Neuquen project in Argentina — Yamana, MIM explore `red bed’ deposits

Although Argentina is not known for its copper production, partners Yamana Resources (TSE) and Australian-based MIM Holdings are working to remedy this situation.

The Neuquen project is Yamana’s most advanced exploration project, consisting of eight cateos (or claim blocks) totalling 209,000 acres. The target of exploration is oxide copper (or “red bed”) deposits in Cretaceous-aged sandstones which are amenable to solvent

extraction-electrowinning.

On a recent visit to Argentina, The Northern Miner viewed the project and discussed its status with Yamana and MIM officials.

According to Richard Walters, Yamana’s vice-president of exploration, the mineralization was formed when copper-bearing brine solutions came into contact with organic material in the sandstones. The interaction caused the copper to precipitate, forming minerals such as malachite, chrysocolla, chalcocite and cuprite. Prerequisites to the formation of economic deposits here include high porosity and permeability in the sandstone units, as well as the presence of an impermeable layer, such as shale, which acts like a trap (increasing the copper concentration and enhancing the grade).

The area around Neuquen was previously tested for copper, and many of the pits dug during the 1940s are still evident.

Yamana’s predecessor and now its operating subsidiary, Minera Polimet, also examined the area. In doing so, it made one significant discovery. Previously, copper mineralization was thought to have precipitated on to black organic nodules within the sandstone units. However, upon closer examination, it was determined that many of the nodules were, in fact, cuprite, a copper sulphide mineral. As a result, the value of the project was enhanced.

To date, Yamana has examined three oxide deposits that contain more than 400 million lb. copper within potentially open-pit deposits which outcrop. Currently, three of Yamana’s cateos have geological resources. Barda Gonzoles features a resource of 35.5 million tonnes averaging 0.37% copper, and at Tordillos, 9.35 million tonnes grading 0.42% copper have been delineated. A third claim block, known as Cerro Granito, hosts 320,000 tonnes at 1.87% copper.

Realizing the potential of the project, MIM decided to enter a joint-venture agreement with Yamana. MIM can earn a 50% working interest by spending $US2.5 million and carrying out a feasibility study by October, 1995. MIM is not only looking at the areas where resources have been

defined; it is searching for other “hidden or covered” deposits in an effort to increase total resources to 100 million tonnes.

MIM, the current operator, has completed interpretation of LANDSAT (satellite) imagery, and mapping, sampling and drilling are scheduled to begin shortly.

If Yamana and MIM proceed with the development of a copper project, several factors unique to the area could prove to be economically advantageous.

First, the area has an abundance of hydroelectric power and is situated near the town of Neuquen, a major centre and source of skilled labor.

Second, copper produced domestically commands a 40% premium relative to the price on the London Metals Exchange. This is so because taxes, including the national value-added tax and import duties, are not payable.

Third, initial metallurgical tests indicate that recoveries of 95% copper are achievable with relatively low acid consumption rates. (On the down side, sulphuric acid is expensive in Argentina, the price being roughly US$100 per tonne. However, Yamana, recognizing this problem, has taken a 50% interest in a nearby sulphur project.)

The newly discovered presence of cuprite, a copper sulphide mineral, is also advantageous, as this acts as an acid-generating ore, thereby lowering the rate (and cost) of acid consumption.