MINING IN CHILE — Aurex Res. employs — think-small’

While most foreign mining companies active in Chile target exploration-stage properties of “elephantine” potential, Aurex Resources (VSE) — part of the Hughes-Lang Group — is setting its sights on smaller, more mature plays.

For example, just east of La Serena, a seaside city 465 km north of Santiago, Aurex has acquired a 70% interest in the Cobrex copper-silver mine and three small operating mills. The purchase price, about $4.2-million, will give Aurex immediate production — 1,200 tonnes of copper metal and 2.2 million grams silver — from a 365-tonne-per-day producer.

Moreover, Aurex plans to expand to 590 tonnes per day by July and construct a larger, more modern mill near the mine — all in the hope that, eventually, further operating improvements and sustained exploration will lead to a much larger operation.

The Cobrex acquisition demonstrates what has become Aurex’s game-plan in Chile. The plan goes something like this: buy a majority piece of a slightly-better-than-marginal, privately owned property, and ensure that it is near infrastructure (that is, not 4,000 metres up in the Andes) and that it shows geological potential.

“The unique feature of our approach is that none other than our company wants these types of deposits,” says Aurex Vice-president Robert Kemeny, an experienced Chilean living in Vancouver who once owned Chile’s largest iron mines (before nationalization in the 1970s).

“Most companies want big giants, they don’t want 1,000-tonne-per-day operations,” he noted.

The company’s second foray into the hot Chilean market is another 70% interest in a smallish venture. Known as the San Estaban complex, it consists of three operating copper-gold mines and an 800-tonne-per-day mill, formerly owned by the Kemeny family and now run by Marcello Kemeny, Robert’s nephew. The project is 805 km north of La Serena, near the city of Copiapo, a lush, green oasis amid the arid, mountainous Atacama Desert.

The Northern Miner recently visited both Aurex operations for a first-hand look at the fruits of the company’s strategy.

The San Estaban site consists of three mines, all of which are accessible by ramps. The project also features a central concentrator a few kilometres from Copiapo, and an exploration project is under way.

The largest mine — San Antonio — extracts copper-gold ore from two parallel, near-vertical veins spaced 20-25 metres apart. The average width of each vein is 2.5 metres and each ranges from 1.5 to 6 metres wide. The veins generally strike north-south for about 750 metres.

Based on available geological information (which is scant, considering diamond drilling has never occurred on this or any other property in the San Estaban fold), the veins run at least 400 metres deep.

Until now, reserves have been outlined simply by ramping 25 metres below the mine workings and crosscutting into the vein.

San Antonio started up in the early 1980s and, so far, there is no indication that the veins pinch out at depth. In fact, geologists are confident they run to a considerable depth.

The mining sequence is as follows: After the levels have been prepared, upholes are drilled from the lower haulage level to carve out “chimneys” (funnel-shaped openings which, when blasted out, serve as drawpoints). After the chimneys have been drilled, wagon drills (or a down-the-hole drill) carve the production holes from a level 25 metres above the haulage drift. Occasionally, a full 50-metre section can be blasted.

Neither backfill nor bolting is required because the wall rocks have proved extremely competent. Mine water is trucked from Copiapo.

Load-haul-dump machines and front-end loaders pile ore onto the diesel trucks for haulage to the portal. Large, flat-bed trucks then haul the material down the twisting gravel road to the mill, about 45 km away.

The other two mines — San Jose and Carmen — work what are essentially identical vein-type systems, although the former, at 150 metres, has the shorter strike length (Carmen’s has been traced for 650 metres). Yet both Carmen and San Jose have single (as opposed to twin) veins; these pinch and swell, and mining proceeds accordingly. As with San Antonio, all development (except for the ramp) is in ore.

Currently, Aurex is exploring, via a ramp, the nearby Santa Gemita deposit, which has been traced along surface for about 300 metres.

While the ores from all three mines vary somewhat in terms of mineralogy, the average millhead grade is 1.9 grams gold per tonne and 1% copper. The combined mill feed is 750 tonnes per day, although each ore is milled separately in batch processes because of differing ore types. At San Antonio and San Jose, the gold occurs as free gold and in pyrite whereas, at Carmen, it is not associated with pyrite.

The concentrator, which serves both mines, is a mix of the old and the new, with flat-bed ore trucks being weighed on a computerized scale and then unloaded manually with hand shovels. The rest of the concentrator is not unlike what one might see at a Canadian operation, except that all of the circuits are exposed to the elements — which, in this part of the world, are not harsh (rainfall here is virtually nil and temperatures range from 5 to 30C).

In the crushing circuit (a crowded but still workable system), two jaw crushers and a secondary cone crusher reduce run-of-mine ore to 0.6 cm (1/4 inch). The grinding circuit consists of four ball mills, the fourth being a small regrinder. Flotation consists of roughers, rougher scavengers and cleaners. Concentrates report to cone thickeners and to a belt filter that dries the material to 5-6% moisture content.

The concentrates, running 38 grams gold and 19-20% copper, are shipped to a custom smelter a few kilometres away.

The Cobrex orebody, in the Elqui Valley, is a stratabound structure which experienced a second period of mineralization in the form of fracture fillings within a shear zone. These veins run vertically, intersecting the stratabound ore. The average thickness of the stratabound orebody — called “mantos” in Chile — is 6-15 metres. It is a flat-lying (though slightly domed) structure and is mined by room-and-pillar methods. This involves the use of an electric-hydraulic drill jumbo, standard front-end loaders (as opposed to the more common underground LHDs), and diesel dump trucks to haul the run-of-mine ore to the portal. (Access is by three adits, with the middle level serving as the haulage route to the portal.)

Over its 40-year operational history, Cobrex has seen little in the way of systematic reserve calculations. Currently, the official figure is about 1 million tonnes grading 1.3% copper and 34.3 grams silver per tonne (1 oz. per ton). Copper appears mainly as bornite in the manto orebody and as chalcopyrite in the vein systems.

The flat-lying manto-type structure has proved consistent and Cobrex General Manager John Selters believes an additional 8-10 million tonnes can be delineated simply by driving another 700 metres from the current workings and out the other side of the mountain. (The mine portal for Aurex’s Coca Cola mine is on the north side of the mountain, a hundred metres or so above the valley floor. On the south side of the mountain is another adit, driven north in ore and likely into the same manto orebody.)

“The basic approach is to convert the current mining extraction operation to an ore reserve development mode, driving headings southward on 5-8 vein structures at the manto-type horizon,” Selters said in a report written for Aurex.

With the extra headings producing ore-grade material, an expansion to 650 tonnes per day should be attainable. A larger concentrator (currently under construction) at this mine could handle about 500 tonnes; the remaining 150 tonnes will be trucked down the valley to a second Cobrex-owned mill. (Selters said the third concentrator, with its ancient trapiches — Chilean grinding mills — could become a metallurgical test plant for any new ore finds.)

Once completed, the main mill will feature primary, secondary and tertiary crushers, eight
ball mills, rougher flotation with a regrind circuit, a cleaning circuit, thickeners and filters.

Ultimately, the daily production target is 2,000 tonnes, but this will depend heavily on Aurex’s ability to prove up a rather large tonnage. In the short term, Selters would be happy to see the daily rate rise to 1,000 tonnes. “We sense we can build reserves very quickly here,” he said.