Transcript Diapositiva 1 - Mexican Copper Mines

CONFIDENTIAL
MOLYCOMEX BUDGET AND PLAN
GRANIZO -,MADERO PROJECTS
Cuatro Cienegas, Coahuila, Mexico
Juan Carlos Escalante M.
Chief of Geology
October 2014
OUR OBJECTIVES
1.A start-up plan for a pilot mining operation on the Granizo-Madero mining
concessions
1.A plan for intensive exploration aimed at the identification of a resource base to
scale the pilot output of mineralized rock feed from 500 to 2000 tpd
(The above is based on non-43-101 compliant estimated resources from Molycomex’s* previous
exploration programs on the outcropping Cu-Ag manto deposits, together with investigations and tests
on the treatment of the raw materials by a heap-leach process)
*Moly comex S.A. De C.V. Is a registered Private Limited Corporation in Mexico
BACKGROUND
Molycomex learned of the Copper-Silver deposits of this area in 2009 during regional
exploration and decided to acquire the El Madero (Apache) (southeast sector) property, as
well as inner plots of land
In 2011, an intensive exploration was initiated by 1:20:000-scale geological mapping and
semi-detailed geological mapping of 4 richer Cu-Ag manto zones
>3000 heavy equipment machine hours used to construct and restore access roads and
excavate 139 trenches along the Cu-Ag mantos
449 channel samples sent to ALS Chemex (Canada) for full assay
Thirty DDHs planned and 4 were drilled at San Antonio, with excellent results
Using the 2011 exploration data, NI 43-101 Technical Report was issued by Dahrouge
Geological Consulting (Prof. Roger D Morton P.Geol and Janine C Brown P.Geo)
The El Granizo-El Madero Projects
The El Granizo-El Madero mining exploration projects are located in the Cuatro Ciénegas
Municipality, in the ejidos (communal agricultural sectors) of Santa Teresa, Tanque Nuevo,
Cuates de Australia, and Estanque Palomas in the portion known as Rancho El Jabalí.
The El Granizo area was explored at different times, most recently by an exploration and
drilling program performed by BHP in 1995
During 1998-2001 a Noranda/Outokumpu JV explored the Cu-Ag mantos of the San Marcos
and Pinos Sierras and the El Granizo Sierra. The program included regional mapping and
detailed work on the El Granizo, Adrianas, and Don Indio areas
The current property consists of 11 mining concessions covering 18,267 hectares These
concessions cover a Cu-Ag manto belt >50-km long with more than 35 potential mining sites
(with old shafts and recent trenching); see NI 43-101. The mantos are 1.5 to 9.6 meters
thick. Copper grades vary from 0.5% to 2.4 % (grades that could be feasible to support lowcost mining and extractive operations)
Manto outcrops are as long as 250m. The principal ones being: Granizo (Manto Negro), Las
Nieves, Ojitos, San Antonio, and Buena Suerte (but also including Las Emes, Juanitas, El
Pilón, Tajo Zanja, and Don Indio)
The mineralized host-rocks are sandstones and dolomites of the Lower Cretaceous San
Marcos Formation. Mineralized zones are also found in dolomites of the Cupid Formation
The fundamental objective of this presentation is to illustrate the benefits of an early startup of pilot mining operations on the major mineralized zones of Granizo (Manto Negro),
Ojitos (Feeder Vein), the San Antonio manto and the Buena Suerte manto
The initial plan is to make lateral open-pit excavations along the strike of the strata/mantos,
up to the limits defined by overburden thickness vs. ore cost-benefits
From experience gathered from trenching and general excavations on the Ojitos, San
Antonio, and Buena Suerte sectors, it was found that these stratiform manto zones can be
strip-mined using a simple excavator and jack hammer to provide a good yield of mill feed
per day
We estimate that strip mining using heavy-duty machinery can be effective up to 35m
behind the current outcrops with a strip ratio of 7:1
Subsequently, room and pillar mining would be implemented as is shown on the following
figure:
Estimated Mineral Inventory:
In 2011, Molycomex estimated the mineral inventories at the major sampling sites and drill
sites in the Madero Area to be as follows:
SAN ANTONIO BUENA SUERTE MINERALS RESOURCES
AREA
BLOCK
THICKNESS MANTO
TON
GRADE % Cu
SAN ANTONIO
NORTH 1
2.57 m
8031
1.74
SAN ANTONIO
NORTH 2
2.52 m
3858
0.84
SAN ANTONIO
SOUTH
1.97 m
24625
1.55
BUENA SUERTE
BS 1
2.03 m
14273
1
BUENA SUERTE
BS2
2.85 m
35625
0.9
OJITOS
OJITOS
4.59 m
4819
1.56
91,231
10 drills are planned on the Madero Concession (see Fig 26-1 technical report 43-101
Madero Property) throughout 1 km of outcrops. These drillholes, above and beyond
checking for mineralization continuity, are targeted to expand mineral inventories by >1
million tonnes at the above-mentioned Cu grades.
A similar operation was performed by BHP at the Granizo Manto Negro sector using data
from trenching and RC drilling. The average content was calculated using a density of 2.4 for
sandstone. A 200m-long mineralized block was calculated, with an estimated width of 50
meters and 7 meters thickness, for an estimated total of 150,000 tonnes with 1.1% copper.
Thus we conclude an Current Estimated Mineralized Rock Inventory: 240,000 tonnes
Manto Negro, Granizo open pit - Mineralization width 8m
AERIAL VIEW OF OPEN PIT
1 Granizo Open
1.1%
pit 150,000 tonnes @ 1.1% Cu inventory
Mining plan and heap leach Part 1:
The initial estimate of the mineral inventory is 240,000 tonnes (NI 43-101 Non Compliant),
but this only takes into account the 4 sites where exploration is most advanced, namely:
Manto Negro, San Antonio, Buena Suerte, and Ojitos. This provides sufficient ore to feed a
start-up plant to process 500 tonnes/day @ average 1% Copper.
The targets of the additional proposed exploration program would ideally be discovery of:
Year 1 - 1 million tonnes of ore with 1.2 - 1.5% copper
Year 2 - 2 million tonnes of ore with 1.2 - 1.5% copper
Year 3 - 4 million tonnes of ore with 1.2 - 1.5% copper
The growth of the mineral inventory resulting from exploration could provide and increment
the daily processing of the plant from 500 to 1000 tonnes/day and then by year 3 ideally
double that to 2000 tonnes/day @ 1% Copper.
Molycomex’s Column leaching tests (see technical report 43-101 Madero Property, fig. 13-1
& 13-2) showed a recovery of 90% after grinding down to -1/4”. Thus with a production of
1000 tonnes/day with a 1% Cu head grade at a recovery rate of 90%, the projected output
in copper cement would be 9 tonnes of copper per day, at a selling price of US$3/lb this
infers a gross yield of US$59,400.00/day or US$1,782,000.00/month.
Mining plan and heap leach Part 2:
Given the results of the original metallurgical test, it is advisable to perform other tests on 1/2” and -1” grain sizes, also varying the sites of samples to be checked. This will optimize
the grinding size and the eventual recovery ratio; thus, primary (jaw) and secondary (cone)
crushing is planned, using portable power equipment
In the already approved Environmental Impact Assessment study of the Granizo area the
first stage contemplated involves building a 2.5 hectare heap pad, with a 1.5-hectare
(15,000 m2) heap leach operation. This leach pad will have a projected capacity of 500,000
tonnes, which at a throughput rate of 1000 tonnes/day will have a life of 1.5 years in the
first stage
Storage tanks are required for the Pregnant Leach Solution (PLS), depleted solution (DS)
tanks, and a fresh water (FW) tank. Also required are a storage facility, drying area (press
filter), workshop, fuel tank, a sulphuric acid (H2SO4) reservoir and a few minor civil works
In addition to the leaching heap, precipitation or cementation zones will be built, consisting
of ramps in the shape of shallow pools at -6° to -9° angles. These ramps are made of
reinforced concrete with epoxy coating to protect against low pH solutions that contain
copper
General plan for mining and location of a heap leach plant by the Manto Negro zone
EIA-Approved El Granizo Plan for Minera Coronado S.A. de C.V.
SEDIMENTATION
1000 m3
HEAP LEACH PAD 1.5 Hectare
Capacity: 0.5 Mt
1.5 Year life
FRESH
WATER
5000 m3
BARREN
SOLUTION
5000 m3
OPERATIONAL FLOW CHART
ACID
CONGLOMERATION
PLANT
SULPHURIC
ACID TANK
CRUSHED
ROCK
PLS
5000 m3
EMERGENCY
5000 m3
PRECIPITATION/
CEMENTATION
PLANT
CONSTRUCTION
OF 2 RAMPS,
500 m2 each
Finished
Product
Cement Cu
75%
CRUSHER
MINE ROCK
Basic operation parameters:
1000 tpd 1% Cu ore crushing to -1/4”
3m-high beds
Barren solution: 250 ppm Cu
Area 1-hectare (10,000 m2)
Irrigation rate 20 L/hr/m2
PLS Output 200m3/hr (4800m3/day)
PLS 2 g Cu/L
Cementation efficiency 75%
Cement production 9 tonnes/day 75% Cu
Plant Construction and Mine Preparation Cost Estimates
Salvage of plants land and mine yards (plant nursery) and EIA Madero area
40,000.00
Clearing for roads and/or construction of access to ore extraction sites
50,000.00
Plant expansion area clearing 2.5 hectares (storage of ground cover)
25,000.00
Preparation of pad and topsoil in mining areas (Granizo-San Antonio)
25,000.00
Topography - leveling and compacting heap area 1.5 hectares
40,000.00
Install Geomembrane liner for heap leach zone 1.5 has. (150,000 tonnes)
150,000.00
Construction of PLS drains and sumps and PLS reservoirs for Barren and Fresh Water
40,000.00
2
Instalation of liner drains for PLS (400 m) and PLS, Barren y Fresh Water (2000 m c/u)
120,000.00
Cementation plant construction (1000 m2 of ramps) two 20 m X 40 m ramps (US$180/m2)
180,000.00
Water supply installations (pipes, coupling, valves, 6”)
30,000.00
Irrigation installation for Oremax Heap (1 ha)
14,000.00
Electric installation
20,000.00
Construction of drying area and finished product storage facility 450m2
90,000.00
Construction of general warehouse
40,000.00
Construction of sulphuric acid storage room
20,000.00
Construction of industrial waste storage facility
20,000.00
Fuel storage room
10,000.00
Portable offices for General Mgmt., Mine, Plant, Geology, Accounting
15,000.00
Air Conditioned Camp
60,000.00
Construction of dormitories, showers and restaurant
40,000.00
Construction permits and explosives warehouse
30,000.00
Mine plots property and taxes 2014
290,000.00
Rent of common properties Ejidos Cuates in Australia and Palomas (+500 hrs.-machine support) 80,000.00
Contingencies 10%
150,000.00
US$ 1,579,000.00
Blue: contractors
black: staff Company
Green: tax and contract
EXPLORATION
BUDGET SUMMARY
Plant Construction and Mine Groundwork
Exploration of Madero, Granizo - Don Indio
Total
1,579,000.00
600,000.00
US $ 2,179,000.00
We propose implementation of this plan in stages and estimate it can be completed
in 14 - 16 months
WORK SCHEDULE AND ESTIMATED BUDGET FOR START GRANIZO - MADERO PROJECT COAHUILA MEXICO
ACTIVITIES 16 MONTH
1. FEASIBILITY STUDY
MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6 MONTH 7 MONTH 8 MONTH 9 MONTH 10 MONTH 11 MONTH 12 MONTH 13 MONTH 14 MONTH 15 MONTH 16
Prog
Real
2. NEGOTIATION AND CONTROL SURFACE (BUY OR RENT) (JABALI & CUATES)
Prog
Real
3. GEOHYDROLOGIC STUDY, DRILL FOR WATER AND EQUIPMENT.
Prog
Real
4. ENVIROMENT STUDY ( Land use change, Granizo & Madero zones) (MIA MADERO), ENVIROMENT WORK
Prog
Real
5. DRILL DD (3000m, 30 DRILL HOLES), LOG, CORE CUT, SEND TO LABORATORIE &
Prog
INTERPRETATION.
Real
6.Preparation and / or construction of access roads to areas of mineral extraction
Prog
Real
7. EXPLOSIVES LICENSE PERMIT CONSTRUCTION OF EXPLOSIVE STORES
Prog
Real
8. CALCULATION RESOURCES AND MODELING BLOCK (TOPOGRAPHY AND SOFTWARE)
Prog
Real
9.DESIGN AND PLANNING OF MINES
Prog
Real
10. Design and detail engineering leaching plant
11. Cleaning plant area 4.5 to 5 hectares (topsoil storage cover)
12. Leaching plant built, Heap, drainage PLS, PLS batteries, Cemetacion Plant
Prog
Real
Prog
Real
13. Construction of service areas, Camp, Warehouses
14. QUOTE AND PURCHASE OF EQUIPMENT CRUSHING AND SCREENING
Prog
Real
Prog
Real
15. QUOTE AND PURCHASE OF EQUIPMENT MINING
16. MINING START, MINERAL EXTRACTION AREA AVAILABLE WITHOUT EXPLOSIVE
Prog
Real
Prog
Real
17. START ORE CRUSHING
Prog
18. STARTING BATTERY CHARGED LEACH AND RICH RECOVERY SOLUTIONS
Prog
Real
19. Starting and Precipitation Copper
Prog
Real
Real
Trenching in Buena Suerte zone, Madero Project
August 2011
Conclusion - High Potentials
•18,267 hectares under concession
•>50 km long very accessible Belt of Cu-Ag mantos
•>35 sites with exposed mineralization of acceptable widths and grades
•Favorable metallurgy with average acid consumption (low processing costs)
•Our process can produce a very “clean” copper averaging 95% Cu content
•Production can start as soon as the plant is built
•Manto deposits are generally high-grade, profitable and produce 25% of global copper
•Major companies mine this type of deposit in Africa, South America, USA and Asia
•Analogous Copper Belt in Zambia has produced more than 87 million tonnes of copper during its long
history of operation
•The 200-km long Coahuila Copper belt has experienced limited exploration to date
THE END
Thank you for your interest
Cautionary Note regarding Forward-Looking Information herein: Certain information in this presentation constitutes “forward-looking
information under Canadian and U.S. securities legislation. This forward-looking information includes, but is not limited to, statements
regarding the potentials of the Company’s mineral properties, the future prices of copper and silver, the success of exploration
activities, the costs and timing of future exploration and developments, the estimation of mineral resources, economic evaluations,
capital requirements and statements relating to the financial and business prospects of the companies. Generally forward-looking
information can be identified by use of terminology such as “plans, “budget”, “estimates” or variations on such words or phrases.
Forward-looking information is based upon reasonable assumptions, estimates, analysis and opinions of the management, made in
light of their experience and perception of trends, current conditions and expected developments. Forward-looking information is
inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity,
performance or achievements to be materially different from those implied in forward-looking information. There can be no assurance
that forward-looking statements will prove to be accurate. Accordingly readers should not place undue reliance on forward-looking
information. The forward-looking information is presented for the purpose of assisting potential investors in understanding the expected
financial and operating performance of the ventures and may not be appropriate for other purposes