Time for a second look at Bolivia

LA PAZ, BOLIVIA — With national elections out of the way here and a spate of local polls completed and showing something of a setback for the populist Movement Towards Socialism (MAS) government, the political dust is settling in Bolivia and it’s time to look again at the country’s mineral potential.

The chief attraction lies in the fact that much of Bolivia’s economic-style mineralization — vein deposits upon which the country’s mining reputation rests — either hasn’t been explored for bulk-mining potential, or has been superficially sampled.

The latest incentives stem from Bolivia’s first modern exploration boom between 1988 and 1998, and its subsequent fallout.

The earliest mining boom in Bolivia started in 1540 during the era of the Spanish Conquest. Later booms included a silver rush from 1870 to 1914, and the era of the legendary Tin Barons — Simon Patino, Carlos Aramayo and Mauricio Hochschild — from 1904 to the nationalization of their assets during the 1952 Bolivian Revolution.

During the 1988-98 boom, around 50 mainly Canadian juniors and a sprinkling of seniors — among them Newmont Mining (NMC-T, NEM-N), RTZ, Teck Cominco and Barrick Gold (ABX-T, ABX-N) combed the country and laid the foundation for ongoing exploration.

From a happy combination of Bolivian knowledge, shared expertise and international financing, returns were impressive.

Battle Mountain Gold and Newmont transformed private Bolivian company Empresa Minera Unificada’s (EMUSA) 2,000-tonne-per-day heap-leach mine on the Korikollo gold porphyry into an operation churning through 19,500 tonnes of sulphide ore per day, exploiting a reserve that peaked at 156 million tonnes grading 2.26 grams gold per tonne. The mine closed in 2003.

Disseminated gold at Korikollo was recognized in 1964 by the “Plan Triangular” — a foreign-financed aid program for the then-ailing, state-owned Bolivian Mining Corp. (COMIBOL). EMUSA confirmed the discovery in 1977 with a crosscut which sampled 1.2 grams gold and 12 grams silver over 240 metres in the dormant copper-gold vein deposit.

Bolivian-American consultants MINTEC found the San Cristobal deposit, with its 259 million tonnes grading 1.5% zinc, 0.6% lead and 62 grams silver per tonne. Current mine output stands at 40,000 tonnes per day. San Cristobal appeared among colonial and postcolonial workings alongside a couple of small mines.

Meanwhile, 360 million tonnes at 110 grams per tonne of oxide silver were outlined in the Cerro Rico deposit at Potosi through underground sampling sponsored by the United Nations Development Program. This was on top of 1.2billion oz. silver extracted from Potosi veins since their discovery in 1545.

Canadian junior Apogee Minerals (APE-V) drilled 23 million tonnes of open-pittable and underground material grading 75 grams silver, 1.5% zinc and 0.7% lead in the former Pulacayo vein silver producer, whose output from 1856 to 1958 exceeded 600 million oz. silver.

Silver Standard Resources (SSO-V, SSRI-Q) reported 80 million tonnes of 66 grams silver at El Asiento, which belonged to COMIBOL.

Another Canadian junior, New World Resource (NW-V) turned up 10.7 million tonnes of 0.9% copper, 1.05 grams gold at La Lipena in the Lipez ranges on the Argentine border.

After demonstrating that COMIBOL’s cooperative-run, 25-sq.-km bismuth-copper-tin-tungsten Tasna porphyry system contained disseminated gold, Corriente Resources (CTQ-T, ETQ-X) defined 630,000 tonnes of vein ore grading 1.5% bismuth, 1.3% copper, and 1.1 grams gold in sulphides. But a fading gold price forced the company to search for a quick return, and the disseminated potential revealed in scattered samples such as 140 metres of 1.06 grams gold on surface and 1.12 grams gold over 113 metres in a crosscut remains untested.

Other fruits of the boom were: a suggestion of 450 million tonnes of silver-zinc-lead mineralization in the long-abandoned upper levels of COMIBOL’s cooperative-controlled, 6-km-long Chocaya vein deposit; evidence of deep silver vein ore and disseminated silver-zinc-lead at the COMIBOL’s dormant Tatasi mine; and some 6 million oz. of new gold contained in what were small gold and gold-antimony vein mines in lower Paleozoic turbidites of the eastern Andes.

The more outstanding finds were: EMUSA’s and Orvana Minerals’ (ORV-T) Pederson, which tipped the scales at 52 million tonnes grading 1.4 grams gold; Australian junior Republic Gold’s Amayapampa, with 423,000 oz. gold in sight; Capacirca, near Amayapampa, and about the same size; the 12 million tonnes of 0.83 gram gold found at Kori Chaca and held by the Bolivian-owned company Inti Raymi; and perhaps the 1 million oz. gold in EMUSA’s Vinto prospect.

Taking into account the recent, on-trend Peruvian discoveries such as Capac Orkho at 42 million tonnes of 2.07 grams gold and the Ayapata and Ollachea deposits, each with 1-to-2-million-oz. gold potential, Bolivia’s East Andean turbidite belt, which extends for 1,000 km between the Peruvian and Argentine frontiers, deserves a second look.

Over 500 gold, gold-antimony, less commonly gold-tungsten (scheelite) and rarely gold-mercury occurrences are recorded in the belt and exhibit a genetic tie with intrusion-related tin-tungsten mineralization in the plutonic spine at the Eastern Andes.

The occurrences also have a close spatial relationship with mineralization in the Bolivian tin-silver belt, as well as with lead-zinc veining and Jurassic-Cretaceous alkaline-lamprophyric intrusion in the little-known and slightly diamondiferous incipient East Andean rift, common to Bolivia and southern Peru.

These deposits have shed over 1,000 tonnes of exploited and exploitable gold into Amazonian drainage off the Eastern Andes.

Foreign miners

On the mining side, Canada’s Pan American Silver (PAA-T, PAAS-Q) reopened COMIBOL’s San Vicente mine at a rate of 750 tonnes per day on 4.1 million tonnes at 370 grams silver and 4% zinc.

In 2003, Glencore International increased production from three leased COMIBOL mines — Bolivar, Colquiri and Porco — to some 70,00 tonnes of zinc concentrates per year and 3.5 million oz. silver per year.

On the flanks of Cerro Rico, Coeur d’Alene Mines (CDM-T, CDE-N) recovered 7.5 million oz. silver in 2009 from 46 million tonnes of dumps and residuals grading 123 grams silver, where COMSUR had previously leached 171-gram-silver-per-tonne colonial dumps at 4,000 metres elevation in the 1990s.

In eastern Bolivia’s tropical-lowland Precambrian rock (which was virtually unknown until mapped by the British and Bolivian Geological Surveys in 1976-86), the COMSUR-RTZ-Emicruz joint venture found the now-exhausted Puquio Norte deposit, with its 4 million tonnes of 2.4 grams gold in a quartz-pyrite-arsenopyrite pipe in a drag-folded, chert-siderite iron formation.

A combined effort of the three amigos Billiton, Orvana and Bolivian-owned La Rosa, resulted in the discovery of the enigmatic magnetite-chalcopyrite, iron-ore-copper-gold Don Mario deposit in diopside-marble, magnesian amphibole skarn and enveloping fibrolitic sillimanite, with total reserves approaching 10 million tonnes of 1.5% copper and 4 grams gold.

Canadian junior Essex Resources drilled 930,000 tonnes of 2.3% copper, 0.5% zinc, 1.5 grams gold and an equal amount of 2.2% oxide copper in the only partially explored Miguela volcanogenic massive sulphide deposit.

Another Canadian outfit, Eaglecrest Explorations (EEL-V) opened up a Telfer-style gold deposit originally worked by 18th century Portuguese adventurers in mid-Proterozoic continental quartzites at San Simon on the Brazilian border. Ore has proved elusive but Yamana Gold’s (YRI-T, AUY-N) annou
ncement of more than 2 million oz. gold in similar geology on the Brazilian side is encouraging.

Elsewhere in the Precambrian, Emicruz and later Solitario Exploration & Royalty (SLR-T, XPL-X) sunk 15 diamond-drill holes into palladium-platinum mineralization in the 720-sq.-km, 4,500-metre-thick upper Proterozoic Rincon del Tigre layered mafic-ultramafic complex. They obtained intersections of up to 1.27 grams palladium per tonne and 0.43 gram platinum over 10 and 4 metres, respectively, within 80-to 180-metre-wide altered gabbronorite-anorthosite cumulates with a fold-repeated strike length of 130 km.

Through prospecting and limited drilling, Emicruz also uncovered evidence of Mississippi Valley-and possibly Irish-and sedex-type zinc-lead-silver mineralization in carbonates and other horizons in late Proterozoic “Tucavaca” platform sedimentation, which already contain upwards of a billion tonnes of high-grade taconite and “Mutun” iron-manganese deposits astride the Bolivian-Brazilian border.

Currently, Brazil’s privately held Votorantim Group is about to explore lateritic nickel at Rincon del Tigre, and India’s Jindal Steel & Power has taken on Mutun.

All in all, exploration was successfully underway in Bolivia when the boom went bust in 1998 and Bolivian politics took a populist turn.

Yet some persist: Canadian junior South American Silver (SAC-T, SOHAF-O) continues to drill its Cretaceous sandstone-hosted Malku Khota silver deposit with a reported resource of 81 million tonnes at 43 grams silver and 6.7 grams indium; Apogee is drilling at Pulacayo; Orvana is expanding to 2,000 tonnes per day at Don Mario; new owner Sumitomo is increasing San Cristobal’s reserves; oxide gold is being mined at Kori Chaca; Republic expects to have Amayapampa in production at 5,000 tonnes per day in the near future; and Canadian junior Castillian Resources (CT-V) is working on social issues to reactivate Pederson.

New World maintains exploration at La Lipeña and anticipates drilling its Pastos Grandes prospect, one of the very few private lithium ventures in Bolivia.

Dowa Mining and some Asian groups are drilling base metal occurrences.

State involvement includes joint ventures with Korea Resources Corp. on COMIBOL’s former Corocoro underground red-bed copper mine (with its historic production of 7 million tonnes grading 3% copper) and with Jindal at Mutun as well as development of the country’s immense state-owned evaporitic lithium resources.

Bolivia reaches a crossroads in 2010. After four years of discussions, a new mining code has been promised for this August. The government seems to be realizing that a mining industry accounting for 40% of exports (natural gas sales are 37%) and still based on mines found in the 16th century — needs rejuvenation.

The government claims “Bolivia wants partners” — although this probably means state participation in new mining projects. While not an effusive invitation, the statement at least calls for a nutshell view of Bolivia’s past, present and hopefully future mining industry.

Bolivia primer

The country’s size is 1.1 million sq. km, compared with Peru’s 1.3 million sq. km and Chile’s 760,000 sq. km.

Bolivia’s geology is Cordilleran and Precambrian subdivided into five parts:

1) Eastern Andes— 280,000 sq. km (of which 100,000 sq. km is mineralized), composed of a lower Paleozoic marine clastic-wedge material derived from the Brazilian shield. It is affected by reduced Mesozoic magmatism in the north and by Miocene volcanism in the south. It features the Bolivian tin-silver belt, highlighted by the Potosi and Catavi tin deposits, which made Patino’s fortune from an output of 650,000 tonnes of metallic tin in veins that ran up to 17% tin within a porphyry plug that still hasn’t been fully explored.

2) Western Andes— 3,000 sq. km, and essentially a 700-km-long, 30- to 50-km-wide Miocene and Quaternary strato-volcanic chain and divergent spurs straddling the Chilean border and largely blanketing prospective porphyry copper hunting ground.

3) Altiplano— a 95,000 sq. km, 3,000-metre-deep Tertiary, sandstone- filled intermontane basin distinguished by Korikollo and San Cristobal, both proceeding from turbiditic basement domes beneath the fill and by 15,000 sq. km of lithium- bearing saline evaporites.

4) Beni-Chaco Plains — 450,000 sq. km of forested to scrubby bushed alluvial flats set between the petroliferous rim of the Eastern Andes and the Bolivian Precambrian.

5) Precambrian — comprising 200,000 sq. km on the western edge of the Brazilian Guapore craton, which is noted for diamonds, the Rondonian tin fields and the Carajas iron-copper-gold deposits. The Bolivian side, now known to be gold-bearing, has been a recipient of considerable Proterozoic and Mesozoic alkaline activity. This area was covered by a rarely consulted airborne magnetic-radiometric survey flown in the 1990s on 400-metre line spacing and up to 120-metre flight height. This data package was used for uranium exploration by Toronto-based Mega Uranium (MGA-T) from 2006-09 and is an aid to rare earth exploration and search for Don Mario-type magnetite-copper- gold ore.

Bolivia’s mining industry grew in stages: Colonial from 1540 to Bolivian independence in 1825; a diminished post-colonial period from 1825 to the 1880s; the opulent Tin Baron epoch that made Bolivia the world’s foremost producer until Malaysia came on stream; the COMIBOL years built on the Tin Baron assets until the collapse of the tin price in 1985; and the domination of private industry thereafter, due to its discoveries during the last boom and its output from COMIBOL leases.

Remaining players today are the state (through COMIBOL), small miners working gold-bearing Cordilleran vein and alluvial deposits on the Amazonian slope of the Eastern Andes, and mining cooperatives engaged in salvage of COMIBOL’s exhausted or unprofitable mines. The latter are undoubtedly becoming a power in the Bolivian mining scene.

COMIBOL is catching its second wind, though, with several businesses of note: its Huanuni tin mine is producing over 9,000 tonnes of metal per year — second only to MINSUR’s San Rafael tin mine in Peru’s Puno department; its proceeds from its Glencore leases and possession of the country’s downstream processing; its new 18,000-tonne-per-year tin smelter; its 52,000-tonne-per-year, Kivcet-model lead-silver smelter, idle since its inauguration in 1985; its dormant 4,500-tonnesper- day, Russian-built tin volatilization plant that proved uneconomic; and its small bismuth smelter for Tasna ore.

The country offers immediate to short-term prospects for drilling unfinished silver and gold projects left over from the last boom and longer-range chances to encounter unrecognized bulk-minable base and precious metal targets in the Cordillera.

The Precambrian area had the Rapitan iron, small amounts of tantalite and beryl, and alluvial gold workings during the Jesuits Orders’ 18th-century theocracy in the Parana river basin. The recent boom added Don Mario, Puquio Norte and other gold occurrences.

Later, on the strength of Don Mario geology, BHP Billiton (BHP-N) began a search for Broken Hill-type sedex mineralization. This was quickly aborted, however, upon a misunderstanding with the local populace — a previously unheard of event in the Precambrian. South Korean interests are presently about to drill stock-work gold.

A greater challenge in Bolivia would be to explore for another Korikollo beneath Altiplano overburden, or a Potosi or Catavi under past mineralization and volcanics in the tin-silver belt or even for porphyry copper along structures such as the east-west Collahuasi lineament entering Bolivia from Chile.

Interestingly enough, Rio Tinto (RTP-N, RIO-L) predecessor RTZ tried this approac
h through induced- polarization surveying that traced the West Fissure zone and through aeromagnetic surveying in the tin-silver belt.

Getting into an even more speculative mindset, there is the untested possibility that the halite-gypsum- anhydrite section in a Triassic “Entre Rios” depositional centre within the East Andean petroliferous rim might contain potash.

As can be seen, Bolivia is not for the faint-hearted, but then neither were Peru and Chile not so long ago.

— James McNamee is a Canadian geologist who graduated from Queens in 1952. He has been working in and exploring South America since 1962. His lengthy list of clients has included Cominco, Comsur, Noranda, Bolivian Mining Corp, Mega Uranium, BHP Billiton and the United Nations, among others.

Osvaldo Arce-Burgoa is a professional geological and mineral processing engineer with 26 years experience in Bolivia. He has a Doctor of Engineering from the Tohoku University at Sendai, Japan and a Bachelor of Science degree in Geological Engineering from the San Andrés University, Bolivia. He is a former National Director of the Bolivian Geological Survey, Main Technical Advisor of the National Mining Corporation (COMIBOL), Exploration Manager and Chief Geologist in various mining and exploration companies.