Milpo Mining Company SAA third local zinc producer, is evaluating several options to restart operations in its Chapi copper mine, located in Moquegua region, including the option of underground mining, Mr. Victor Gobitz, CEO of the company, told MinerAndina.Com, adding that, in late March, deadlines and other details will be announced.
Chapi halted its open pit operations in November 2012, due to the presence of primary sulfides that could not be exploited in the SX -EW process, as oxides identified, could not sustained economically the operation, in a context of low copper prices. The mine reached to produce up to 900 tons of copper cathodes per month.
The reopening of Chapi, as well as the options that are being evaluated to restart operations at the Ivan mine in Chile, is one of the steps Milpo is doing in its growth strategy in base metals, which happens to have 5 mines in operation within three years.
Chapi is a porphyry copper, whose oxide layer was going to explode in a first stage, waiting for a second exploitation of sulfides. That was the assessment made by Milpo after its start-up in 2006. With the new management, the company has redirected its strategy from a campaign focused on exploration in oxides and non sulfides – which will have to wait until a solid geological model.
This adds to the large installed capacity that Chapi has as an underground mine, thanks to which it was exploited in this way before belonging to Milpo. “The reset CAPEX is therefore very small,” said Mr. Gobitz , but declined to say the amount of investment.
The concept is repeated in the case of Ivan, the open pit operation and SX -EW process with a capacity of 1,000 tons of copper cathodes per month, located in the Atacama Desert.
It halted its operations in April 2012 by the high stripping ratio and the few financial reserves due to lower ore grades and high operating costs. Milpo is defining the next steps of a possible resumption of operations.
Milpo owns about 40,000 ha. concessions in Chile, where Ivan is located. So he focused on making explorations, mainly around Sierra Medina, an oxides deposit that before was an underground mine, 45km from Ivan.
“We have identified two areas near the Ivan plant, that we are going to explore to confirm if we can restart underground operations,” said Gobitz, adding that they should close 2014 with engineering and feasibility studies for both projects (Ivan and Sierra Medina) and restore the operational capability to generate positive cash flow.
In 2005, Votorantim Metais, Sao Paulo, producer of zinc, aluminum and nickel, acquired 24.9% of Milpo, participation was extended until 2010, when became majority shareholder, currently taking 50.06% of the Milpo shares. “That has brought Milpo a corporate vision and participation has been part of a strategy of vertical integration in the zinc business allowing the company access to more sophisticated markets”, he said.
Thus, in 2007 launched the Cerro Lindo mining unit located in the province of Chincha, Ica region, which began operating at a rate of 5,000 tpd and now makes 15,000 tpd, having produced in 2013 about 278,000 of dmt zinc concentrate, 19,000 dmt of lead concentrate , 130,000 dmt of copper concentrate, containing about 2.6 million ounces of silver. It is the first mine in Peru using desalinated seawater for its mining processes.
Milpo is evaluating whether to continue to expand the operations of this mining unit. The company has invested in better understanding the VMS type deposit, and gain more experience in the mining method.
Synergies unified Atacocha -El Porvenir
Within its acquisition policy, Milpo bought Compania Minera Atacocha in 2008, located in the Pasco region, owned by Gallo mining family, and neighbor of El Porvenir mining unit, with which shares almost the same deposit. Both mines were operating independently. It is from last year (2013), the concept changes towards a holistic view with the unification of operations.
“We are building a geological model that will allow us to have a pattern of mineralization and exploration point to confirm the extensions of the deposit. We also seek to optimize both infrastructure and reduce costs. For example, we already have results that indicate that there have been no less than 10% reduction in operating costs and a higher rate of production”, Mr. Gobitz said.
In a first stage we have define one upervision in order to exploit synergies from an administrative point of view. Furthermore, additional studies have been conducted, as the potential for greater operational unification is large, since the deposits are open at depth and horizontally.
The El Porvenir underground mine, is 60 years in operation and is the deepest in Peru with Picasso Shaft of 1600 meters. In 2013 it produced 118,000 dmt of zinc concentrate, 23,000 dmt of lead concentrate, 6,000 dmt of copper concentrates, containing 1.9 million ounces of silver.
Meanwhile, Atacocha has been operating from 1936 and the mine depth reaches 1200-1300 meters. Synergies with El Porvenir seek to contribute to the optimization of the unit, which produced 83,000 dmt of zinc concentrate, 16,000 dmt of lead concentrate, 6,000 dmt of copper concentrates, containing 1.5 million ounces of silver, during 2013.
Hilarion (Huanuco) , Magistral (Ancash) and Pukaqaqa (Huancavelica) are three exploration projects available to Milpo to become mines and which are “competing” to see who goes first . “All three have very advanced exploration and in this 2014 engineering is being tuned to try to size them to a smaller operational scale, focused on the high-grade zones and develop in stages, to allow us a return on investment as soon as possible”, explains Gobitz and mentioned the case of Cerro Lindo, who also started at a lower level, and then continue to expand.
Hilarion is a polymetallic zinc -lead-silver skarn, like Atacocha-El Porvenir with almost complete its exploration. Prefeasibility is ready but in a not optimal dimension. Milpo is waiting to obtain the proper permits for the development stage.
Magistral is a copper- molybdenum porphyry, designed for a copper sulphide open pit operation, wich feasibility study is also resizing.
Pukaqaqa is a sulphide skarn copper-gold deposit and presents technical challenges that are in evaluation. Open pit operation is planned.