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Wednesday, January 20, 2010
Today's News Headlines
* Codelco's Radomiro Tomic posts record output in 2009, earmarked for investments - Chile
* EDITORIAL COMMENT: Codelco's future under Piñera, more of the same? - Chile
* Junior roundup: Magellan, Avanco, Grayd, MAG, Geologix, Arian, PBX - Regional
* Jaguar ups Q4 output, but 2009 production below guidance due to Sabará - Brazil
* Coltan reserves may be worth US$100bn, says Chávez - Venezuela
* Codelco workers reject privatization, want greater reinvestment - Chile
* Mitsui considering investment in copper mining in country - Peru
* Minera Invierno submits EIS for Isla Riesco coal project - Chile
* Medoro acquires 93% of Colombia Gold - Colombia, Venezuela
* Exeter board approves proposal to spin-out assets into 2 separate companies - Argentina, Chile
* Tara Minerals begins shipments of Don Román silver-lead-zinc concentrate to Glencore - Mexico
* Xtierra plans to raise US$4.8mn via private placement - Mexico
* Golden ups El Quevar silver resource to 43.4Moz - Argentina
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* Codelco's Radomiro Tomic posts record output in 2009, earmarked for investments - Chile
Chilean state copper company Codelco's Radomiro Tomic mine churned out a record 307,600t of red metal in 2009, above the 304,000t target and up 7.6% over 286,000t in 2008, Codelco said in a statement.
The company aims to again surpass scheduled production of 304,000t in 2010. The increased output is a result of a "long, quiet" process to grow productivity following a substation fire and other damage to equipment a couple of years ago, said Codelco Norte VP Sergio Jarpa.
Investment this year at Radomiro Tomic is slated to reach US$50mn-70mn to pay for storage facilities for materials awaiting leaching and replacement of mining equipment such as loaders, shovels and 11 new 400t trucks. The funds will also cover new technology inside the plant, Codelco said.
The 2010 plan is the start of a five-year investment scheme totaling US$200mn aimed largely at renewing the mining fleet, upgrading technology and improving plants.
Radomiro Tomic sits in northern region II near Codelco's Chuquicamata mine and has been in production for 14 years. The intended lifespan of the mine's original equipment was 14-15 years, the company added.
By Business News Americas staff reporters
* EDITORIAL COMMENT: Codelco's future under Piñera, more of the same? - Chile
In some of his first public comments since being elected president of Chile on Sunday, Sebastián Piñera appears to have already ruled out an attempt to privatize state copper company Codelco during his four-year stint in government that begins in March.
The center-right candidate, who will take the reins after 20 years of center-left government in the form of the Concertación coalition, had previously hinted that he would like to at least partially privatize Codelco, perhaps floating a stake of around 20% to improve the company's market accountability, transparency and allow the private sector - such as the AFP pension funds - to enjoy a share of the copper giant's profits.
Speaking to foreign correspondents on Monday, however, Piñera recognized that to do so would require a constitutional change, something his government will not to be able to realize without the support of the opposition. In fact, the kind of changes he talked about for Codelco, such as the state providing more capital for the company by allowing it to retain some of its profits and reforming the law that mandates that 10% of its export revenues go to the armed forces, have already been enacted to a certain extent by the current government in the first case and pledged in the second, and hardly amount to the "profound changes" Piñera claimed them to be. It could even be argued that changes brought in by the incumbent administration to make Codelco's board more independent are equally if not more profound than those suggested by Piñera.
Codelco is often criticized, especially in the local media, for being less efficient and productive than some of its private sector counterparts. Piñera even made the mistake of saying the company has lost its place as the world's largest copper producer. To be fair to Codelco, many of its mines, especially the bigger ones, are very old - in the case of Chuquicamata and El Teniente around 100 years - compared to most of those operated by private sector companies, especially in South America, and so productivity is perhaps inevitably going to be lower. In addition, and certainly compared to some of the big state companies elsewhere in the region, Codelco is relatively well run and autonomous politically speaking.
That's not to say, however, that Codelco could not be more efficient, or more profitable. Privatizing the corporation is not necessarily the answer, as that is not going to suddenly mean the company's older mines become more productive, and it would be politically very delicate, as most Chileans still see Codelco as "their" company. Not even the Pinochet dictatorship dared to privatize Codelco. However, selling a minority stake, a la Petrobras in Brazil, could be a major step forward, providing the state with funds to invest in the company and at the same time subjecting it more to market forces, allowing the public to truly know the value of their company and to be able to invest in it via pension funds or even as retail investors. It's a pity that, even before assuming office, it looks like Mr Piñera has decided not to take that road.
* Junior roundup: Magellan, Avanco, Grayd, MAG, Geologix, Arian, PBX - Regional
Vancouver-based Magellan Minerals (TSX-V: MNM) reported the results for seven diamond drill holes recently completed at the Moreira Gomes prospect of its Cuiú Cuiú project in northern Brazil, including 17.3m grading 13.7g/t gold and 1.0m at 216g/t gold in the same hole.
Additional highlights include gold grades of 1.19g/t over 38.0m, 2.02g/t over 35.0m and 0.46g/t over 35.0m, Magellan said in a statement.
Another drill program due to start during Q1 will further test Cuiú Cuiú's Moreira Gomes and Central zones and other targets on the property.
***
Geophysical and geochemical exploration programs at Perth-based Avanco Resources' (ASX: AVB) Touro nickel project in Brazil have shown IP anomalies over a 4km trend and helped to identify priority drill targets, the company said in a statement.
Soil geochemistry also identified anomalously high platinum and nickel values, while the only drill hole on the project hit 130m grading 0.09% nickel.
Avanco is working on bringing drill rigs to the project site with a view to drill testing the targets in the coming months, the statement said.
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Vancouverite Grayd Resource (TSX-V: GYD) has received the final assays from 2009 drilling at the Main zone of its La India gold project in Mexico, including 1.97g/t over 62.5m, 1.30g/t over 73.0m and 1.53g/t over 60.4m.
"We have verified the geological model for the resource, extended mineralization and outlined a number of areas with higher grades than previously interpreted," CEO Marc Prefontaine said in a statement.
An update to the February 2009 resource estimate is due during Q1.
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Canada's MAG Silver (TSX: MAG) reported it has discovered an extension to its Veta Grande vein in Mexico's Zacatecas state with two drill holes some 500m east of the vein's last confirmed outcrops.
A 2.8m composite zone showed 17g/t silver at a depth of 275m, while the same zone at a depth of 650m returned 40.8g/t silver, MAG said in a statement.
In addition, two drill holes on the Puerto Rico vein that runs parallel to Veta Grande hit 417g/t silver and 109ppb gold over 1.0m and 850g/t silver and 273ppb gold over 0.95m.
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Vancouver-based Geologix Explorations (TSX: GIX) has completed due diligence and technical reviews of UK-based Arian Silver's (TSX-V, AIM: AGQ) Tepal gold-copper project in Mexico and has notified Arian of its decision to proceed with an option to purchase 100% of the project, both companies reported.
Once a definitive agreement is executed, Geologix said it plans to start geological surveys, trenching and drilling in conjunction with prefeasibility work.
Tepal, in Michoacán state, holds indicated and inferred resources totaling 1.15Moz gold and 413Mlb (187,334t) copper.
***
Vancouver's International PBX Ventures (TSX-V: PBX) reported it has acquired another 2,100ha some 8km west of its Copaquire copper-molybdenum-rhenium property in northern Chile.
The new claims are named Huatacondo.
By Business News Americas staff reporters
* Jaguar ups Q4 output, but 2009 production below guidance due to Sabará - Brazil
New Hampshire-based Jaguar Mining (TSX, NYSE: JAG) reported consolidated fourth quarter production of 39,890oz gold from its Brazilian operations at an average cash operating cost of US$539/oz, compared to 37,916oz gold at US$396/oz year-on-year.
In all of 2009, Jaguar produced 155,102oz gold at an average cash cost of US$468/oz, versus 115,348oz at US$429/oz in 2008.
Guidance for 2009 targeted consolidated production of 165,000-175,000oz, which included 20,000oz for the Sabará operation. However, in 2009 Sabará was idled for eight months and produced only 6,460oz, down from 18,199oz in 2008, the statement said.
After completing a review of Sabará in early-January, management intends to classify the mine as a discontinued operation in 2010 and record a charge against 4Q09 earnings of some US$3.4mn, the statement said.
Jaguar is considering its options for Sabará, which include seeking a buyer for the equipment or relocating the leaching plant to a new site which has considerable oxide resources.
Fourth quarter gold sales rose to 35,944oz at an average price of US$1,099/oz, compared to 4Q08 gold sales of 35,138oz at an average of US$793/oz.
Production guidance for 2010 has been set at 200,000-217,000oz, the statement said.
OUTPUT BY MINE
In Q4, the Turmalina mine produced 21,184oz at average cash costs of US$523/oz, compared to 19,987oz at an average of US$330oz in 4Q08. The stronger Brazilian real against the dollar, as well as lower grades, accounted for the increase in costs, the statement said.
Overall in 2009, Turmalina produced 82,070oz at an average of US$424/oz, versus 72,785oz at an average US$364/oz in 2008.
In the quarter, the Paciência mine produced 18,707oz at an average of US$556/oz, up from 13,423oz at an average of US$413/oz year-on-year.
In 2009, Paciência produced 66,671oz at an average of US$502/oz compared to 24,364oz at an average of US$443/oz in 2008, the first year of operations at the mine.
OTHER PROJECTS
The company also has the Caeté project, which is on schedule for completion in April, and in December Jaguar wrapped up the purchase of MCT Mineração, a subsidiary of Canadian miner Kinross Gold (NYSE: KGC) which holds the licenses for the Gurupi project, for US$39mn in shares. Both are also in Brazil.
Jaguar plans to release its 4Q09 financial and operating results after markets close on March 22, the statement said.
By Business News Americas staff reporters
* Coltan reserves may be worth US$100bn, says Chávez - Venezuela
Venezuelan President Hugo Chávez has announced that according to preliminary technical studies the country may possess coltan reserves worth US$100bn, state news agency ABN reported.
"The price of coltan on the international market is higher than gold and even diamonds... and we may have a giant reserve of this-so called blue gold," he said during a speech in the Venezuelan national assembly.
In October Chávez announced that a major coltan reserve had been discovered and ordered the area to be militarized because of illegal mining in the zone.
Coltan is a conductor used in electronics. Its name is an abbreviation of columbite-tantalite and the world's main producer is the Democratic Republic of Congo.
By Business News Americas staff reporters
* Codelco workers reject privatization, want greater reinvestment - Chile
The federation of labor unions (FTC) at Chilean state copper company Codelco reported it disagrees with the incorporation of any private capital into the state miner and called for greater reinvestment of profits to cover Codelco's US$12bn project portfolio.
President-elect Sebastián Piñera promoted during his campaign the idea of selling a minority stake in Codelco to private investors in a bid to make the state giant more efficient and productive.
However, such a reform would require constitutional change and thus support from Piñera's political opposition, which is generally against the idea.
FTC said in a statement that it rejects such a move, noting that Codelco's contributions to the state treasury are much greater than those paid in taxes by private companies.
The federation also noted that congress recently passed a law saying Codelco must be run independently of the government administration in power, theoretically guaranteeing continuity of operations and good management.
Codelco is the world's biggest copper miner. Piñera was elected in a run-off vote January 17 and will take office in March.
By Business News Americas staff reporters
* Mitsui considering investment in copper mining in country - Peru
Japanese conglomerate Mitsui Corporation is eyeing investments in mining and ethanol projects in Peru in the medium term, Peruvian state news agency Andina reported.
"Our main interest is to bet on a mining project in the country's sierra, specifically in copper, because that metal is very valuable currently and is expected to maintain that tendency in the months to come," the report quoted Mitsui del Perú CEO Yoshinori Takase as saying.
The executive also expressed interest in possibly entering the ethanol business, saying Peru has high production potential. The idea behind these potential investments would be to diversify the company's presence in Peru, which today is weighted toward the infrastructure and automotive sectors, the report said.
In Peru, Mitsui controls the Pallca zinc mine and has a 34% stake in the Quechua copper deposit through Mitsui Mining & Smelting.
Meanwhile, Takase said that Peru's state agency for promoting private investment, ProInversión, has rejected Mitsui's project to build a water desalination plant that would provide potable water to southern Lima, the report said.
"ProInversión has cancelled our private initiative for an 86,400m3/d plant in this part of the capital and, faced with this, we have asked them for an explanation," Takase was quoted as saying.
By Business News Americas staff reporters
* Minera Invierno submits EIS for Isla Riesco coal project - Chile
Chile's Minera Invierno, a subsidiary of Minera Isla Riesco, has submitted to environmental authorities an EIS for a coal mining operation at the Invierno deposit on Isla Riesco in southern region XII.
The project would cost US$180mn to build and produce 6Mt/y of sub-bituminous coal for a mine life of 12 years, based on current reserves of 73Mt, according to the EIS published by Chilean environmental regulator Conama's project evaluating system SEIA.
Construction is slated to take 16 months and begin in the third quarter of 2010, pending environmental approvals.
The EIS foresees employing 630 people during the construction phase and 830 people when the open-pit mine is in operation.
The Isla Riesco coal concessions, which were privatized in 2008, contain more than 1.0Bt of coal reserves among the Río Eduardo, Elena and Estancia Invierno deposits.
Minera Isla Riesco is a JV between fuel distributor Copec and shipping company Ultramar.
By Business News Americas staff reporters
* Medoro acquires 93% of Colombia Gold - Colombia, Venezuela
Toronto's Medoro Resources (TSX-V: MRS) has acquired some 91.9mn ordinary shares of UK-based Colombia Gold, representing over 93% of the company, the Canadian reported in a release.
Holders of Colombia Gold shares will receive 0.338409 of a Medoro common share for each Colombia Gold ordinary share, the statement said.
The deal is part of a plan to consolidate most of the Marmato district mining rights under Medoro's control as last October the company acquired Colombia Goldfields and has signed a non-binding letter of intent to acquire Colombian company Mineros' subsidiary Mineros Nacionales.
"The combined NI 43-101 compliant measured and indicated resource estimate for the Echandia property, acquired through this acquisition of Colombia Gold, and the Zona Alta property, acquired from Colombia Goldfields in October 2009, is approximately 3.4Moz of gold," Medoro CEO John Hick said. "In addition, the combined NI 43-101 inferred resource estimate for both properties is approximately 1.3Moz."
"The company has already started an exploration and infill drilling program on Zona Alta," Hick added.
Earlier this month Medoro reported the results of an NI 43-101 technical report on Echandia showing the property holds 1.08Moz gold and 14.2Moz silver in the measured and indicated category plus 274,000oz gold and 3.09Moz silver inferred.
The M&I ounces are contained in 48.6Mt grading 0.69g/t gold and 9.12g/t silver, while the inferred resources are 10.6Mt grading 0.80g/t gold and 9.04g/t silver.
In order to allow the remaining Colombia Gold holders to tender their shares, Medoro has extended its offer to January 25. Upon acquiring all shares, Medoro will have issued approximately 33.3mn of its common shares.
In addition, Medoro is in the process of paying Cdn$2.8mn (US$2.72mn) of Colombia Gold's debts, the statement said.
Medoro also holds a 100% interest in the Lo Increíble 4A and 4B concessions in Venezuela.
By Business News Americas staff reporters
* Exeter board approves proposal to spin-out assets into 2 separate companies - Argentina, Chile
The board of Vancouver-based Exeter Resource (Amex: XRA, TSX: XRC) has unanimously approved a proposal to undertake a spin out transaction that would separate its assets into two companies, Exeter reported in a release.
Under the terms of the proposed transaction, Exeter will keep all assets relating to the Caspiche gold-copper deposit in Chile, together with approximately Cdn$50mn (US$48.5mn) in working capital, and focus on the project's advancement.
In addition, Exeter will transfer to a new company the Cerro Moro gold-silver project and other exploration properties in Argentina, and some Cdn$25mn in working capital. As a requirement to the closing of the transaction, the new company would need to obtain conditional approval for the listing of its common shares on a major stock exchange, the statement said.
The transaction is subject to shareholder and regulatory approval, including approval of the TSX, the NYSE Amex and the supreme court of British Columbia.
Exeter shareholders will be asked to vote on the proposal at a special meeting scheduled for March 4. The proposal would result in each Exeter shareholder of record, on the effective date of the transaction, receiving one share in the new company for each share held in Exeter.
The new company will focus initially on taking Cerro Moro through feasibility, project financing, development and into production, the statement said. Also, resources are expected to be "significantly" expanded by drilling additional targets yet to be fully explored on the property. In addition, the new company will begin an exploration program on the other Argentine projects, the statement added.
Eric Roth, currently Exeter's mine development manager for Argentina, will be appointed CEO and president of the new company, and Yale Simpson and Bryce Roxburgh will become co-chairmen.
An October 2009 calculation at Caspiche showed 19.6Moz gold, 4.84Blb (2.20Mt) copper and 40Moz silver, or 32.4Moz gold equivalent in the inferred category. Cerro Moro has inferred resources of 371,000oz gold and 19.2Moz silver, or 646,000oz gold equivalent.
Drilling at Caspiche to expand and upgrade the resource estimate began this month, the statement said.
A new Cerro Moro resource estimate is scheduled for April, to be followed by a mine development study in Q2. The studies will form the basis of a mine development decision and the submission of the project to provincial authorities for permitting. Exploration drilling will continue through 2010, according to the statement.
By Business News Americas staff reporters
* Tara Minerals begins shipments of Don Román silver-lead-zinc concentrate to Glencore - Mexico
Tara Minerals (OTC.BB: TARM), a subsidiary of Chicago-based Tara Gold Resources (Pinksheets: TRGD), has started shipping silver-lead and zinc concentrates from the Don Román mine in Mexico to Metagri, a local subsidiary of Swiss company Glencore International.
The Don Román mill has increased throughput levels and is currently operating at the rate of 240t/d, and the company aims to boost mill production levels to 480t/d by Q2, Tara Minerals said in a statement said.
In addition, a new silver, zinc and lead structure has been discovered. Efforts to determine its width are ongoing, and channel samples have been collected with results expected shortly, the company said.
Last month Tara Minerals agreed to sell all of its silver-lead and zinc Don Román concentrate to Metagri. The agreement includes payment of 85% of the final zinc content and 95% of the final lead content, minus quality, shipping and processing costs, and also payment for gold and silver content within the concentrate, the release said without mentioning a price. The agreement is for five years and includes an extension clause.
By Business News Americas staff reporters
* Xtierra plans to raise US$4.8mn via private placement - Mexico
Toronto-based Xtierra (TSX-V: XAG) has arranged a non-brokered private placement of up to 25mn units at Cdn$0.20 each for proceeds of Cdn$5.00mn (US$4.84mn), according to a company statement.
Proceeds will be used to fund further metallurgical testing and feasibility work on the Bilbao silver-zinc-copper project in Mexico's Zacatecas state, and for expenses of the offering, general corporate purposes and working capital, the release said.
The placement is expected to close by the end of February.
Last week Xtierra reported results from oxide metallurgical test work related to a feasibility study on Bilbao with recoveries of 61.2% zinc, 41.0% lead, 66.7% silver, 71.0% copper and 55.0% gold.
Xtierra started the feasibility study in April 2009.
Bilbao has an NI 43-101 compliant 3.6Mt indicated resource with average grades of 3.53% zinc, 2.75% lead, 0.29% copper and 88.2g/t silver and 2.38Mt of inferred resources averaging 2.52% zinc, 2.79% lead, 0.28% copper and 83.08g/t silver, according to the company.
By Business News Americas staff reporters
* Golden ups El Quevar silver resource to 43.4Moz - Argentina
An updated resource estimate for the Yaxtche zone of Colorado-based Golden Minerals' (TSX: AUM) El Quevar project in Argentina's Salta province shows 43.4Moz silver in the indicated and inferred categories.
The calculation increases indicated resources to 0.9Mt grading 412g/t silver, or 11.5Moz, compared to an October 2009 estimate outlining 0.3Mt grading 430g/t silver, or 4.3Moz, Golden said in a statement.
Inferred resources grew to 2.2Mt at 447g/t, for 31.9Moz, compared to the previous 1.6Mt at 415g/t, or 21.9Moz.
The Yaxtche zone estimate uses data from 156 drill holes, including 40 not included in the previous calculation, the statement said. Yaxtche is one of 13 targets at the El Quevar project area but has been the main focus of drilling and remains open along strike and at depth.
Future resource calculations are expected to include another 14 Yaxtche holes, while 2010 drilling is planned to target the Viejo Campo and Quevar Norte areas.
Golden Minerals recently acquired the 35% it did not already own in El Quevar from JV partner Hochschild Mining (LSE: HOC) in exchange for shares, leaving Hochschild with a 9.4% stake in Golden.
By Business News Americas staff reporters
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In-deph interview
* Recently in production and on its way towards growth
Robert Quartermain (part II)
CEO
Silver Standard
http://www.bnamericas.com/interviews/mining/Robert_Quartermain_,part_II,_,Silver_Standard,/170693605
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Main companies covered in today's news
* Hochschild Mining PLC
http://www.bnamericas.com/company-profile/en/Hochschild_Mining_PLC-Hochschild/170693605
* Tara Gold Resources Corp.
http://www.bnamericas.com/company-profile/en/Tara_Gold_Resources_Corp,-Tara_Gold_Resources/170693605
* MAG Silver Corp.
http://www.bnamericas.com/company-profile/en/MAG_Silver_Corp,-MAG_Silver/170693605
* Glencore International AG
http://www.bnamericas.com/company-profile/en/Glencore_International_AG-Glencore/170693605
* Creston Moly Corp.
http://www.bnamericas.com/company-profile/en/Creston_Moly_Corp,-Creston/170693605
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