Minerandina-e Nº 597 (December 07th, 2009)

Minerandina-e Nº 597 (December 07th, 2009)

MinerAndina -e is a publication of
MinerAndina, a communications company
specialized on mining, gas and power
Weekly Electronic Magazine Vol. XIV Nº597 December. 07th, 2009
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Index
Mining
Mining
Alturas prepares itself to drill in
Chapi Chapi-Utupara
Pag. 533
Antamina’s expansion reaches
US$380 million, according to Xstrata
Pag. 533
MARKETS
Pag. 535
IN BRIEF… IN BRIEF…
Pag. 536
IIMP to modernize Model Mine of
the Parque de Las Leyendas
Pag. 538
EXPOMIN 2010 to be the biggest in
its history
Statistics
Energy Production
Electric Market
in
the
Mining
junior
Alturas
Minerals Corp., Toronto,
hopes to raise funds of
between C$1 million and C$2
million over the next 3
months, with the objective of
financing a drilling program on
its most advanced Chapi Chapi-Utupara copper-gold project in its
profile, Paul Pearson, General Manager of the company, told
MinerAndina –e. The junior mining company has 8 exploration
projects in Peru.
MINERANDINA INTERNATIONAL
Chile
Barrick and Kinross finalizes
feasibility of Cerro Casale
ALTURAS PREPARES ITSELF TO DRILL IN CHAPI CHAPIUTUPARA
And seeks rare earths specialist, as well as new partners
Pag. 541
Pag. 539
Pag. 542
Covering an extension of 10,000ha in the Antabamba province,
Cusco, Chapi Chapi-Utupara is a merger of 2 projects as part of the
risk sharing agreement between Alturas (80%) and Minera IRL,
Jersey, (20%), operator of the Corihuarmi gold mine. Utupara is a
copper-gold skarn porphyry and Chapi-Chapi is a Cu-Au exoskarn
and endoskarn system.
As such, Alturas Minerals has re-started its projects after the
involuntary hiatus due to the impact of the 2009 international
financial crisis and the credit restrictions on exploration companies.
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During this year, the company reduced its activities to the minimum, although
it maintained its presence through road shows and communication links with
potential investors.
“Large mining companies already know that they have to act aggressively
and quickly, as there are few advanced projects and those that are a little
more advanced are going to be taken up”, commented Pearson, adding that
the latter can still be found to be relatively cheap.
In line with this, Alturas is preparing Chapi Chapi-Utupara for 15,000 meters
of diamond drilling over an estimated time period of 18 months, after which it
would be able to estimate inferred resources for the project. The coming
campaign, which will be financed with the next capital fundraising, should
cover the first 5,000 meters in approximately 20 exploration drill holes. For
the time being, it has just discovered a new zone for drilling called Huarajo,
where there is evidence of disseminated gold in quartzite.
The project already has the main studies (geophysical, geochemical,
trenches, mappings) and 5,000 meters of drillings. Among the best results
obtained in the Utupara skarn, is a strip of more than 1gr/t Au and 1.5% Cu,
according to Pearson. The executive estimates that in order to do a scoping
study, they would need to drill at least 20,000 to 40,000 meters.
To date, Alturas and Minera IRL have invested a total of US$3.8 million in
the joint project, with US$3.3 million in Utupara and US$0.5 million in ChapiChapi.
Alturas hopes to discover a big copper-gold porphyry under the skarn, similar
to the Haquira project (Antares) that have also discovered world-class
deposits like Tintaya, Los Chancas and Las Bambas contained in the
copper-gold strip.
“Tierras Raras”
Pr
Gd
Ce
La
Sm
Nd
The second most attractive project for Alturas is the Huajoto high-sulfuration
skarn system located in the province and region of Huancavelica. Besides
containing zinc and gold, what is new in the project is the presence of rare
earths (elements of column F in the Periodic Table). The main applications of
these earths are currently in renewable energies, as well as in the
manufacture of magnets, superconductors, lasers and high technology in
general.
“The main global producer of rare earths is China, but it has announced that
it will restrict their export, putting the rest of world in a vulnerable position. It
is very difficult to find rare earths projects in the world”, explained Pearson.
He added that Huajoto is an intrusive and volcanic center similar to the large
mineralized systems of Colquijirca and Cerro de Pasco, with high
sulphidation gold, and zinc replacement, which is associated with rare earths
that have revealed grades of between 0.25% and 1%.
Huajoto was originally explored by Teck, who was searching for zinc and
gold and is now in a JV with Alturas. In 2008, the Canadian junior drilled
2,000 meters, and did a lot of geophysical, mapping and geochemical
studies with a total investment of US$1.6 million till date, having earned a
534 / Nov. 30th, 2009
65% of the project. Alturas converted Huajoto to a deposit with three
production objectives – zinc, gold and rare earths. Before the end of the
year, Teck will have to decide if it will abandon the stake that it has, or
continue.
Alturas’ plans in Huajoto would be to complete the analysis of all the
exploration drill holes, and later to hire a rare earths specialist to evaluate the
results. Based on this, it seeks for a partner, or direct investment. “There are
already 3 companies that have displayed their interest in examining the data.
In the next 3 months, we hope to have an announcement”, said the
executive.
The company’s strategy for Huajoto is based on the due diligence that it is
presently carrying out on the Corina copper-gold project located 70km
northeast of La Serena, in the IV Region of Chile. Alturas signed a letter of
intent end November to purchase the property from its local owner, Mr.
Francisco Schubert. According to the agreement, the junior has until 31
December to make a formal purchase offer.
The concretization of the acquisition will be Alturas’ first step out of Peru, and
forms part of its geographical diversification strategy. Meanwhile, the
company is in talks with potential partners for its Callejones (Cu-Au), La
Divina (Au-Ag) and Sombrero (Cu-Au) projects, situated in La Libertad,
Lambayeque and Ayacucho respectively.
Alturas has other JVs with third parties for the gold-silver Ccaccapaqui (Cia.
De Minas Buenaventura) project, the San Antonio copper-zinc skarn (with
Minera del Suroeste) and the Pampa Colorada copper-gold skarn, for which
it is also looking for a partner.
…go to index
535 / Nov. 30th, 2009
ANTAMINA’S EXPANSION REACHES US$380 MILLION,
ACCORDING TO XSTRATA
The 50,000 ton expansion in copper concentrate of the Antamina copper-zinc
mine will require an investment of US$380 million, according to Charlie
Sartain, CEO of Xstrata Copper, Brisbane, during his presentation in London
last 3 December.
Xstrata is one of the four partners of Cía. Minera Antamina. The other
partners are BHP Billiton, Teck Cominco and Mitsubishi.
The executive also confirmed that the approval to go ahead on this expansion
project will be given before the end of this December, with only some details
left to be confirmed. One of them was the investment that is required, which is
much less than it had initially surpassed (US$1,000 million).
st
As such, Xstrata confirmed that the project’s construction will start in the 1
quarter of 2010 and last until the second semester of 2012. The plant is
projected to be ready by the 4th quarter of 2012.
The project is designed to increase the capacity of the concentrator plant by
38%, from 94,000 tpd to 130,000 tpd. This will allow the additional established
reserves up to the previous year to be processed, which have increased the
total reserves of the mine by 77% from 420 million tons to 745 million tons.
Xstrata Copper, a division of Xstrata Group, is dedicated to the production,
smelting and refining of copper in Peru and other 7 countries.
Peruvian South Division to increase production by 445%
Sartain pointed out that Xstrata’s División Sur del Perú will increase their
copper production for the year 2015 by 445% due to the start up of the
Antapaccay (Cusco) and Las Bambas (Apurímac) projects, which will
provide 160,000 tons and 324,000 tons respectively.
This means that División Sur del Perú will surpass the production of 110,000
tons with just 1 mine (Tintaya) to 600,000 tons with 3 operational mines. The
participation and expansion of Antamina has not yet been taken into
consideration.
…go to index
536 / Nov. 30th, 2009
METAL MARKETS
Commodities
GOLD (US$/oz.tr)
SILVER(US$/oz.tr)
COPPER (US$/tonne)
LEAD (US$/tonne)
ZINC (US$/tonne)
TIN (US$/tonne)
METAL PRICES
2007 (1)
2008 (2)
697.1
872.3
13.4
15.0
7,139
6,959
2,594
2,088
3,257
1,880
14,492
18,455
2009 (3)
937.4
13.9
4,766
1,574
1,565
13,194
Last (4)
1161.3
18.5
7,026
2,301
2,354
15,130
(1) 2007 average price
(2) 2008 average price
(3) January-October 2009 average price
(4) Closing price 04/12/09
Source: LMEX. NYMEX
LIMA STOCK EXCHANGE
Go to www.minerandina.com/datosbolsaI.html to view the stock
prices of mining companies and juniors listed on the Lima Stock
Exchange
…go to index
537 / Nov. 30th, 2009
in brief… in brief … in brief …
Copper
The Government cancels Inca Pacific contract for Magistral
Inca Pacific Resources Inc., Vancouver, a mining company that is developing
the Magistral copper-molybdenum project in the Ancash Region, informed that
the state company Activos Mineros SAC has decided to cancel its contract,
arguing that the company has not fulfilled the US$3 million financing
corresponding to the second investment year.
Activos Mineros SAC is responsible for supervising and auditing privatization
contracts of the above mining project.
Inca Pacific stated that the Peruvian State is wrong in its assertions and has
appealed against the decision. It will try to resolve the impasse and will evaluate
its options to continue developing the project.
Strait Gold obtains financing to explore Alicia
Strait Gold Corporation, Toronto, a junior mining company that is exploring the
Letra Rumi (Ancash) and Alicia (Apurímac) copper projects, announced that it
has closed the first tranche of a private placement for C$268,900. These
earnings will finance the exploration of the second project, which it recently
acquired from Panoro Minerals, another junior.
Tamerlane seeks financing for Los Pinos project
Tamerlane Ventures Inc., Blaine (USA), a junior mining company that is
exploring the Los Pinos copper project in Cañete (Lima), informed on its
intention to carry out a private shares placement for C$1.1 million, which is
6,111,111 shares at a unit price of C$0.18 per share. The earnings will be used
as working capital.
Precious Metals
Rio Alto raises C$6,136 million from Peruvian investors
Rio Alto Mining Limited, Calgary (Canada), a junior mining company that is
aiming to start the La Arena (La Libertad) gold oxides project, announced that it
has completed a private shares placement on the Vancouver Stock Exchange
for an amount reaching C$6,136 million, double the amount initially offered. The
acquisition was made by Peruvian investors.
The earnings will be designated for the project’s construction, with the objective
of starting operations end 2010.
Century Mining expects to raise US$54 million before Christmas
Century Mining Corporation, Blaine (USA), a gold producer that operates the
Lamaque (Canada) and San Juan (Arequipa) mines, reported that it is working
hard on compiling the documentation that will allow it to take a bank loan of
US$33 million. A private placement for US$21 million will be added to this.
The company foresees that both operations will be completed before Christmas.
The earnings will be used on the reopening of the Lamaque mine and on the
announced expansion project of San Juan. San Juan produced 63,124 ounces
and 14,252 ounces of gold in 2007 and 2008 respectively.
Duran closes private placement for US$750,000
538 / Nov. 30th, 2009
Duran Ventures Inc., Toronto, a junior mining company exploring for base and
precious metals in the Ancash Region, informed that it has completed the final
tranche of a private placement reaching C$750,000. In this second and
concluding tranche, the company raised C$495,000, which will be used in the
exploration of its Aguila and Pasacancha projects in Peru.
Andean American increases Invicta’s resources
Andean American Mining, Vancouver, a junior mining company that is
developing the Invicta and Sinchao gold projects in Lima and Cajamarca
respectively, reported that it has received the updated resource report of Invicta.
The report states that there is an increase of 35% of measured and indicated
resources, lengthening the useful life of the mine to 5 years.
According to the report done by Discover Geological Consultants, Inc.,
Vancouver, Invicta hosts 10.7 million tons @ 2.05 gr/t Au, 16.08 gr/t Ag and
0.43% Cu, in the measured and indicated categories. According to previous
reports, it hosted resources of 7.9 Mt @ 2.11 gr/t Au in the same categories. All
the resources have been established in the Atenea vein.
Phosphates
Lara pays royalties to Sprott Resources for Mantaro phosphate
project
Lara Exploration Ltd., Vancouver, informed that it has signed a Letter of Intent
with Sprott Resource Corp., Toronto, to transfer 0.5% of royalties to it for the
Mantaro phosphate project in the Junin Region. Lara will receive 50% of the stake
that Sprott holds in the “Strategic Alliance” formed by both companies in
November 2008.
This Strategic Alliance operates in Brazil and Colombia, particularly on the
Sergipe (Potassium) project north of Brazil, in a uranium prospect in Colombia,
and within a portfolio of rock phosphate prospects in both countries.
Production
Peru continues to be the top global producer of silver and
tellurium
Henry Luna, director of Mining Promotion of the Ministry of Energy and Mines,
reported that Peru will continue as the top producer of gold, zinc, tungsten, lead,
bismuth, tellurium and indium in Latin America, and as the top global producer in
silver and tellurium.
He added that Peru has maintained its second position in zinc production and
third position in copper production globally, similarly to 2008. The national metal
production comes from 411 mining units.
… and the number of junior mining companies in Peru reaches 100
Henry Luna also stated that there are 100 junior mining companies operating in
Peru, coming from Canada, Australia, England, China and the United States.
These companies search, prospect, and explore on 584 properties in different
parts of the national territory.
…go to index
539 / Nov. 30th, 2009
IIMP TO MODERNIZE “MODEL MINE” OF THE PARQUE DE LAS
LEYENDAS
Next February, the expansion and modernization work of the “Model Mine” of
the Parque de Las Leyendas will begin, Anibal Campos, the President of the
Institute of Mining Engineers of Peru, IIMP, said during the ceremony of the
th
35 Anniversary for the creation of the Model Mine, in November 1974.
The improvements will include the fitting out and construction of scale-models
of the most significant mining works that occurred in the sector in the last few
years – Antamina’s mining duct, Cerro Lindo’s (Milpo) seawater desalination
plant and the San Jose water reservoir of Minera Yanacocha.
These works will better inform on the benefits that are being offered in the
mining sector to the populations and localities within the area of influence, and
to the economy of the country. Presently, it is providing a lot of educational
benefits through the simulation of an underground operation and an open pit
model.
The initiative of a Model Mine in the Parque de Las Leyendas came from Jorge
Vargas Fernández, who was then an official from the Ministry of Energy and
Mines. Presently, it is being managed by IIMP.
…go to index
540 / Nov. 30th, 2009
MinerAndina International
Chile
BARRICK AND KINROSS FINALIZES FEASIBILITY OF CERRO
CASALE
Barrick Gold Corp., Toronto, the largest global gold producer, may decide to
construct its Cerro Casale copper and gold project next year with a total
investment of US$3,500 million.
Barrick has just finalized the project’s basic engineering or feasibility study,
indicated Igor Gonzales, a Peruvian, who is the vice-president of the gold
company in South America. Barrick is an equal partner with Canadian firm
Kinross Gold Corp (Toronto).
Cerro Casale’s production – whose reserves have reached 23 million ounces of
gold and 6,000 million pounds of copper – could reach 800,000 ounces of gold
annually and 220 million pounds of copper. “The gold market is coming back very
strongly”, said the executive.
The project is located in the Third Region, in the central part of the north of Chile,
and 145 km southeast of Copiapó city.
The executive indicated that Barrick also hopes to formalize the purchase of the
El Morro copper and gold deposit by next January from Swiss group Xstrata
Copper Plc. for US$465 million. Both companies hope to present the technical
details of the project’s final feasibility study in the first few months of 2010. The
information will include the economic parameters and the recommendations for
its development. Meanwhile, the companies will continue to apply for the permits
and to develop the engineering work for the project.
Barrick and Kinross are investing at least US$50 million in 2010 on support work
and to advance the initiative. In April this year, the Regional Environmental
Commission (Corema) of the Atacama Region gave their approval for the
development of the extensive exploration program on Cerro Casale. More than
US$9 million will be invested on this.
…go to index
541 / Nov. 30th, 2009
EXPOMIN 2010 TO BE THE BIGGEST IN ITS HISTORY
Santiago, 12 – 16 April 2010

To date: 85% of its
space taken up

More than 5000 brands
from 35 countries

60,000m2 of total area
With the participation of new countries like Italy, France and the United
Kingdom, there are 960 companies that will be present in EXPOMIN 2010,
one of the biggest expositions in Latin American mining.
The expectations that come with every edition of EXPOMIN from the mining
market will make this 11th edition the biggest in its history. Hence, with 5
months into preparations, EXPOMIN 2010 has 85% of its exhibition space
already being taken up.
EXPOMIN 2010 will be held at the Espacio Riesco Convention Center in
Santiago, and it will receive some 60,000 professionals and more than 5,000
brands from 35 countries, and house more than 1,200 companies distributed
across a space of 60,000m2.
“In the last few years, Latin America has become the most significant metalproducing region in the world – as the main destination for project exploration
and development investments and as the third focal point of world-class
mining companies and suppliers, with many of them using Chile as a platform
country. In this context, the challenge for 2010 is that EXPOMIN continues to
be central to the global mining sector. We have the experience, a strong track
record and most importantly, leading institutions from the sector that are
participating and playing the main role in its development”, said Carlos
Parada, Executive Director of EXPOMIN 2010.
EXPOMIN has maintained its leadership position among mining expositions, a
position that is earned by being a representative exhibition of available
technological innovations and attracting all the industry suppliers that offer the
widest range of products and services to optimize the extraction and
production processes of copper.
In the 10th edition of EXPOMIN in 2008, there was a record attendance of
51,000 professionals, 34,000 accredited, and business projections of
US$1,300 million, which surpassed all expectations.
…go to index
542 / Nov. 30th, 2009
Statistics
Energy Production in the Electric Market (MW.h)
Company
January
2008
2009
1 EDEGEL S.A.A.
666,795
690,272
2 Electroperú S.A.
566,870
3 Energía del Sur S.A.
Var%
January - October
Var%
2008
2009
4
6,837,636
6,602,671
-3
607,361
7
5,708,515
5,895,801
3
455,186
495,886
9
3,984,306
4,016,033
1
4 Duke Energy International
196,830
165,463
-16
1,940,890
1,766,033
-9
5 TERMOSELVA S.R.L.
111,624
112,873
1
1,014,859
916,780
-10
98,967
97,426
-2
873,729
954,824
9
61,819
66,055
7
580,899
455,607
-22
64,028
65,363
2
626,540
631,927
1
70,651
65,158
-8
784,538
622,236
-21
38,230
41,269
8
444,716
432,725
-3
55,583
35,750
-36
606,062
587,622
-3
247,985
175,677
-29
2,077,637
2,641,055
27
-0.6 25,480,326 25,523,313
0.2
6 Empresa de Electricidad de los Andes
7 Empresa Eléctrica de Piura
Empresa de Generación Eléctrica Machupicchu
8 S.A.
Empresa de Generación Eléctrica de Arequipa
9 S.A
Empresa de Generación Electrica de Cahua
10 S.A.
Empresa de Gerneración Eléctrica San Gabán
11 S.A.
12 Otros
TOTAL
2,634,568 2,618,555
Source: Ministerio de Energía y Minas
…go to index
543 / Nov. 30th, 2009