Huaron (100% Ownership)
Click here for map of Huarón
Location and access
The Huaron underground mine is located in the Andes Mountains of Peru, 320 kilometres northeast of the capital city of Lima. The property consists of 252 concessions spanning 63,822 hectares. It sits in the heart of the Cerro de Pasco district, one of Peru's most important mining regions. Access to the mine is by a 285 paved highway between the city of Lima and the town of Unish and a 35-kilometre road between Unish and the mine, which is currently being paved.
History
Huaron is an underground mine with narrow and wide veins of silver-rich base metal sulphides, as well as replacement mineralization in conglomerates and dissemination in sediments. The mine was built and operated by French Penarroya Company from 1912 to 1987. From 1987 until 1998, the mine was operated by Mauricio Hochschild and Cia Ltda. In April 1998, a portion of the lakebed of nearby Lake Naticocha collapsed and water from the lake flowed into the adjacent Animon mine (operated by an unrelated company) and, through interconnected tunnels, the water flooded the mine.
After the April 1998 flooding, the Huaron mine was shut down, the labour force terminated, the village closed, and work was undertaken to clean up the flood damage, drain the workings and prepare for an eventual mine re-opening. The water level in the lake, which provided the source of floodwater, is currently maintained well below the level where it flooded into the old workings and the Company does not expect a threat of further flooding.
Pan American Silver Corp. acquired a majority interest in the Huaron mine in 2000 and fast-tracked the re-opening project through feasibility, financing and construction to begin full-scale operations in 2001. The Company subsequently acquired the remaining interest and now holds 100% of the property.
Geology
The main lithology in the Huaron area is a sequence of continental "redbeds" consisting of interbedded sandstones, limestones, marls, conglomerates, breccias and cherts of the Abigarrada and Casapalca Formations of Upper Cretaceous to Lower Tertiary age.
The Huaron mine is located within an anticline formed by east-west compressional forces. The axis of the anticline is approximately north-south striking and gently plunging to the north. There are two main fault systems: (1) north-south striking thrust faults, parallel to the axis of the anticline; and (2) east-west striking tensional faults.
The Huaron mine is located within an anticline formed by east-west compressional forces. Huaron is a polymetallic deposit (hosting silver, lead, zinc and copper) consisting of mineralized structures probably related to Miocene monzonite dykes principally within, but not confined to the Huarón anticline. Mineralization is encountered in veins parallel to the main fault systems, in replacement bodies associated with the calcareaous sections of the conglomerates and other favourable stratigraphic horizons, and as dissemination in the monzonitic intrusions at vein intersections.
Mining
The Huaron mine produces silver-rich zinc, lead and copper concentrates, which are sold under contracts in place with arm's length smelters and concentrates traders. Huaron receives payment for an agreed percentage of the zinc, lead, or copper contained in the concentrates it sells after deduction of smelting and refining.
In 2010, ore was extracted from 61 stopes on multiple veins, with approximately 33 stopes being active at any given time (in a range of 31 to 37 active stopes in a given month). The increased mechanization of the mine over the course of the past three years has increased productivity and allowed the number of active stopes at any one time to be reduced from 58 in 2006. The mining method is predominantly cut-and-fill using mill tailings as the backfill material. Production from longhole stoping started in January 2009 and in 2010, a total of approximately 40,200 tonnes of ore were mined from longhole stopes on the Alianza and Llacsacocha veins.
After a technical and economic evaluation was conducted in 2003, an electric locomotive haulage system was installed in expanded tunnels on the 500 level for haulage to the upper parts of the mine. An additional evaluation was undertaken in 2006 to determine whether to use the existing mine shafts (not operative) to replace diesel trucks and reduce mine haulage costs from the lower levels of the mine. During 2009, work to refurbish the D shaft continued and a decline to access the 180 level below the primary 250 drainage level was successfully completed with the construction of a permanent pumping station and back-up power supply. Previous mining went only to the 250 level with the exception of some small scale mining of two veins down to the 220 level.
During 2010, the D shaft refurbishment was completed and the shaft was put into operation. In 2011, it is planned to install an electric locomotive haulage system on the 250 level to connect the D shaft with the North zone and to continue to develop the 180 level. With anticipated completion of the electric locomotive haulage system on the 250 level in 2011, the majority of the ore mined from the north zone below the 500 level will be hoisted to surface and fed by conveyor belt to the crusher and mill.
The 180 level is currently being developed to access higher grade veins and the permanent pumping station is now completed. During 2010, approximately 38,400 tonnes of ore were mined from the 180 level north zone. Future plans to deepen the D shaft and connect the 180 level with rail haulage will be evaluated as the development of the mine and exploration of the resource continues.
Operating highlights
|
2012E |
2011 |
2010 |
2009 |
| Tonnes Milled |
632,100 – 645,000 |
614,437 |
704,094 |
699,420 |
| Silver ounces |
2.7 to 2.8 |
2.7 |
2.9 |
3.5 |
| Zinc tonnes |
9,404 to 9,596 |
9,555 |
10,216 |
11,198 |
| Lead tonnes |
4,277 to 4,365 |
4,865 |
4,346 |
4,372 |
| Copper tonnes |
998 to 1,473 |
1,278 |
1,654 |
2,166 |
| Gold ounces |
1,444 to 1,473 |
1,339 |
1,525 |
1,235 |
| Cash cost per ounce* |
$20.90 to $22.70 |
$14.03 |
$12.36 |
$9.95 |
* Net of by-product credits
For purposes of estimating 2012's cash costs, the Company assumed the following price levels for its by-product
production: Zn $ 1,900/tonne; Pb $2,000/tonne; Cu $7,300/tonne; Au $1,600/oz.
Exploration
Exploration at Huaron is conducted using a combination of underground drilling and drifting. Generally, underground drill holes that intersect promising ore grade mineralization are followed up by drifting for mineral resource and mineral reserve definition. During 2010, 16,218 metres were drilled using three drill rigs. In addition, 3,381 metres of underground drifting were completed for mineral resource and mineral reserve definition.
For a detailed description of the Huaron mine and operations, please refer to Pan American Silver's Annual Information Form, dated March 31, 2011, which is available on SEDAR (www.SEDAR.com).