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Thursday, January 21, 2010
Today's News Headlines
* Spence strike, Olympic Dam drop BHP Billiton's copper output 12% in recent quarter - Chile, Peru
* Samarium Group will operate Frontino Gold Mines for four years - Colombia
* Minerven feeling positive about 2010 - Venezuela
* Toyota takes 25% of Salta lithium project - Argentina
* Junior roundup: Andean Resources, NGEx, Trevali, Grenville, New Dimension - Regional
* Chinalco holds public hearing on Toromocho EIS - Peru
* Argentex eyes Q2 scoping study at Pingüino - Argentina
* RiskMetrics recommends Canplats security holders approve arrangement with Goldcorp - Mexico
* Carpathian aims to complete Riacho Dos Machados feasibility study in Q2 - Brazil
* Comibol launches bidding on 250t of electrolytic copper - Bolivia
* IN BRIEF Silver Standard CEO Quartermain steps down - Regional
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* Spence strike, Olympic Dam drop BHP Billiton's copper output 12% in recent quarter - Chile, Peru
Anglo-Australian mining and resources giant BHP Billiton (NYSE: BHP) reported its copper production slipped 12% to 271,100t in the three months ended December 31, the second quarter of the company's 2010 fiscal year.
The drops were a result of a strike at the Spence mine in Chile that cost the company some 28,000t and an incident at Olympic Dam in Australia that reduced output by roughly 20,000t, the company said in a statement.
The reductions were partially offset by stronger production at Escondida in Chile thanks to higher grades and the return to full operation of the Laguna Seca SAG mill after repairs in the September quarter, the statement said.
BHP Billiton's 57.5% stake in Escondida contributed 130,600t of copper in concentrate and 45,900t in cathode in September-December 2009, compared to 102,700t and 42,100t year-on-year.
Escondida also gave BHP Billiton 20,924oz of gold and 825,000oz of silver in the December quarter.
The company's 33.8% of Antamina in Peru contributed 26,600t copper in concentrate, down from 28,600t, and 41,511t zinc, up from 23,671t, thanks to better grades. Silver from Antamina amounted to 1.36Moz.
The 100% owned Spence and Cerro Colorado mines in Chile produced 18,800t and 21,600t copper in cathode, respectively, down from 44,500t and 26,300t year-on-year.
To read BHP Billiton's full production report, go to this link (http://www.bhpbilliton.com/bbContentRepository/docs/bhpBillitonProductionReportForTheHalfYearEnded31December2009.pdf)
By Business News Americas staff reporters
* Samarium Group will operate Frontino Gold Mines for four years - Colombia
Canadian investment group Samarium Group Holding has signed an agreement with workers from Colombian company Frontino Gold Mines (FGM) to manage the miner for four years, a FGM union official told BNamericas.
"During this period Samarium must take control of Frontino, pay its debt with pensioners and increase production," the union representative said.
Samarium signed an agreement for exclusive management with Frontino's owners - who are its workers - and creditors after being chosen from a group of several interested companies, including Toronto-based Medoro Resources (TSX-V: MRS).
FGM workers representative Francisco Jaramillo previously told BNamericas that companies interested in partnering with Frontino would be required to invest at least US$250mn in the company.
"We must fulfill our obligations to the company's 1,300 retirees to whom we owe roughly US$140mn. This is what we would have to immediately pay to make the company profitable," Jaramillo said at the time.
Samarium will also have to invest some US$6mn to open the main tunnel at the company's El Silencio mine, put US$15mn towards upgrading the company's hydroelectric plants, improve mine vehicles and refurbish mine equipment.
El Silencio alone has several hundred thousand ounces of gold and with proper investment the company can reach the lower levels of the mine, which have high grades, Jaramillo previously said.
FGM, which is headquartered near Antioquia department's Segovia city, also owns the Providencia, Sandra K and Cristales mines, among others.
By Harvey Beltrán
Business News Americas
* Minerven feeling positive about 2010 - Venezuela
Venezuelan state gold miner Minerven has a very positive outlook for 2010 thanks to several projects it expects to start up this year, mainly in the southern tip of Bolívar state, company president Luis Herrera told BNamericas.
"We plan to develop more than 10 additional projects and expectations are very high," he said.
According to Herrera these projects will be developed under an agreement that Minerven signed with Cuba's geology, mining and salt company Geominsal to jointly review gold reserves in the El Callao mining district.
Cuban experts will carry out studies on 48,000ha of land that Minerven holds with the aim of increasing resources from the current 11Moz.
"Our goal this year is to explore 1,000m down," Herrera added.
In 2008 the Venezuelan government used Minerven to take over the Sosa Méndez gold mine that was previously controlled by Chinese company Shandong Gold, along with the Revemin mill previously held by Canada's Crystallex International (TSX: KRY).
Minerven also resumed control of Block B that is composed of the La Laguna, Santa Rita, Panamá and Isidora gold mines. The area had been under the management of Minera Hecla Venezolana, a subsidiary of Hecla Mining (NYSE: HL).
The Venezuelan miner also controls the Colombia and Unión mines and is currently carrying out new studies to locate more reserves within the concession area it holds.
Minerven is a subsidiary of state heavy industry holding company CVG.
By Harvey Beltrán
Business News Americas
* Toyota takes 25% of Salta lithium project - Argentina
Australian miner Orocobre (ASX: ORE) took an important lead in the race between a dozen junior mining companies to develop lithium projects in South America. On January 19 the firm announced an agreement to sell to Toyota Tsusho Corp, part of Japanese auto giant Toyota Motor Corp, 25% of the Salar de Olaroz lithium-potash project located in Argentina's Salta province, near the border with Chile and Bolivia.
The project will require investment of around US$100mn and, according to an Orocobre presentation, a decision on when to begin construction will be made this year.
Under the agreement, Toyota Tsusho will provide US$4.5mn to fund the completion of a feasibility study and other pre-development activities at Salar de Olaroz, the Australian company said in a press release. Orocobre will retain the other 75%.
The plans of many auto companies to launch hybrid and 100% electric vehicles in the coming years has inspired investors to take another, harder look at lithium projects.
More than half of the world's current lithium production comes from the Atacama salt flat in Chile where SQM (NYSE: SQM) and Sociedad Chilena del Litio operate, and the Hombre Muerto salt flat in Argentina, where FMC Lithium operates.
Edward Anderson, CEO of TRU, one of the most important specialized lithium consultancies in the world, estimates that the demand for lithium coming from battery manufacturing will grown by around 15.6% annually until 2020, when lithium battery manufacturing will make up 39% of total lithium consumption, versus the 20% it currently accounts for.
According to TRU's latest forecast, current lithium production capacity slightly exceeds demand, and will continue to do so until 2013. From 2013 until 2018-20, the consultant expects a stable market thanks to current producers' ability to expand output. After this point, however, a new project will need to start producing.
Developing and starting up a lithium project using salt brine from a salt flat takes approximately eight years, he said.
BNamericas will publish a detailed report on the future of lithium in South America as part of its Mining Intelligence Series in the last week of January. Also, the full interview with Edward Anderson will be published in this Friday's Perspectives.
By Raúl Ferro
Business News Americas
* Junior roundup: Andean Resources, NGEx, Trevali, Grenville, New Dimension - Regional
Australia's Andean Resources (TSX, ASX: AND) reported the latest results from ongoing drilling at its Cerro Negro project in southern Argentina include 4m of 10.9g/t gold and 6g/t silver, 18m of 20.6g/t gold and 33g/t silver as well as 6m of 41.8g/t gold and 81g/t silver at the Mariana Norte target.
Five RC holes at Mariana Norte identified three veins below surface. At the San Marcos veins, a step out hole 100m east of known mineralization has returned 3m grading 13.7g/t gold and 9g/t silver.
Andean is working on finishing an updated resource estimate for Cerro Negro during Q1 on which it will base a feasibility study due in Q2.
***
Vancouverite NGEx Resources (TSX: NGQ) reported drilling is underway at its Los Helados copper-gold JV in northern Chile's region III and will cover 3,800m in six or seven holes.
Japan's JOGMEC holds 40% of Los Helados.
NGEx also said it has finished drilling seven holes totaling 2,253m at the nearby Josemaria project, with assay results expected at end-January.
***
The latest assays from drilling at Vancouver-based Trevali Resources' (Pink Sheets: TREVF) Magistral North deposit, part of the Santander silver-lead-zinc property in Peru, showed 31.8m grading 118g/t silver, 4.86% lead and 7.46% zinc, the company said in a statement.
Additional highlights include 16.2m at 72.4g/t silver, 5.81% lead and 7.43% zinc. Meanwhile, drilling at the Puajanca South zone has further expanded mineralization along strike and at depth. Results include 6.7m grading 81.9g/t silver, 3.37% lead and 5.8% zinc.
Trevali is working on an updated resource estimate and preliminary economic assessment (PEA) for Santander.
***
Vancouver's Grenville Gold (TSX-V: GVG) reported it has received a recommendation from its qualified person to carry out an extensive surface and underground exploration program at its Silveria property in Peru.
The idea is to test targets at all accessible veins and adits apart from the Reserva vein, where sampling has already been carried out, Grenville said in a statement.
The aim is to establish NI 43-101 compliant resources on the property.
***
Vancouver-based New Dimension Resources (TSX-V: NDR) has arranged a non-brokered private placement of up to 2.2mn units worth Cdn$550,000 (US$525,043).
Net proceeds will be used at the company's exploration projects, to fund possible acquisitions and for general working capital.
New Dimension's focus is the Cenepa gold project in northern Peru and opportunities throughout the Americas.
By Business News Americas staff reporters
* Chinalco holds public hearing on Toromocho EIS - Peru
Chinese-owned Chinalco's subsidiary Chinalco Perú on January 15 held a public hearing regarding its Toromocho copper project in Peru, state news agency Andina reported.
The hearing was required by the mines and energy ministry's (MEM) environmental and mining issues office (DGAAM) as part of the EIS approval process for the project.
The meeting took place in Junín region's Morococha and some 1,800 people, including regional president Vladimiro Huaroc, were in attendance, the report said.
The hearings are part of the citizen participation plan during the evaluation process of every EIS, allowing locals the opportunity to make comments or observations about projects, and are scheduled by MEM via DGAAM, the report said.
Chinalco has said it plans to start building the mine in 2010. The concentration plant at Toromocho will have an average capacity of 117,000t/d, yielding 1Mt/y of concentrates. Total capex on the project is slated at US$2.2bn.
By Business News Americas staff reporters
* Argentex eyes Q2 scoping study at Pingüino - Argentina
Vancouver's Argentex Mining (TSX-V: ATX) reported it expects a preliminary economic assessment to be complete by the second quarter of 2010 on its Pingüino polymetallic project in Argentina's Santa Cruz province.
A diamond drill program is underway and will continue into Q2 to provide data for an updated resource estimate during that quarter, Argentex said in a statement.
The program began in December at Pingüino's Marta Norte zone and has covered 14 holes totaling 607m so far. Assay results are expected in February.
Soil sampling and trenching at new Marta Norte targets is also ongoing.
A September 2009 estimate showed 35.4Mt grading 4.0oz/t (124g/t) silver equivalent in the inferred category and 7.32Mt at 5.5oz/t in the indicated category. The calculation contemplated silver, gold, lead, zinc and indium mineralization.
By Business News Americas staff reporters
* RiskMetrics recommends Canplats security holders approve arrangement with Goldcorp - Mexico
Vancouver's Canplats Resources (TSX-V: CPQ) said in a release that compatriot independent proxy advisory firm RiskMetrics Group has published a report recommending that its clients holding Canplats securities vote in favor of the acquisition of Canplats by Goldcorp (TSX: G, NYSE: GG).
Under the deal, holders of Canplats common shares will receive Cdn$4.60 in cash and a common share with a notional value of Cdn$0.20 in Camino Minerals Corporation, a new exploration company, for each Canplats share held, the release said.
Canplats' board has recommended that security holders vote in favour of the resolution approving the takeover at a special meeting scheduled for January 28, according to the release.
In November Goldcorp signed an agreement to acquire Canplats in a deal worth about US$230mn. However, later Minera Penmont - a JV between Mexican silver producer Fresnillo (LSE: FRES) and US corporation Newmont Mining (NYSE: NEM) - trumped the offer but since then Goldcorp has raised its own offer and Penmont's bid is no longer higher.
Canplats' main asset is the Camino Rojo gold-silver project in Mexico, which Goldcorp intends to add to its portfolio in order to expand resources at its Peñasquito mine.
Located some 50km from Peñasquito in Zacatecas state, Camino Rojo has 3.45Moz gold and 60.7Moz silver in measured and indicated resources, and 555,000oz gold and 7.61Moz silver inferred.
By Business News Americas staff reporters
* Carpathian aims to complete Riacho Dos Machados feasibility study in Q2 - Brazil
Toronto-based Carpathian Gold (TSX: CPN) has completed a phase II drill program at its Riacho Dos Machados gold project in Brazil's Minas Gerais state which is part of an ongoing feasibility study that Carpathian expects to be completed in Q2, the company reported in a release.
A total of 151 holes were completed covering 20,770m, principally infill drilling along the 1,250m existing open pit to convert inferred resources to measured and indicated resources within the newly defined open pit established from the NI 43-101 compliant preliminary economic assessment (PEA) announced last August, and further define gold-mineralized strike extensions, the release said.
Results included 14.6m at 2.46g/t gold, including 1.9m at 9.92g/t; 15.4m at 3.67g/t, including 4.8m at 9.11g/t; and 7.9m at 4.73g/t, including 1.6m at 20.5g/t.
"We believe that the drilling results from the infill drill program have demonstrated the grade continuity required to upgrade the inferred resources to the measured and indicated category," CEO Dino Titaro said.
"In addition, the gold mineralization drilled along the strike extensions now demonstrates continuous mineralization over 2,100m and remains open further along strike and at depth. The resource estimate update will be an integral part of our feasibility study, which is progressing well and is targeted for completion in the second quarter of this year," he added.
In December 2009, the feasibility study was awarded to a consortium led by Tecnomin Projectos e Consultoria, which is the same group that completed the PEA. Present activities underway include a geotechnical drilling program, geologic modeling and resource estimation to produce a resource estimate, mine layout and infrastructure design, the release said.
Riacho Dos Machados is a 22,000ha parcel comprising 12 exploration licenses and one mining concession that hosts a past producing open-pit gold mine, which was previously operated by local giant Vale (NYSE: VALE) in 1989-97 and from which oxide gold ore was mined to maximum depths of 60m. Carpathian acquired 100% of the project in October 2008.
Last August Carpathian reported in a release that Riacho dos Machados had the potential to yield an open-pit mine with production of 102,000oz/y for seven years.
The company projected an after tax internal rate of return of 32%, with a payback on project capital expenditures in about three years, assuming a gold price of US$900/oz.
By Business News Americas staff reporters
* Comibol launches bidding on 250t of electrolytic copper - Bolivia
Bolivian state miner Comibol has launched the bidding for 250t of 99.9% pure electrolytic copper from the Corocoro project, local press reported.
Those interested in purchasing the copper should make offers before February 1 and be prepared to pay cash up front and the metal will be handed over immediately.
In October, Corocoro started producing copper cathodes at its US$18.5mn hydrometallurgical plant, and is currently churning out 5t/d, although its total electrolytic copper capacity is 11t/d, reports said.
The plant produces electrolytic copper from strippings and tailings leftover from old copper mining operations in the area.
The plant's opening marks the end of the first stage of the Corocoro project. The second phase involves restarting operations at the mine via a JV contract between South Korean state company Korea Resources (Kores) and Comibol.
By Business News Americas staff reporters
* IN BRIEF Silver Standard CEO Quartermain steps down - Regional
Vancouverite Silver Standard Resources (TSX: SSO) reported that president and CEO Robert Quartermain has resigned from his post effective January 19.
Quartermain has been with the company for 25 years and will remain on the board.
Silver Standard director AE Michael Anglin will serve as interim president and CEO while the company looks for a replacement.
In early December Silver Standard reported it had reached commercial production at its Pirquitas mine in northwest Argentina's Jujuy province. Pirquitas is the company's first producing mine and has capacity of 10Moz/y.
In Latin America the company also has the development stage Pitarilla in Mexico, San Luis in Peru and Diablillos in Argentina, and exploration projects in Peru, Chile and Mexico.
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,/170884441
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Main companies covered in today's news
* MAG Silver Corp.
http://www.bnamericas.com/company-profile/en/MAG_Silver_Corp,-MAG_Silver/170884441
* Carpathian Gold Inc.
http://www.bnamericas.com/company-profile/en/Carpathian_Gold_Inc,-Carpathian_Gold/170884441
* Goldcorp Inc.
http://www.bnamericas.com/company-profile/en/Goldcorp_Inc,-Goldcorp/170884441
* Grenville Gold Corporation
http://www.bnamericas.com/company-profile/en/Grenville_Gold_Corporation-Grenville_Gold/170884441
* Hecla Mining Company
http://www.bnamericas.com/company-profile/en/Hecla_Mining_Company-Hecla/170884441
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