Farellon orebody. A second zone, Coipa Norte, 3.8 km north of the Ladera-Farellon pit, is slated to enter production in 1995.

About 5.4 million tonnes will be processed in 1993, and new avenues for increasing production are being explored. Carl Gagnier, manager of operations at the mine, said the operations team is evaluating the mine plan to boost productivity and mill throughput.

The mill is processing 15,400 tonnes per day and the long-term objective is to increase this to 18,000 tonnes. To achieve this, a counter-current decantation plant is being added to the mill circuit. Although capital expenditures were not discussed, increases in production are expected to be achieved at very low costs.

Reserves at La Coipa total 61.2 million tonnes grading 1.27 grams gold and 75 grams silver. Cash operating costs for the first nine months of the year were US$151 per oz.