Vena sizes up Azulcocha tailings

A 56 hole drill program has allowed Vena Resources (VEM-V) to pin down a National Instrument 43-101-compliant reserve estimate for tailings at the 9.3-sq.-km Azulcocha zinc-manganese-gold project in Peru’s Junin department.

Probable reserves are estimated at 908,400 tonnes grading 3.3% zinc, 10% manganese, and 1.1 grams gold per tonne. The reserves are contained in three areas, with the bulk (714,800 tonnes running 2.75% zinc, 10.8% manganese, and 1.1 grams gold) found in Area 2.

The tailings were produced by the Mina Gran Bretaa zinc-antimony mine that produced 314,100 tonnes of concentrate from some 1.4 million tonnes of ore between 1971 and 1985. Vena says historical records form the mine indicate that an estimated 3.3 million tonnes of high-grade zinc and manganese ore remain to be mined. The mine also produced some 1.1 million tonnes of tailings during its life.

Excluded from the estimate are 85,800 tonnes of inferred resources grading an estimated 2.8% zinc, 10.8% manganese and 1.1 grams gold. The material was not accessible to drilling required to upgrade it to an indicated or measured resource. Another 67,300 tonnes of material were left out to account for 0.35-metre mining loss.

Metallurgical test work indicates that the tailings can produce a marketable zinc concentrate exceeding 55% zinc, with a total recovery of 66%; a manganese dioxide product can also be produced at a total recovery of 71.1%. Manganese dioxide can be recovered from the tailings via both selective flotation and sulphuric acid leach. It is not currently known if the gold can be economically extracted. Tailings from the plant would be re-deposited near the original tailings area.

A preliminary pre-feasibility study concludes that tailings can be recovered at a cost of US$3 per tonne for mining and tailings disposal; total operating costs amount to US$11 per tonne. Zinc recovery would entail regrinding the material to 100% passing 100 mesh followed by a three-phase flotation process. Total plant cost is pegged at US $6.50 per tonne.

Preliminary capital costs for a proposed 500-tonne-per-day operation is estimated at US$7.3 million. The project’s base case net present value (at a 10% discount) rings in at US$37.2 million, with an internal rate of return of 157%. At that rate, payback would come in around 4 months. The estimates employ a zinc price of US50 per lb. and US60 per lb. of manganese dioxide.

Vena says some US$655,000 is required to complete a final feasibility study.