Caspiche
- Location
- The Property and Agreement
- Caspiche Porphyry Prospect
- Caspiche Property Regional Prospects
- Caspiche Porphyry Metallurgy
- Engineering and Infrastructure
- Power and Water
- Caspiche Metallurgy
- Available 43-101 reports
Location
The Caspiche Project is located in the Maricunga Belt of Chile, between Barrick and Kinross Gold’s Cerro Casale gold-copper deposit 10 kilometres to the south and Kinross Gold’s Maricunga Mine 15 kilometres to the north. Andina Minerals new Volcan gold deposit lies 35 kilometres north northeast of Caspiche. (See Figures 1 and 2).
The endowments for these deposits shown below demonstrate the potential of the area to host world class orebodies and recent success marks the Maricunga as an emerging world class gold province;
- Cerro Casale Gold-Copper Deposit: Reserves of 26.3 million ounces of gold at a grade of 0.50 grams per tonne (“g/t”) and 5,782 million pounds of copper grading 0.22% (Barrick Annual Report, December 31st, 2010).
- Maricunga Gold Mine: Reserves of 9.5 million ounces of gold at a grade of 0.65 g/t (Kinross, December 31st, 2010)
Figure 1: Developing Mineral Projects in the high mountain of Chile.
Figure 2: Southern Maricunga Belt Mineral Deposits on Satellite Imagery.
View Caspiche on Google Earth (File opens with Google Earth)
The Property and Agreement
Exeter has now fulfilled the total expenditure and drilling requirements for the full term of the option agreement. It recently exercised the option to purchase 100% ownership of the Caspiche property in early 2011. This exercise agreement provides for an extension of the required time line to production to 15 years, adds additional tenure to the package and details the 3% net smelter royalty due to Anglo from production. Advance royalty payments of US$250,000 per year to March 2021 and thence US$1 million per year to March 2026 are payable and terminate upon commencement of commercial production.
The Caspiche property has a combined area of 1262 hectares, with control across a total property holding in the area for Exeter of 7,616 hectares over 6 times the original land package acquired from Anglo. Exeter has identified a number of drill targets on the property, of which the most advanced is the Caspiche Porphyry and the associated intrusive complex (Figure 2 and 3). Additional drilling has also been undertaken at Caspiche EPITHERMALS and several other regional targets.
Figure 3: Caspiche Property, Principal Prospects and Drill Hole collars(January 2011).
Caspiche Porphyry Prospect
DISCOVERY
Following prior exploration and drilling of the property by Anglo during the 1980’s and Newcrest during the 1990’s the property lay dormant until Exeter undertook an option agreement over the area in December 2005.
Building on detailed mapping and geophysics, in May 2007 Exeter drilled CSR-013, the final hole of the 2006/2007 season and the first Exeter drill hole testing the porphyry potential of the Caspiche Porphyry. This discovery hole reached 344 meters which was the ultimate capacity of the drill rig and intersected 304 metres (1,003 ft) grading 0.9 grams/tonne (“g/t”) gold (0.026 oz/ton).
Additional drilling confirmed the existence of a large previously untested higher grade porphyry intrusion with intersections such as 792.5 m @ 0.96 g/t Au and 0.4% Cu from hole CSD-16 and 1,234 m grading 0.89 g/t Au and 0.33% Cu which included 708 m grading 1.22 g/t Au and 0.42% Cu from hole CSD-032.
Currently drilling is continuing on the property, aimed at increasing the confidence and classification of the current resource, to define additional mineralisation where zones have not been closed off, and to look for satellite deposits. A range of test programs and preliminary development studies have commenced and are ongoing.
Geology
Gravels (Quaternary alluvium) cover over 90% of the Caspiche property.
Host (basement) rocks at Caspiche comprise Tertiary age volcanic sandstone and siltstone. In the vicinity of Caspiche Porphyry this unit is overlain by a 500 to 700 m thick sequence of homogeneous polymict, volcanic breccia coeval with volcanism.
Two main porphyry intrusions, early and early inter-mineral phases, constitute the well mineralised Caspiche stock, with a third, late inter-mineral phase abutting it to the west and south. The well-mineralized stock measures roughly 300 x 400 m in plan view, with a vertical extent of over 1,200m. The early porphyry is blind, being concealed beneath an average of 100 m of pre-mineral volcanic breccia.
A late stage diatreme breccia occurs on the western side of the Caspiche porphyry system, dipping westward at approximately 30º. The breccia extends for a distance of at least 1 km in a north-south orientation and has been drilled to a thickness of 280 m.
Three dominant alteration types are recognised being potassic, intermediate argillic and advanced argillic. Potassic alteration is overprinted by intermediate argillic and both these are affected by the advanced argillic alteration assemblage. Massive silica and vuggy residual silica ridges crop out in the south and north of the Caspiche Porphyry prospect.
Siliceous ridges outcrop on the northern and southern peripheries of the Caspiche Porphyry prospect and are the surficial expression of high sulphidation epithermal style mineralization that extends to depths up to 200 m.
Oxidation effects are notable in the upper 100 m to 150 m and occasionally down to 200 m. The contact between oxide and sulphide material is sharp.
Immediately to the west, underneath a west dipping barren breccia a new zone of mineralisation named the “MacNeill zone” has recently been identified. This appears to be a separate later pulse of gold rich, copper poor mineralisation. Its shape appears to be lenticular and thickest underneath the shallower portions of the overlying breccia.
Alteration and Mineralisation
Mineralisation at the Caspiche Porphyry is described as a stockwork-hosted, gold-copper porphyry. This large tonnage, relatively low grade style of deposit is host to some of the worlds largest orebodies and are often mined in a bulk tonnage scenario.
The bulk of the mineralisation is hosted in a dense stockwork of grey veins. Potassic alteration is the earliest alteration phase and is more pronounced at deeper levels.
Intermediate argillic alteration overprints much of the potassic alteration. The main effect of this overprint are to convert magnetite to hematite (martitization). Due to this the porphyry mineralization is non magnetic to depths of around 400-500 m.
There is a “telescoped high-sulphidation epithermal” gold system overprinting the upper portion of the porphyry system, which provides some local upgrading of the gold from this upper zone.
Copper has been almost totally leached from the relatively flat lying oxide zone making it suitable for heap leaching. Secondary copper is rarely observed on the oxide-sulphide contact, but there is no significant copper enrichment. Visually the contact is easy to pick and is geochemically sharp with depletion in copper in the oxide zone.
Dominant ore minerals at Caspiche include chalcopyrite, covelite with bornite becoming the dominant mineral species with depth. Advanced argillic altered zones contain a high-sulphidation sulphide assemblage in which pyrite is accompanied by typically fine-grained intergrowths of enargite, tennantite, chalcopyrite, chalcocite, covellite and minor bornite.
Gold is associated with sulphides within the veins and locally disseminated in the wallrocks outside the intrusions but still spatially associated with vein material.
The MacNeill zone is dominated by pyrite as the primary sulphide with subordinate chalcopyrite.
Drilling
Figure 4 shows the collar locations and provides an indication of the large ore body “footprint” outlined from drilling. Results and modeling indicate an orebody footprint to the mineralised system at +0.3 g/t gold approximately 1 cubic kilometre (0.62 cubic miles) in dimension. To date over 75km of drilling has been completed on the Caspiche porphyry and over 60km including drilling from prior explorers in the area. Following the successful completion of a targeted infill drilling program designed to add value by converting the highest grade portions of the current inferred resources into the indicated category, the current resource estimate produced in August 2011 is reported below. Ongoing drilling is underway designed to support detailed engineering for geotechnical, hydrology and hydrogeological evaluation within the area of the Caspiche deposit and planned infrastructure and to test for satellite deposits analogous to Caspiche mineralization both on our properties and in the newly acquired Sideral prospects (see below).
Figure 4: Caspiche Porphyry prospect, Drill hole collars and traces projected to surface. (September, 2010)
The nominal drill spacing at Caspiche is on the order of 200 by 200 metres on a local grid orientated 060-240 degrees for inferred (lower confidence) resource. Or Reduced to a (staggered) 100m line spacing or closer for indicated and/or measured (higher confidence) resources. This broad spacing is typical for porphyry deposits with low variability such as Caspiche.
Resources
On August 18th 2011 AMEC completed a new updated National Instrument 43-101 (“NI 43-101”) compliant mineral resource estimate.
The resource estimate included new drilling from the 2010 and 2011 campaigns which were designed to increase classification of the resource by further infill drilling.
The new resource contains 1.36 billion tonnes in the measured and indicated categories containing 22 million ounces of gold, 6093 million pounds copper and 49 million ounces of silver. A further 286 million tonnes is in the inferred category containing 2.85 million ounces of gold, 1281 million pounds copper and 8.18 million ounces silver
| Material | Category | Cut-off | Volume | Tonnes | Au | Cu | Ag | AuEq | AuEq |
|---|---|---|---|---|---|---|---|---|---|
| (ppm) | (Mm3) | (Mt) | (g/t) | (%) | (g/t) | (g/t) | (Moz) | ||
| OXIDE | Measured | Au Eq > 0.2 | 23 | 56 | 0.45 | 0.01 | 1.72 | 0.45 | 0.81 |
| OXIDE | Indicated | Au Eq > 0.2 | 21 | 50 | 0.37 | 0.01 | 1.57 | 0.37 | 0.60 |
| OXIDE | Inferred | Au Eq > 0.2 | 4 | 9 | 0.27 | 0.01 | 1.54 | 0.27 | 0.1 |
| SULPHIDE | Measured | Au Eq > 0.3 | 163 | 402 | 0.56 | 0.22 | 1.08 | 0.98 | 12.67 |
| SULPHIDE | Indicated | Au Eq > 0.3 | 346 | 853 | 0.49 | 0.19 | 1.10 | 0.84 | 22.93 |
| SULPHIDE | Inferred | Au Eq > 0.3 | 114 | 277 | 0.31 | 0.13 | 0.88 | 0.54 | 4.90 |
| ALL | Measured | Combined | 186 | 457 | 0.55 | 0.20 | 1.15 | 0.92 | 13.48 |
| ALL | Indicated | Combined | 367 | 903 | 0.48 | 0.18 | 1.12 | 0.81 | 23.53 |
| ALL | Inferred | Combined | 117 | 286 | 0.31 | 0.12 | 0.89 | 0.54 | 4.9 |
Table 1 Super Pit Option for Mineral Resource for Caspiche (Rodrigo Marinho, P.GEO, 18 August 2011)
* Oxide resources are reported above a marginal cutoff of 0.18ppm gold-equivalents, sulphide resources are reported above a marginal cutoff of 0.3ppm gold-equivalents.
** AMEC calculated a gold equivalent (AuEq) value based on gold and copper revenues (prices and recoveries involved). The following formula was used to calculate AuEq values in each block of the model:
where Au and Cu are the block kriged Au and Cu grades, PAu and PCu are the Au and Cu prices ($1150/oz and $2.50/lb, respectively), and RAu and RCu are the Au and Cu projected metallurgical recoveries, 65 % and 85 % respectively for sulphide material, and 78 % for Au and 11 % for Cu in the oxide zone.
Caspiche is one of the largest gold deposits in Chile, a country considered one of the most secure for mining investment. The size of the Caspiche resource on a ‘gold equivalent’ basis demonstrates the significant contribution of copper to the resource. While primarily a gold-rich porphyry system, copper contributes approximately 40% of the value of the metal endowment of Caspiche by endowment.
For further information on the Caspiche Porphyry discovery, geology, mineralisation and resources:
Download the latest 43-101 on Caspiche PDF
Link to Caspiche Discovery history paper
Engineering and Infrastructure
Caspiche is a green field discovery, and thus existing site infrastructure is limited to an exploration camp and roads. However the Cerro Casale despoit is located 10km to the south, and the operating Maricunga mine is located 15 kilometres to the north providing generally good infrastructure in the area.
In October, 2010 Exeter Resources engaged Aker Solutions (now Jacobs Engineering) of Santiago, Chile, an internationally recognised engineering group, to carry out two prefeasibility studies for its Caspiche gold-copper project in Chile.
STUDY RESULTS – STAND ALONE “OXIDE GOLD” PROJECT
The first study which considered a stand-alone “oxide gold” project to mine the 100-150m thick outcropping, flatlying upper portion of the deposit via heap leaching.
The initial results are considered very positive as the project returned a NPV(5) of US$329.5 million with net operating costs of US$524/ounce gold. The removal of the gold only oxide “blanket” is necessary to expose the very large underlying sulphide project and no residual value is attributed to the mine infrastructure and equipment that could be utilised in developing that larger project.
Highlights of the Oxide Standalone PFS include
- Average annual production is approximately 210,000 ounces gold and 365,000 ounces silver.
- The short 5 year mine life minimises the impact of discounted cash flow and currency and metal price fluctuations.
- Average cash operating costs are US$524/oz gold, after the silver credit.
- At US$1,320/oz gold, using a 5% discount rate, the pre-tax net present value (“NPV”), including the Anglo royalty is US$329.5 million, generating an internal rate of return (“IRR”) of 34.4%, and a payback period of 3.2 years from initial construction.
- Estimated initial capital costs are US$335.6 million.
- Processing throughput is 62,000 tonnes per day (“tpd”) of ore.
- Average gold recovery is 78% (excellent recovery by industry standards). Average silver recovery is 34%.
- Waste to ore ratio is 0.26:1 over the life of mine.
- Several opportunities to materially improve project economics, including the supply of power from the grid were not incorporated into the PFS.
The table below outlines key sensitivities for the pre-tax NPV and IRR for the Caspiche project.
| Indicator | Gold Price US$/oz | ||||||
|---|---|---|---|---|---|---|---|
| 1,000 | 1,100 | 1,200 | 1,300 | 1,400 | 1,500 | 1,600 | |
| IRR | 9.7% | 18.0% | 25.7% | 33.0% | 40.0% | 46.7% | 53.2% |
| NPV@0% (MUS$) | 109 | 211 | 313 | 415 | 517 | 619 | 721 |
| NPV@5% (MUS$) | 47 | 135 | 223 | 312 | 400 | 488 | 576 |
| NPV@7.5% (MUS$) | 21 | 103 | 186 | 268 | 350 | 432 | 514 |
| Payback (years from start up) | 3.9 | 3.2 | 2.7 | 2.3 | 2.0 | 1.8 | 1.7 |
Additional project highlights and detail on the capital and operating cost estimates are provided in the tables below.
Key Indicators
| Ore Production (000's of tonnes) | 101,741 |
|---|---|
| Total Material Moved (000's of tonnes) | 128,026 |
| Strip Ratio | 0.26 |
| Gold Production (000's gross oz.) | 1,052 |
| Silver Production (000's gross oz.) | 1,822 |
Mine and Process Costs
| Mining Capital Cost – considering leased mining fleet (US$000’s) | $9,724,587 |
|---|---|
| Per tonne of Ore | |
| Mining Cost | $1.96 |
| Processing Cost | $2.48 |
| Contracts | $0.75 |
| Infrastructure | $0.16 |
| General Administrative and Other | $0.53 |
| Total | $5.88 |
Construction Capital Costs
| Initial Construction Capital Costs | US$000's |
|---|---|
| General | 9,908 |
| Mining | 22,034 |
| Process | 87,927 |
| Infrastructure | 3,480 |
| Energy supply | 35,806 |
| Water Supply | 40,986 |
| Contingency | 58,399 |
| Indirects | 77,042 |
| Total Capital | 335,582 |
STUDY RESULTS – CASPICHE PROJECT “COMPLETE” PRE-FEASIBILITY STUDY
In January 2012 Exeter released the results of the complete orebody prefeasibility study. The Prefeasibility Study (”PFS”), completed by Jacobs Engineering (formerly AKER Solutions), evaluated three mining and processing options for the main sulphide ore body and the near surface heap leachable ore contained within the Caspiche open pit. The preferred development option is an open pit operation processing 150,000 tonnes per day sulphide ore in addition to a heap leach operation. The heap leach will start before the main concentrator and will initially extract gold from the near surface oxide cap at a design production rate of 72,000 tonnes per day. This oxide ore will be removed as part of the main operation pre-stripping activities. Total proven and probable ore mined and processed through this option is approximately 1.091 billion tonnes.
This large open pit operation shows robust economics with an NPV5 of US$ 2,800 million and average operating costs of US$ 606 per ounce gold equivalent1. The gold production cost drops to US$ 18 per ounce when copper and silver by-product credits are considered. The study predicts an average annual production over the nineteen year mine life of 696,000 ounces gold, 244 million pounds of copper and 844,000 ounces silver. Overall copper recovery is 85.6% and gold recovery 67.6%.
1 Gold Equivalent was calculated by simple mathematical proportion. Gold, silver and copper revenues were calculated using production multiplied by relevant metal price used in the study, these values were totalled and the total revenue was divided by the gold price used in the study. This was repeated for each year of operation and then averaged over the life of project.
Highlights of the PFS:
NI 43-101 compliant Proven, and Probable Mineral Reserves2 and key mining and metals content parameters for the selected “super pit” option as follows:
| Reserves | Mt | Gold g/t |
Silver g/t |
Copper % |
|---|---|---|---|---|
| Oxide Ore | 124 | 0.38 | 1.62 | <0.01 |
| MacNeill Ore | 78 | 0.51 | 1.05 | 0.07 |
| Sulphide Ore | 889 | 0.58 | 1.13 | 0.24 |
| Contained Metal | Copper Million tonnes |
Gold Million ounces |
Silver Million ounces |
Gold Equivalent Million ounces |
|---|---|---|---|---|
| 2.1 | 19.3 | 41.5 | 30.1 |
Eq Au [Moz] = Au [Moz] + Cu [Mt] * Copper Price * 2204.62 / Gold Price + Ag [Moz] * Silver Price / Gold Price
| Mine Schedule | Mine Life Yr |
Oxide Process Kilotonnes per day |
MacNeill Process Kilotonnes per day |
Concentrator Feed Kilotonnes per day |
|---|---|---|---|---|
| 19 | 72 | 33 | 150 | |
| Max. Open Pit Mvment. Kilotonnes per day |
Avg. Open Pit Mvment. Kilotonnes per day |
|||
| 909 | 655 | |||
Financial Analysis:
The pre-tax net present value (“NPV”),project revenue, IRR and payback period for the Super Pit option including the Anglo royalty are as follows:
| Item | Value |
| Revenue | US$ 27,419 M |
| NPV5 | US$ 2,800 M |
| IRR | 11.5 % |
The following metals prices were used to calculate the economic evaluation:
| Gold: | 1,430 US$/oz Years 1 – 4 (heap leach operation and first 2 years of concentrator only) 1,200 US$/oz remaining mine life |
| Copper: | 2.75 US$/lb mine life |
| Silver: | 31.2 US$/oz Years 1 - 4 22.5 US$/oz remaining mine life |
Metals prices were derived as follows:
| Gold and Silver: | LME: 12 month rolling average price Sept 2010 to Aug 2011 |
| Copper: | Recommended long term price generated as part of market study commissioned |
Project Options:
The PFS examined three options for open pit and underground development. The sulphide orebody will be processed through a conventional concentrator plant. The copper concentrate produced will be treated in an offsite roaster to ensure arsenic content is below current smelter thresholds of 0.2%. Additional gold recovery is achieved by leaching the flotation scavenger tailings. The options evaluated in the PFS were:
- An open pit operation, designated ‘Super Pit case’ extracting 150,000 tonnes per day ore over a project life of 19 years.
- A combined open pit and underground operation, designated ‘Hybrid’, extracting 95,000 tonnes per daysulphide ore over a project life of 24 years.
Each of the above options incorporates a standalone heap leach operation. This operation will process heap leacheable ore extracted as part of pre-stripping or ongoing mine operations.
- An underground operation, designated ‘Full Underground’, extracting 90,000 tonner per day sulphide ore for 22 years from year 9 of the project. During construction of the underground mine a heap leach operation treating leachable ore will be operated independently.
The inclusion of a heap leach operation in each option studied maximizes resource exploitation whilst providing the project with early cashflow whilst development and construction the larger concentrate process plant is completed.
A key component of the PFS is the inclusion of high tonnage in-pit crushing and conveying (“IPCC”) system for the movement of waste rock. This achieves greater efficiencies in the movement of the pit overburden, not only to address rising operating costs for mining waste, but also the capital and operating costs involved in the construction of tailings dam walls using conventional methods.
Ore Treatment Methods used for the PFS can best be described as follows:
The ore processing routes selected were based on extensive metallurgical testing of samples considered to be representative of the main Caspiche ore types.
The oxide ore and some low-copper sulphide oreA are treated in a conventional valley-fill heap leach operation, involving two stage crushing of as-mined ore, leaching of crushed ore (after placing it on impermeable plastic liners), the collection of the leach solution in lined ponds and lastly, the recovery of the gold and some silver in an activated carbon recovery circuit (ADR Circuit)B. Following the recovery of the gold the solutions are recirculated.
Sulphide ore follows conventional porphyry copper flotation practice. Sulphide ore is crushed and milled to a relatively coarse size to then pass through a flotation circuitC where the first gold-rich copper “rougher concentrate” is separated. This concentrate is milled to a much finer size to then pass through three further flotation stagesD to raise the copper grade to commercial copper concentrate levels.
The concentrate is treated via reductive roasting to reduce the arsenic content to levels acceptable to copper smelters. The arsenic is collected and treated to form a stable, safe, arsenic compound called scorodite which will be permanently stored in a lined impoundment.
During the treatment steps used to upgrade the copper concentrate, part of the first rougher concentrate which has been separated contains a significant amount of gold and a small quantity of copper. A separate flotation circuitE recovers most of these values in a “scavenger concentrate” which is then treated in a carbon-in-leach (CIL) plant. Gold and silver are recovered from the activated carbon in a second ADR circuit. Cyanide and a small quantity of copper are recovered from solution by a combination of precipitation and pH adjustment in a SARTF circuit.
Tailings from the main flotation circuit are thickened and placed in a tailings storage facility formed by the waste rock placed by the IPCC system. Tailings from the CIL circuit are placed in a separate and smaller, plastic-lined tailings storage facility close to the concentrator.
- Most low-copper sulphide ore to be heap leached originates from a separate zone called the MacNeill Zone.
- Activated carbon loaded with precious metals liberates the metals in an Adsorption-Desorption-Recovery circuit (ADR).
- “Rougher” circuit is the term conventionally applied to the first flotation separation from milled ore.
- “Cleaner” circuits or stages are those stages used to upgrade a “rougher” concentrate.
- “Scavenger” is conventionally used to describe flotation circuits that recover residual values from the main “rougher” or “cleaner” flotation circuits. In this case, the circuit is a “cleaner-scavenger”.
- SART is the commonly used technical description and stands for sulphidization, acidification recycling and thickening.
Heapleach:
The heapleach process route can be summarised as below:
Other Key Indicators:
| Ore Production (000's of tonnes) | 1,091,336,900 |
| Total Material Moved (000's of tonnes) | 4,486,000,000 |
| Strip Ratio | 3..11 |
| Gold Production (M oz.) | 13.23 |
| Copper Production (M lbs.) | 4,149 |
Capital Cost Estimate Breakdown (rounded to nearest US$ million)
| DESCRIPTION | TOTAL (US $ M) |
|---|---|
| Mine Area | 945 |
| Heap leach Process area | 104 |
| Concentrator Process Area | 1,322 |
| Infrastructure incl Power & Water supply | 420 |
| General & Indirect Cost | 1,181 |
| Contingency | 827 |
| Total | 4,800 |
Jacobs completed a series of benchmarking studies on project Capex as a relation to installed plant throughput which confirmed that the selected option was in the upper quartile of Capex costs for similar recent projects.
Mine and Process Costs:
AREA |
UNIT | COST |
|---|---|---|
| Super Pit | ||
| TOTAL SULPHIDES COST | US$/t ore | 10.4 |
| Mine | US$/t ore | 4.9 |
| Concentrator Process Cost | US$/t ore | 5.5 |
| CONCENTRATOR | US$/t ore | 3.5 |
| CRUSHING | US$/t ore | 0.1 |
| GRINDING | US$/t ore | 2.4 |
| FLOTATION | US$/t ore | 0.5 |
| CONCENTRATE HANDLING | US$/t ore | 0.0 |
| TAILINGS HANDLING | US$/t ore | 0.2 |
| SCAVENGER TAILS TREATMENT | US$/t ore | 0.2 |
| ROASTING PLANT | US$/t ore | 0.2 |
| AS TREATMENT AND DISPOSAL | US$/t ore | 0.4 |
| WATER SUPPLY (assumes fresh water supply) | US$/t ore | 0.3 |
| Sulphides G&A | US$/t ore | 0.6 |
| Contingencies | US$/t ore | 0.5 |
| TOTAL HEAP LEACH COST | US$/t ore | 0.68 |
| Process Cost | US$/t ore | 0.58 |
| Heap Leach G&A | US$/t ore | 0.06 |
| Contingencies | US$/t ore | 0.03 |
The selection of an In Pit Crushing and Conveying (IPCC) system to handle waste has resulted in mining costs for the project being very competitive. NCL, Exeter’s mining consultants estimated that the cost saving per ton of total material moved by using the IPCC system instead of a large truck fleet was in the order of $US 0.25 / tonne.
The tables below outline key sensitivities for the pre-tax NPV and IRR for the Caspiche Super Pit project.
| US$ / oz Gold Price (Copper and Silver Price fixed) | $1,100 | $1,300 | $1,500 |
|---|---|---|---|
| IRR | 8.7% | 12.0% | 15.2% |
| NPV @ 0% (US$ millions) | 5,731 | 8,247 | 10,764 |
| NPV @ 5% (US$ millions) | 1,617 | 3,196 | 4,775 |
| NPV @ 7.5% (US$ millions) | 429 | 1,715 | 3,002 |
| US$/ lb. Copper Price (Gold and Silver Price Fixed) | $ 2.25 | $ 2.75 | $ 3.25 |
|---|---|---|---|
| IRR | 9.1% | 11.5% | 13.7% |
| NPV @ 0% (US$ millions) | 5,507 | 7,447 | 9,387 |
| NPV @ 5% (US$ millions) | 1,658 | 2,800 | 3,943 |
| NPV @ 7.5% (US$ millions) | 536 | 1,438 | 2,340 |
| Gold Overall Recovery - Percent of Baseline* | |||
|---|---|---|---|
| 90% | 100% | 110% | |
| IRR | 9.3% | 11.5% | 13.6% |
| NPV @ 5% (US$ millions) | 1,813 | 2,800 | 3,786 |
| Copper Overall Recovery - Percent of Baseline* | |||
|---|---|---|---|
| 90% | 100% | 110% | |
| IRR | 10.2% | 11.5% | 12.7% |
| NPV @ 5% (US$ millions) | 2,171 | 2,800 | 3,428 |
*metallurgical optimization is still in-process and if it is achieved would positively affect the IRR as shown in the selected cases
| Capital Cost - Percent of Baseline | |||
|---|---|---|---|
| 90% | 100% | 110% | |
| IRR | 13.3% | 11.5% | 9.9% |
| NPV @ 5% (US$ millions) | 3,319 | 2,800 | 2,281 |
| Operations Cost - Percent of Baseline | |||
|---|---|---|---|
| 90% | 100% | 110% | |
| IRR | 13.3% | 11.5% | 9.6% |
| NPV @ 5% (US$ millions) | 3,654 | 2,800 | 1,945 |
Project Base-Case Assumptions and Parameters in the Pre-feasibility Study
| Input Cost Values – US$ | ||
|---|---|---|
| Electrical Power | Per kW-hr | $ 0.117 |
| Diesel | Per litre | $ 0.70 |
| Lime (80% CaO) | US$ per tonne | $ 100 |
| Cyanide | US$ per tonne | $2471 |
| Activated Carbon | US$ per kg | $ 3.25 |
2 Caspiche Super Pit Case - Mineral Reserves (C. Guzman, Chilean Mining Codes. October, 2011)
| Option | Super Pit | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Oxide Ore | MacNeill Ore | Sulphide Ore | Contained Metal (millions) | |||||||||||
| Mt | Au g/t | Ag g/t | Mt | Au g/t | Cu % | Ag g/t | Mt | Au g/t | Cu % | Ag g/t | Au oz | Cu t | Ag oz | |
| Proven | 62 | 0,42 | 1,71 | 4 | 0,46 | 0,08 | 0,70 | 321 | 0,62 | 0,26 | 1,10 | 7,3 | 0,8 | 14,8 |
| Probable | 62 | 0,33 | 1,52 | 74 | 0,51 | 0,07 | 1,08 | 568 | 0,55 | 0,23 | 1,15 | 11,9 | 1,3 | 26,6 |
| Total | 124 | 0,38 | 1,62 | 78 | 0,51 | 0,07 | 1,05 | 889 | 0,58 | 0,24 | 1,13 | 19,3 | 2,1 | 41,5 |
Mineral Reserves are defined within a mine plan with pit phase designs guided by Lerchs-Grossman (LG) pit. The LG shell generation was performed on Measured and Indicated resources only, using a gold price of 1,150 US$/oz, a silver price of 20 US$/oz and a copper price of 2.5 US$/lb, a base mining cost of 1.00 US$/t with incremental of 0.025 US$/t per 15 m bench below the pit exit and 0.015 US$/t per 15 m bench above the pit exit. Processing and treatment costs used were 3.40 US$/t of ore plus 6 US$/oz of gold and 0.4 US$/oz of silver for oxides, 5.31 US$/t plus 6 US$/oz of gold and 0.4 US$/oz of silver for MacNeill and 7.04 US$/t plus 6 US$/oz of gold and 0.4 US$/oz of silver for sulphides. Applicable Net Smelter Royalties were applied. Metallurgical recoveries for oxides were 78 % for gold and 34 % for silver. Metallurgical recoveries for MacNeill were 55 % for gold in the upper layers and 30 % in the lower layers and 20 % for silver. Silver metallurgical recovery for sulphides was 50 %. Copper and gold metallurgical recovery for sulphides was a function of the head grade.
- Sulphide and oxide ore reserves are reported at 0.00 US$/t profit.
- Leachable MacNeill ore reserves are reported at 0.49 US$/t profit after cost of rehandle.
- Tonnages are rounded to the nearest 1,000 kt; grades are rounded to two decimal places.
- Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content.
- Tonnage and grade measurements are in metric units; contained gold and silver are in troy ounces.
- The life of mine strip ratio is 3.11.
The mining concession owner in Chile typically has the right to establish an occupation easement over the surface as required for the comfortable exploration or exploitation of the concession. Exeter has secured an ongoing long term lease to the surface rights to the Caspiche property area whilst project development progresses following a formal application to the Ministry of Public Land of the Chilean government (Bienes Nacionales).
Exeter through dedicated consultants has been collecting baseline environmental studies since 2009 including topics such as:
- Physical aspects, including climatology, geology, geomorphology, and hydrology
- Biological aspects, including seasonal monitoring of flora and fauna.
- Human aspects, including socioeconomics and demography
- Construction aspects, including economic activities and infrastructure
- Use of the soil
- Archaeology
- Anthropology
- Landscapes
- Natural risks, including flood and landslide
Power and Water
Power for the existing projects in the Maricunga region is normally sourced from near Copiapó and carried to the mines by private power lines owned by the operating companies. At Caspiche, two areas of relatively level ground are already under mineral concessions over which Exeter maintains rights, and the process for obtaining permits for easements is straightforward in Chile.
Exeter contracted the engineering company, Hatch Engineering to perform a power supply overview study for electrical power in Chile, with specific focus on Region III. Hatch reported new investment in power generation in Chile, particularly for coal-fired power plants.
Currently Exeter and Jacobs are reviewing the high voltage power supply and distribution both within the region and specifically to Caspiche.
Exeter contracted the engineering company, Knight Piesold, to complete a preliminary water supply study that included a review of previous water studies in the Caspiche area, descriptions of applicable regulations, a compilation of existing hydrologic data and water rights for the area, an analysis of the social impact of water demands in the area, and recommendations of water sources potentially available to the Caspiche project.
Exeter has a detailed and focuses water acquisition strategy to meet the water requirements of the various project scenarios. Exeter has compiled a survey of the subterranean and surface water use rights held by third parties located within the area of influence of the Caspiche project area. The company has requested three permits for the exploration of underground water, covering a total area of 69,125 ha. The first of these exploration permits was approved by the DGA in May 2011 and active water exploration in the area has already begun. The remaining two exploration permits remain in process.
In addition on February 8, 2011 Exeter announced it had secured an option over a total volume of 300 litres per second from a private Chilean company. The rights relate to surface water flows and are consumptive in nature. The option agreement provides for staged payments deductible from a purchase price of US$15 million. The Company can withdraw from the option at any time without penalty.
Both the optioned water rights and the nearest exploration basin are located some 100 kilometres north of the project, adjacent to water rights proposed for the Cerro Casale project, 10 kilometres south of Caspiche. Additional basins are 50-100km further north again.
Caspiche Metallurgy
Following metallurgical testwork has been carried out by Exeter on six oxide composites from prior drilling campaigns and additional column leach and sizing testwork on oxide mineralization from 2009-2010 Exeter provided an update on its stand alone oxide prefeasibility study on March 15, 2011.
Highlights of this update include:
- A large scale column leaching program on oxide ore samples at a variety of crush sizes which provided data supporting heap leaching gold recoveries 75% to 78%, based on a 50mm (2 inch) crush size. Silver recoveries averaged 25%.
- A 25 metric ton pilot plant sample recently collected from various mineralized sites within the oxide deposit indicated eas the material breaks naturally to -50mm.
These data was used to support the recently announced results from the PFS study considering only the upper oxide, gold only portion of the deposit.
Test work on the sulphide component of the deposit is currently underway with 20 composite samples having been analyzed covering a range of grades, rock and alteration types. These samples were then grouped according to metallurgical composites based around pyrite and arsenic content, to begin flow sheet optimization. Including ore hardness tests, flotation tests to optimize regrind requirements and additional gravity concentration tests, and locked cycle tests to provide reliable metallurgical performance values.
Basic flotation testwork and locked cycle testwork on a nominal grind of 140 µm K80 on the sulphide composites shows that about 85% of the copper and between 60% and 65% of the gold was recovered in the concentrate. Work in 2010 continued to focus on optimizing the grind and flotation conditions to improve metallurgical performance. This work culminated in a pilot plant run in December 2010 which successfully produced 75kg of gold-silver bearing copper concentrate from approximately 10 metric tons of diamond drill core representative of Caspiche sulfide mineralization. The resulting concentrates assayed on average 23.5% copper, 35 g/t gold, 75 g/t silver and 2.4% arsenic.
This 75kg of concentrate is sufficient to allow a number of studies into potential concentrate treatment options in early 2011. Caspiche, like many of the Chilean and the global copper porphyry projects has elevated arsenic which was identified early by the company. In early 2010, Exeter, through a study by SNC Lavalin Australia, identified a range of processes with the capability of addressing the arsenic issue. The Company selected two of these processes for detailed testwork on the basis that both are commercially proven and readily available. The two processes are Reduction Roasting and High Temperature/Pressure Oxidation. Reduction Roasting was recently selected for Codelco’s new Ministro Hales copper mine in northern Chile. Testwork on this concentrate confirmed the successful application of both reduction roasting and pressure oxidation technologies to reduce or eliminate arsenic from the sulfide concentrates produced by flotation. Highlights of testwork conducted by independent laboratories include:
- Reduction Roasting: Testwork by both Outotec (Sweden) AB and Technip USA (Inc) reduced arsenic levels in concentrate samples to 0.2% arsenic, a level considered commercially acceptable (without penalties) in most smelter contracts.
- High Temperature/Pressure Oxidation: Testwork solubilised 99% of the copper, leaving the arsenic as the residue mineral scorodite. Leaching of the residue yielded gold dissolutions that averaged 96%. These results strongly suggest that high quality cathode copper and gold-silver bullion can be produced from a plant that uses pressure oxidation to treat concentrates, and the recoveries will be very high.
Gravity concentration from the rougher tailings stream, the use o high pressure grinding rolls (HPGR) and optimized flotation reagent schemes are also being investigated to investigate its potential to increase gold and/or copper recoveries.
The Company is also carrying out many other metallurgical testwork programs aimed at optimizing aspects of the Caspiche resource and flowsheet. McClelland Laboratories is investigating possible heap leaching of the lower copper grade MacNeill zone, providing the potential to convert up to 60Mt of material currently classified as marginal/waste via conventional flotation into ore. The Company is also investigating in detail, up to 160MT of other lower grade material with similar potential to be converted to ore.
Proposed Schedule
The following figure shows the proposed development schedule for progress and key milestones at the Caspiche project.
Available 43-101 Reports
This webpage is provided as a general summary of current activities and should not be considered definitive nor complete by nature. Additional technical information on all aspects discussed above are contained in our most recent NI43-101 report which is linked from this page or available on www.sedar.com
16 January, 2012 (Details 7.2 MB - PDF)
13 September, 2010 (Details 3.7 MB - PDF)
12 March, 2010 (Details 7.8 MB - PDF)
19 October, 2009 (Details 3.5 MB - PDF)
14 September, 2009 (Details 3.5 MB - PDF)
14 September, 2009 (Details 3.5 MB - PDF)
27 March, 2009 (Details 4.9 MB - PDF)
9 February, 2009 (Details 8.1 MB - PDF)
26 April, 2008 (Details 6.23 MB - PDF)
24 December, 2007 (Details 6.72 MB - PDF)
Caspiche Property Regional Prospects
Exeter has identified a number of additional drill targets on the property beyond the immediate vicinity of the Caspiche Porphyry, of which the most advanced is the Caspiche epithermal prospect. Exeter commenced first pass drilling early in 2007 which confirmed the presence of an epithermal gold system at Caspiche Epithermals. Subsequent holes intersected significant widths of gold ± silver mineralisation. The best result to date was the most recent hole drilled near the end of the previous season which intersected 10 metres at 3.5ppm Gold and 33ppm Silver.
| Hole | From (m) |
To (m) |
Width (m) |
Gold g/t |
Silver g/t |
|---|---|---|---|---|---|
| CSR-002 | 52 | 76 | 24 | 1.1 | 23 |
| CSR-002 | 172 | 178 | 6 | 1.7 | 16 |
| CSR-006 | 144 | 166 | 22 | 1.5 | 1.6 |
| CSR-008 | 42 | 58 | 16 | 1.3 | 5 |
| CSR-010 | 166 | 202 | 36 | 1.3 | 26 |
| CSR-011 | 96 | 108 | 12 | 1.2 | 4 |
| CSR-012 | 94 | 110 | 16 | 2.1 | 2 |
| CSD0040a | 232 | 242 | 10 | 3.5 | 32.6 |
Table 4: Significant Exeter Drill Intercepts from the Caspiche Epithermals Epithermal Gold + Silver Target
Exeter has also recently acquired 100% in a large land package (which more than doubles the size of the original Caspiche land holding) around the Caspiche prospect incorporating new and underexplored areas to the north and west of the property. Additional targets have been identified using the latest geochemical, geophysical and satellite processing technology and first pass prospecting will being in January, 2012
In March 1st, 2011 Exeter announced it had entered into an option agreement with Xstrata Copper to aquire 100% of the Sideral project adjacent to its Caspiche property in the Maricunga. Located immediately east of Capsiche and with an area of over 1200 hectares the company believes the potential for additional Caspiche style mineralization is good. Geophysics and first pass drilling has been completed on the property and drilling of new targets will commence with the 2011/2012 season in Q1 of 2012.
A number of additional regional targets have been identified from detailed mapping, geochemistry and geophysics. These have been ranked according to priority and will be tested progressively as the project evolves. The potential for additional discoveries is considered good.