Mine Updates Pinto Valley PV3 Optimization – Phase 1 and Phase 2 Update
Phase 1 is focused on achieving reliable capacity at 57k tonnes per day (“tpd”) without major investments in new comminution equipment. In mid-July, Pinto Valley successfully completed over half of Phase 1 work by installing the first of two secondary crushers, three secondary screen decks, as well as the first of two new ball mill shells. The balance of work is on track for completion in Q4 2020 and Q1 2021 with the second secondary crusher and six tertiary screen decks scheduled to arrive later this year and the second ball mill shell scheduled for early 2021.
Phase 2 looks to identify additional opportunities to debottleneck throughput while optimizing flotation plant performance. The target is to secure daily rates of up to 70k tpd along with 85% or higher copper recovery. Some of the scope for Flotation Plant performance will be implemented across the second half of 2020. This includes flotation bank controls, flotation operator training and right-sized rougher concentrate pumps. Additional studies include enhancements to regrind capacity, concentrate dewatering and handling and at the tailings thickener area.
The PV3 Optimization Study is scheduled for release in Q4 2020.
Pinto Valley to Expand Copper Cathode Production
As an extension to the PV3 Optimization strategy, the Company announced on July 27, 2020, that Pinto Valley has successfully demonstrated positive economics from increased dump leach performance using a novel patented catalytic technology developed by Jetti Resources, LLC. In 2019, Jetti started deploying its technology at Pinto Valley’s leach operation, and one year later, cathode production per area irrigated has doubled. A plan to increase cathode production is being implemented, with the goal of generating high margin from material that would have been waste at Pinto Valley’s underutilized 25 million pound per year electrowinning plant, currently operating at only ~20% of capacity. The plan is to increase cathode production to 300-350 million pounds from residual and high-grade waste over the next two decades, creating 30 new jobs. An updated NI 43-101 Technical Report is expected in 2021.
Cozamin Expansion: 50% Increase to Copper and Silver Production in 2021+
The temporary COVID-19 related ramp down in Q2 2020 did not delay the development of Cozamin’s one-way ramp, which continues to be on schedule and on budget, expected to be completed in December 2020 and ready for 2021. Production in 2021 and beyond, is expected to increase to a new life of mine annual run rate of approximately 50-55 million pounds of copper and 1.5 million ounces of silver.
During the temporary six-week ramp down, minimal operations safely continued and mining was focused on copper-rich areas, rather than the San Rafael zinc zone, which proved to be a successful trial for our 2021+ production profile. The ore mined during this period is the same type of feed we expect to transition to in 2021. The mill averaged 3,800-3,900 tpd during the days it operated and realized copper recoveries of approximately 96% and silver recoveries of 83%.
Cozamin Expands Resource Estimate by 66%
In June 2020, the Company announced the results of an updated Mineral Resource estimate for Cozamin. The total Measured & Indicated (“M&I”) Mineral Resource Estimate tonnes increased by 66%, with an 83% increase to contained copper metal to 949 million pounds and a 71% increase to contained silver metal to 39 million ounces of silver. M&I Mineral Resource for Vein 20, the principal zone in the Mala Noche Footwall Zone (“MNFWZ”), increased by 118% to 13,086 kt at 2.35% Cu and 52 g/t Ag. The Company is currently updating Mineral Reserves and the results of an updated technical report is expected to be announced in Q3 2020.
Cozamin Resumes Exploration Drilling
Exploration drilling at Cozamin was suspended during the six-week ramp down period and has since resumed to execute on an exciting catalogue of exploration targets. Three drills are currently working to infill high grade areas of future reserve target within the new Mineral Resource and trim up open areas immediately on the periphery of the Mineral Resource, to step out up-dip from the high grade Mineral Resource into untested territory and to step out to the southeast across an inferred fault testing a transition from zinc to copper-silver at depth.
The exploration team is currently evaluating a step-out target list for 2021 beyond the MNFWZ system to test our large land package surrounding the current mine. An easy target in 2021 will be Vein 10, located in the hanging wall to the main ore zone, Vein 20. Every hole targeting Vein 20 must first cut Vein 10 in areas of Pb-Zn-Ag-Au mineralization.
Santo Domingo Fulfils Environmental Permit Early Works Requirements
During Q2 2020, Santo Domingo started a limited series of early works, including flora and fauna rescue and site entrance and access roads, in order to preserve the existing Environmental Impact Permit (RCA). These opening works are included in our 2020 budget and are prescribed in the environmental permit and serve to maintain the validity of the permit and are scheduled for completion in Q4 2020.
Activity and interest in participating in the project via the strategic sales process have increased in Q2 2020. In addition, we have received substantial interest in sharing or mutually developing off-site infrastructure that is delineated in the NI 43-101 Technical Report and valued at approximately $500 million. Ongoing discussions and negotiations are progressing with the objective of substantially reducing the project capital costs and operational risk, while maintaining the Life of Mine profitability.