PROJECTS - Don Sixto (La Cabeza)
Engineering and Development Studies
The Company's strategy is to carry out progressive environmental and engineering studies concurrently with exploration. As confidence increases in the economic viability of Don Sixto, the investigations and studies will ultimately be carried out in sufficient detail to support a definitive feasibility study.
In December 2005, Sandercock & Associates, an independent Engineering consultancy based in Sydney Australia completed a report for Management coordinating the studies that were carried out in association with the 2004-2005 exploration program. The Sandercock report recommended various requirements for the next phase of engineering in conjunction with the current drilling program.
More recently, increases in the gold price and the resource potential at Don Sixto have required the studies to be re-focused on a larger scale project than was envisaged in 2004 and 2005.
Geotechnical:
Based on engineering logs and specific testwork, preliminary geotechnical criteria and rock mass ratings have been established for four of the potential open pits at Don Sixto.
At the start of the 2004 drilling program, consultants from Vector Engineering Inc (Vector) trained Exeter geologists to carry out geotechnical logging of all diamond drill core. All core is oriented using ball-mark orientation apparatus and is then photographed in a standard frame prior to logging. In addition to geological logging, RQD determinations and recovery measurements are made. A detailed fracture analysis completes the geotechnical logging and records fracture and joint planing, roughness, openings, fillings, termination and the alpha and beta angles.
In addition, FUUNSAJ (National University of San Juan Foundation) consultants reviewed the hydrological conditions in the main emerging deposits using drill hole data, geophysical surveys and hydraulic testing of reservoirs and wet drill holes. San Juan University Soil and Rock Mechanics Laboratory also carried out Uniaxial Compressive Strength (UCS) tests and bulk density determinations on selected sections of whole core - both mineralized material and waste (The Province of San Juan is immediately to the north of Mendoza and the city of San Juan is approximately 160km north of Mendoza City).
Vector used the testing, logging and hydrological assessments to analyse the rock mass characteristics, based on Bieniawski's Rock Mass Rating (RMR) system. This in turn allowed them to develop preliminary pit slope designs, an example of which can be seen by clicking on this link.
For this first review of data, in order to make the results quite conservative, Vector chose to use a fracture cohesion value of 50% of the measured average value and apply a static safety factor of 1.5. The main design criteria are outlined in the table below.
Pit Slope Design Criteria
| Parameter | Value |
|---|---|
| Overall Slope Angle | 55 0 |
| Face Angle | 70 0 |
| Bench Height | 20 m |
| Berm Widths | 4 - 5 m |
| Blasting Bench Height | 5 m |
| Mining Flitch Height | 2.5 m |
| Ramp Width | 20 m |
| Ramp Grade | 10% |
In summary these results showed that the rocks are hard, tight and competent and to date little groundwater has been encountered. Recommended overall pit slope angles based on the information to date are likely to be high with a favorable impact on waste to ore ratios.
Early in 2006, Exeter appointed Antonio Karzulovic LTDA (AKL) of Santiago as its geotechnical consultants based on their experience of similar rock types and gold operations in Santa Cruz Province in Argentina. AKL endorsed the work that had been carried out to date and expanded the program to more closely define the in-situ strength of rocks.
Current and future geotechnical work:
In the current drilling program, all drill core continues to be oriented, photographed and geotechnically logged.
A point-load test instrument was purchased in early 2006 and has been used to obtain data on the strength of selected drill cores at 10 metre intervals. This point load test data is in turn correlated with UCS measurements on adjacent drill core samples taken at 30 metre intervals. The UCS tests are carried out at the University of San Juan and at a Chilean rock test laboratory, Mecanica de Rocas.
All the data and techniques currently used are reviewed by AKL, and are then assembled in a geotechnical database for future modelling. Detailed structural mapping of all surface outcrops is also being carried out to provide information on the intensity, orientation and persistence of structures and the rock fabric in the different deposits.
Exeter has purchased its own water depth monitor for use on old drill holes so that more regular measurements of the static water levels can be recorded and more holes can be monitored. This combined with dynamic pump testing of selected holes is providing basic information on groundwater flow quantities and directions.
To date, the inferred groundwater flows have been small suggesting that water will not be a significant problem in mining. At the same time, it appears that mine groundwater will not be a significant source of the overall water requirements for production.
Mining Assessment:
The Hellman & Scholfield block model, the Vector geotechnical criteria and first order cost estimates from Sandercock & Associates were used by Australian Mine Design & Development Pty Ltd (AMDAD) to develop preliminary pit shapes using Whittle 4D optimization routines.
In very simple terms, the optimization process assesses a revenue value for each block in the block model and a cost to mine, transport and process it, taking into account its position in the deposit and how much waste will need to be mined to reach it. The pit shape is assumed to be smooth and conical with a geometric shape set by the geotechnical slope parameters. The Whittle software progressively drives these conical pits deeper in a series of shells until the net revenue becomes constantly negative. The NPV of the project revenue is calculated after each successive pit shell is completed and in this way an optimum pit depth and shell can be selected.
Based on the optimum pit shell for each deposit, AMDAD used Surpac software to add mining parameters such as haul roads, ramps, berms and benches to arrive at workable but conceptual pit outlines. Examples of the conceptual outlines for Cuello, Luna and Ojo can be seen in plan view by clicking on the following links.
These outlines and an assumed logical mining progression are used by Surpac to intersect the original block model. In this way progressive ore and waste volumes can be assessed and a first-pass grade and tonnage schedule determined. These preliminary "production schedules" are coarse but they are used to help assess possible ore and waste volumes for other studies. This in turn greatly assists management in overall project planning.
These exercises, at this stage of the project development, necessarily include resources in the inferred category. As a result the tonnages and grades determined by AMDAD have no status as reserves under any reporting authority and are only used for in-house modeling purposes.
From this AMDAD procedure, the indicated waste to ore ratios varied from less than 1 to just over 5 to 1 and averaged about 2.5 to 1. Luna, Mandibula and Ojo are all ridgeline deposits and had the lowest waste to ore ratios while Cuello had the highest and it appeared as though it will support mining to depths well over 100m from surface.
Current and future mining work:
The scope and quality of the geotechnical and hydrogeological programs outlined are regularly reviewed by our mining and geotechnical consultants. The data is coordinated in internal scoping exercises which are carried out at regular intervals as increases in the overall understanding of the deposits demand.
Metallurgy:
The first detailed metallurgical test program was completed in mid 2005.
In summary, the optimum flowsheet for all deposits tested was a conventional CIL circuit with a gravity concentration included in the grinding circuit to recover coarse gold. Gold recoveries averaged 92% or slightly higher on a bulk composite and three deposit composites when ground so that 80% passed 95 microns. Lower grade intercepts from Mandibula averaged 85% gold recovery at the same size. Silver recoveries were over 80% for all deposits.
Intercept Analysis
All of the 2005 work was carried out on drill core samples sourced from 2004 drilling program. When all assays and logs had been checked and were available, Exeter geologists and metallurgists completed an intercept analysis of every diamond drill hole. (RC chips are rarely used for sound metallurgical testwork because the fine breakage pattern can influence the results of many metallurgical tests).
We define an intercept as a continuous run of assay values considered to be potentially economic and which is thought by our staff to have a specific character, either geologically or metallurgically or from a mining point of view. In this type of analysis, if the rock-type, style of alteration or any other factor varies significantly in a continuous run of gold values, a new intercept is defined for a long as the new characteristic persists. It is not unusual for a long run of gold values to be split up into many different intercepts. In this way, metallurgists can assess whether the plant performance is likely to vary when something observable or measurable in the ore changes.
The agreed practical basis used for the Don Sixto analysis in 2005 was a nominal 1.0g/t Au cut-off grade; a minimum true mining width of 3 metres; allowable internal dilution (i.e. material less than 1g/t Au) of up to 2 metres; external dilution of 1 metre on the hanging-wall and 1 metre on the foot-wall.
By September 2006 a further 114 diamond drill holes had been completed with full results and drill-core samples available for metallurgy. A second intercept analysis of this data provided over 100 intercepts for a second detailed metallurgical testwork program. For this later analysis, a lower cut-off grade of 0.5g/t Au was used reflecting higher gold prices however the dilution parameters remained the same.
Composites, Head Assays & Variability Samples
From 29 diamond drill holes in completed in 2004, 69 intercepts were identified. Forty six of these (67%) were selected as representative for metallurgical work based on grade, rock-type, deposit, position on section and depth position.
Forty three of the intercepts were from Cuello, Luna and Ojo and 3 were from Mandibula. Because the geologists only recognized subtle differences in the rock types and their alteration, it was agreed that the 3 deposits themselves would be the best basis for compositing (leaving out Mandibula because of the small number of samples). The laboratory retained a portion of every intercept so that each could later be trialed through the chosen flowsheet procedures (variability testing). Another portion, using the same weight per metre for every intercept, was used to prepare composites for each deposit, Cuello, Luna and Ojo. A representative portion of each of these deposit composites was then split out and used to make a bulk composite (and the appropriate weight per metre of the three Mandibula intercepts was also blended into the bulk composite).
A metallurgical test strategy was designed based mainly on the highly representative bulk composite to develop an "optimized" flowsheet on that composite. Comminution (crushing and grinding) tests would be focused mainly on the three deposit composites, and the selected flowsheet conditions would be tested on each of these. More detailed testing of the flowsheet would result from trialing it on 26 of the individual intercepts in an extensive variability testing program.
The head assays of the composites were very close to the calculated values expected from the individual geological assays of the intercepts. This comparison of the results from two completely independent processes carried out by different organizations in different countries provided confidence that the quality of the sampling, the sample preparation and the assays was very good.
The head assays also confirmed that the gold and silver values obtained from diamond drill holes were considerably higher than the average from RC holes and indeed from the geological resource model. This will be investigated in more detail in the current drilling program. So even though the metallurgical test program was based on highly representative drill core, the gold grades were higher than the equivalent inferred resource grade at the same cut-off. The head assays are shown in the following table:
Metallurgical Composite Head Assays
| Assay | Units | Ojo | Luna | Cuello | Bulk |
|---|---|---|---|---|---|
| Au | g/t | 9.43 | 3.13 | 7.93 | 5.78 |
| Ag | g/t | 6.9 | 18.3 | 61.3 | 25.8 |
| S | % | 0.10 | 0.16 | 0.47 | 0.28 |
| Fe | % | 1.50 | 1.27 | 1.24 | 1.26 |
| As | ppm | 4320 | 105 | 80 | 1235 |
| Cu | ppm | 38 | 28 | 26 | 27 |
| Pb | ppm | 35 | 32 | 19 | 28 |
| Zn | ppm | 78 | 33 | 55 | 52 |
The low levels of sulphur (S) and base metals - copper (Cu), lead (Pb) and zinc (Zn) - are important environmentally and suggest that these deposits and their tailings will be relatively clean and non-reactive, and that low levels of cyanide use should be possible. Cuello is the source of most of the silver (Ag) and Ojo has a higher arsenic (As) content than the other deposits, but not abnormal in comparison to other epithermal gold ores.
Mineralogy
Samples of each deposit composite were examined mineralogically by consultant, Roger Townend & Associates. There was little difference in the light gangue mineral composition which was mainly quartz and feldspar. The heavier sulphides and iron minerals provided good indications of the style of minerals present.
The arsenic in the Ojo deposit occurred almost completely as arsenopyrite and the sulphides in Cuello were dominated by pyrite.
The gold and silver occurrences were variable. Mostly they occurred together as alloys - electrum -with variable low to high silver contents and as argentian gold. Near pure native gold was identified as was native silver. Minor occurrences of gold-silver selenides and silver selenides were seen and significant quantities of silver also occurred as acanthite.
The size of the gold, silver and electrum grains ranged from 100 microns down to 5 microns, and while most were seen in pyrite and goethite (oxidized pyrite), minerals of both elements were also seen in quartz.
Comminution
Crushing and grinding testwork on samples from all deposits confirmed the hard and abrasive nature of the mineralization.
The test work was carried out at a number of laboratories - San Juan University, Metcon Laboratories in Sydney, Australia and AMMTEC Laboratories in Perth, Australia. The results are summarized in the table below.
It appears that Cuello may be a little easier to break at a coarser size than the other two deposits and Luna may be tougher at finer sizes but overall there was not a great deal of difference. The abrasion indices were constantly high. While these results indicate a hard and abrasive ore by Australian and North American standards, they are considered to be similar to most other epithermal deposits in Patagonia.
Flotation
Flotation tests are unusual for simple gold ores; however we carried out a single, standard test on the bulk composite to get some indication of whether there was a gold association with sulphides.
The results on a 75 micron grind suggested that the association did indeed exist and that relatively high gold and silver recoveries might be achievable by flotation. The combined concentrate represented about 6% of the mass and contained 83% of the gold and 78% of the silver. A detailed table of the test results can be viewed here -
| Product | Weight (g) |
Weight (%) |
Assay | Distribution (%) | ||||
|---|---|---|---|---|---|---|---|---|
| (g/t Au) | (g/t Ag) | % S | Au | Ag | S | |||
| Rougher Conc. 1 | 13.0 | 1.3 | 190 | 853 | 2.58 | 3.93 | 41.7 | 12.6 |
| Rougher Conc. 2 | 17.8 | 1.8 | 125 | 414 | 10.8 | 35.4 | 27.7 | 71.9 |
| Rougher Conc. 3 | 11.6 | 1.2 | 27.1 | 108 | 2.05 | 5.0 | 4.7 | 8.9 |
| Rougher Conc. 4 | 15.4 | 1.5 | 15.1 | 66 | 0.53 | 3.7 | 3.8 | 3.1 |
| Rougher Tail | 947.8 | 94.3 | 1.10 | 6.2 | 0.01 | 16.6 | 22.1 | 3.5 |
| Calculated Head Grade | 1005.6 | 100.0 | 6.25 | 26.5 | 0.27 | 100 | 100 | 100 |
| Assay Head Grade | 8.78 | 25.8 | 0.28 | |||||
| Cumulative Product | Weight (g) |
Weight (%) |
Cumulative Assay | Cumulative Dis.(%) | ||||
| (g/t Au) | (g/t Ag) | % S | Au | Ag | S | |||
| Rougher Conc. 1 | 13.0 | 1.3 | 190 | 853 | 2.58 | 39.3 | 41.7 | 12.6 |
| Rougher Cons. 1 & 2 | 30.8 | 3.1 | 152 | 599 | 7.33 | 74.7 | 69.4 | 84.5 |
| Rougher Cons. 1 to 3 | 42.4 | 4.2 | 118 | 465 | 5.89 | 79.7 | 74.1 | 93.4 |
| Rougher Conc. 1 to 4 | 57.8 | 5.7 | 90.7 | 359 | 4.46 | 83.4 | 77.9 | 96.5 |
Gravity Concentration
We carried out gravity concentration tests to see if we could recover any coarser, free gold and silver ahead of leaching. Coarse gold and amalgam were present in all samples and recovered by the gravity equipment. Early gravity removal normally has several benefits associated with reducing the circuit inventory of gold and silver, but here subsequent tests also suggested the size and cost of the CIL plant may be reduced.
The tests were carried out at Metcon using a 3-inch diameter Knelson Concentrator. On a 75 micron grind of a bulk composite sample, approximately 40% of the gold was recovered which was about 10% more gold than was recovered on a 150 micron grind. The variability tests carried out on intercepts from all deposits later showed gravity recoveries of gold ranging from 8% to 58%.
Leaching
Leaching tests using cyanide on the representative bulk composite quickly established that gold recoveries of over 90% could be anticipated as well as relatively high silver recoveries of around 80%. The testwork conditions for the bulk composite were optimized and then tested on the Cuello, Luna and Ojo deposit composites. Similar results were obtained with not much variation. The identical treatment strategy on the individual intercepts gave results which were more variable as expected, but on average were similar to the larger composites. In summary:
- 95 micron grind; CIL; 45% solids; gravity concentration before leaching
- 93%-94% gold recovery on Bulk Composite
- 92.7% to 93.9% on Deposit Composites
- 80% to 97% on Intercepts - average 91%
- 80% to 85% silver recovery
- CaO & NaCN consumption ~ 0.40kg/t
All the leaching testwork was carried out at Metcon with experienced technicians under carefully controlled conditions. The flowsheet optimization test program on the bulk composite examined grind size, pulp density, cyanide concentration, gravity concentration and leaching with or without the presence of carbon.
Metcon noted a difficulty in assaying for silver in gravity concentrates and on carbon samples, and this was not resolved by the contract assay laboratories within the test program. Exeter is therefore treating the silver performance as indicative only. Procedures will be amended to ensure more reliable silver data in the next test series.
Our current interpretation of these results is that an average gold recovery of 91% might be expected when treating resource grade material at around 3g/t Au head grade.
Reagent Consumption
The low base metal and sulphur head assays mentioned above had led us to expect low cyanide and lime consumptions in leaching, and this was confirmed in the leaching test program.
The consumption of both reagents was around or just lower than 0.4kg per tonne of ore treated and was very consistent over the test program. Generally consumption of cyanide in the range 0.5kg/tonne to 0.75kg/tonne is expected for free-milling gold ores. Also, in practice, it is normally found that the consumption of these reagents in a full scale plant is slightly lower than the usage experienced in testwork.
| Composites : | Bulk | Ojo | Luna | Cuello | |
|---|---|---|---|---|---|
| Initial cyanide | NaCN (%) | 0.05 | 0.05 | 0.05 | 0.05 |
| Cyanide consumption | NaCN (kg/t) | 0.29 | 0.30 | 0.25 | 0.27 |
| Lime consumption | CaO (kg/t) | 0.36 | 0.37 | 0.38 | 0.32 |
| Intercepts : | Ojo | Luna | Cuello | ||
| Initial cyanide | NaCN (%) | 0.075 | 0.075 | 0.075 | |
| Ave cyanide consumption | NaCN (kg/t) | 0.43 | 0.39 | 0.37 | |
| Ave lime consumption | CaO (kg/t) | 0.40 | 0.36 | 0.33 | |
Low cyanide consumption is not simply an economic benefit. It will lead to lower levels in tailings, and in conjunction the proposed tailings treatment strategy this will assist Exeter in its objective of developing Don Sixto as a clean, minimum impact operation.
In this regard, while it is too early in the project's life to register it under the International Cyanide Management Code, Exeter intends to do at the appropriate time and to take the Code into account in all aspects of the development until that time.
Tailings Treatment
Relatively comprehensive settling tests were carried out on bulk composite leach tailings. Conventional tests were done at Metcon, but additional mini-pilot plant, viscosity and characterization tests were carried out by equipment manufacturers as well as geotechnical consultants in Perth, Western Australia.
Don Sixto tailings settle well. The material thickened easily to over 60% solids at a feed rate of 1.0 t/m2/h and to 64% solids at a feed rate of 0.7 t/m2/h.
These results suggest that it will be feasible for Exeter to consider installing a tailings thickener at the plant and will still be able to pump a thick tailings product to a dam. This strategy will maximize the re-use of water and cyanide in the plant. Additional testwork was carried out to find out at what density, a thickened, non-settling stable slurry or "paste" could be formed with the indications being around 70% solids.
In a paste fill tailings impoundment there is little or no free-draining water associated with the solids to be stored. In practical terms this removes the potential for contamination of groundwater and in fact the impounded solids usually lose water upwards through capillary action induced by evaporation, especially in a dry climate such as Don Sixto. By understanding whether these techniques may be feasible at an early stage of the project, we can develop a coherent, pro-active and responsible approach to the more sensitive aspects of the project and the surrounding area.
Current and future metallurgical work:
The September 2006 intercept analysis will lead to two different sets of intercept samples.
The first set will be made up from sticks of "quarter-core". Each length of diamond drill core is sawn in half as part of the geological assessment process. One half is sent away for crushing and finer sample preparation followed by analysis for gold, silver and other elements. The other half of the drill core was kept in the racks at Don Sixto. The core that remained has now been cut into two quarters, one of which is used for metallurgical work and the other remaining in the racks as "evidence" of what was in the ground.
The quarter-core samples will be made up into "intercept" samples and then the intercepts will be made up into composites that will be subject to detailed crushing and grinding tests. The tests will not only include the conventional "Bond" milling and abrasion indices but will include SMC testing, a variation of the drop-weight approach to characterizing and simulating breakage behaviour successfully developed by the JK Mineral Research Centre in Queensland, Australia over the last 25 years. SMC tests allow our engineers to assess the variability of different styles of mineralization at Don Sixto as well as homing in on the best overall comminution circuit.
The second set of intercept samples will be made up from "coarse crushed rejects" stored during the initial sample preparation of the half-core used for assays. An identical set of composites will be prepared from this material and they will be used for final flowsheet testing of gravity, flotation and leaching gold recoveries. The leached samples will also be tested so that the maximum amount of water can be recovered after processing, and the characteristics of their storage - either in a tailings dam or in a "dry" storage - can be predicted accurately. Other tests will help provide the design of the activated carbon gold recovery and the final cyanide destruction circuits. All tests are carried out by expert laboratories to international standards.
The main objectives of this program will be to provide chemical, metallurgical and engineering data of a sufficiently high standard for feasibility and external environmental studies of the project's characteristics.
Infrastructure & Development Considerations:
A series of studies to outline all the main infrastructure options was completed in 2005 by various consultants and Exeter staff. The studies included power, road transport, water sources and general supply and logistics. A series of visits and inspections was held with contractors in Mendoza Province to explain the project and its eventual needs and to get a first pass idea of the local construction industry's safety and quality standards, experience and costs.
The preliminary resource evaluations, mine design parameters, metallurgical testwork results and infrastructure outcomes were coordinated in a preliminary engineering study by Ausenco Limited, a well known Australian constructor of metallurgical plant and infrastructure specializing in international projects. The Ausenco study was then coordinated into an overall project development study for Exeter management by Sandercock & Associates which included mining and economic estimates. Both of these studies were based on Inferred Resources and Exeter's interpretation of their ultimate conversion to eventually exploitable reserves, and as such the results could not be published under Canadian 43-101 guidelines. The outcomes were however of considerable use to Exeter in determining the direction of current and ongoing exploration and development work programs.
The various studies carried out were based on a then-assumed throughput of 500,000 tonnes per year of ore. As more recent drilling results became available it was considered probable that Don Sixto would support higher throughputs and higher gold production levels and current infrastructure studies take such potential increased capacity into account.
Power
The costs of an on-site diesel-fired power station were compared to connecting the project to the Mendoza power grid. The basis of the comparison was installed power of just over 4 megawatts and operating power of 2.3 megawatts which related to 500,000 tonnes per year throughput. For the diesel option, rental costs for a station were obtained from an Argentinean agent of a reputable and proven equipment supplier. Grid supply costs were obtained from the two relevant power distributors in Mendoza province for supply from Nihuil hydropower station and from the town of Malargüe, a distance of approximately 200km in both cases.
Mains power was shown to be preferable to diesel-generated power, especially if the scale of operation and exploitable resources continue to increase. Grid power will require significant capital investment in a suitable power line, however the lower operating costs provided a relatively rapid return on the incremental investment. In addition, grid power would be a benefit to the remote community in the project area and some economic offsets are available for improving regional infrastructure.
In order to select the most appropriate source of power and route for transmission lines a study has started using an Argentinean contractor, Penta Sur SA, to review these factors and provide cost estimates as a basis for feasibility planning as well as negotiations with local authorities.
Road Transport and Logistics
Mendoza is served by two international flights per day from Santiago, Chile (45 minutes away) and 6 or more flights per day from Buenos Aires. It is a major and spectacular city of approximately 1,000,000 people at the foot of the Andes and is a major tourist destination. It services Argentina's largest and highest quality wine industry as well as significant oil and gas fields and a number of large cement works. Its service industries are well placed to support and help construct the Don Sixto project.
There are three different road routes from Mendoza City to the project area and all are approximately the same distance, 600km. Two are via San Rafael, a city of around 150,000 people and one is via Malargüe, the administrative centre of the Departmento (County) where the Don Sixto project is located and a town of approximately 30,000 people. Goods and equipment from the Buenos Aires/Rio Plata industrial area 1000km to the east can access the site via good provincial roads bypassing these towns. Heavy international loads can be routed through Buenos Aires or Rosario to the east or through Valparaiso near Santiago in Chile to the west, and then over the Andes Cordillera, a significantly shorter distance.
All three routes to site are unsealed for approximately 120km to 180km and will require different degrees of re-construction and repair in order to be suitable for regular transport during construction and operation. Exeter has carried out an in-house evaluation of the transport options and this was reviewed during a field visit by a Mendoza civil construction company as a basis for cost estimation. The central and western routes were preferred and only require reconstruction over relatively short distances. Selection of a preferred route will involve more discussions with transport companies, local authorities and the local community but is not a critical issue at this stage or in the near future. A new 15km access road to the project area will be required for all three options.
Water Supply
The project area is arid semi-desert with large areas of wind-blown sand interspersed with volcanic cones and outcrops. Almost all the water in the area is groundwater that runs through the sub-surface aquifers of basement sand gravels and fractured basalts, but occasionally forms shallow lagoons and lakes when it is forced to surface by rock obstacles. Several of these rare surface expressions of groundwater are close to Don Sixto and are significant economically to the local community as well as having environmental and conservation values.
FUUNSAJ (National University of San Juan Foundation) hydro-geological consultants carried out resistivity surveys as well as drill-hole pump tests in the vicinity of 2005 and concluded that the groundwater basins in the area were large enough, and had sufficient annual re-charge, to be used as the water source. At this time the nominal water supply required was around 2000 cubic metres per day. The increased throughputs now contemplated will require proportionately more water. FUUNSAJ also noted that the most convenient locations to harvest water were close to the existing surface water courses, but other locations could be exploited by more remote borefields.
Exeter's objectives are that project water usage is sustainable, non-contaminating, does not unduly impact local communities and meets the provincial water conservation policies. The same consultants, now called Grupo Ansilto SA are carrying out a second phase investigation in late 2006 to quantify and test water supplies from the closest aquifer to the project and confirm that the water is suitable for both process and potable uses.
Other infrastructure investigations to date have included communications, site buildings and accommodation.
Environment and Community:
Baseline environmental and social studies have been carried out by Consultores Independientes Socio Ambiente (CISA), an independent group of specialist consultants and lecturers from Mendoza University. Exeter has also established a framework of informal and formal meetings with leaders and individuals from the local communities and the Malargüe Department to provide ongoing, up-to-date advice on the project, its work programs and its potential for development. An experienced, independent, external environmental consultant reviewed the scope and results of all the early programs. The review was supportive and formed the basis to scope the ongoing programs needed to support a full Environmental Impact Assessment. Equipment, consultants and sub-contractors for these programs are currently being sourced.
Baseline Study
A nine-strong Mendoza-based team from CISA carried out a Socio-Environmental Baseline Study for Exeter in 2005 over a 5-month period involving four separate field study site visits.
Exeter's objective was to obtain an accurate, expert, independent diagnosis of the environmental and social characteristics of the area potentially affected by the development of a gold mine at Don Sixto. We also believed it important that it be carried out by Mendoza-based consultants as much as possible.
This would help in
- Understanding and prioritizing the environmental and community issues
- Formulating specific project policies and aligning our on-site methods and procedures to be sympathetic to the environmental issues and to take into account community values and concerns
- establishing the framework and scope of studies necessary to support an effective EIA (Environmental Impact Assessment) for a potential project development and the necessary permitting
CISA reviewed large amounts of data available from Government departments and developed maps and charts that described the project area in terms of the provincial environmental and natural system characteristics. For the field trips the team divided into social and physical-biological groups that worked individually.
Their comprehensive report described, graphically represented and illustrated their investigations and conclusions. Examples of some of the more important aspects were:
Climate:
The area is considered to be part of "Payunia" a volcanic regional landscape in the south-east of the Province that has a dry desert climate with cool to cold temperatures (mean annual averages ranging from 5 degrees to 15 degrees) and an average rainfall of 200mm to 300mm, mostly as storms in summer. Only a few light snowfalls are encountered in winter but these are important to local farmers so as to refresh the shrubs and provide winter-spring food for stock animals.
Soil Potential
The soils generally have relatively high salinity and the sparse vegetation makes them vulnerable to wind and rain driven erosion. As a result the region's suitability for agriculture is low however extensive livestock rearing is the main current economic activity. This has led to soil degradation and the region is considered highly prone to desertification. The wetlands ("mallines") such as Agua Nueva constitute the main soil resources in the area and are ecosystems in themselves.
Ecosystems
Wetlands at Agua Nueva, La Salinilla and La Bravina, while saline, are important areas of biodiversity, are very fragile and require appropriate integrated environmental management for their preservation. Further away from the project the wetlands at Agua Escondida are similarly important.
Hydrology
A catchment area analysis was carried out for the region and each catchment studied in terms of its geomorphology, interaction with others and the potential flow volumes and intensities.
Sampling points were selected and both water and soil samples were taken for study and analysis. Samples from the aquifers were also taken for benthos and macro-invertebrates. More water samples were taken at ranch and farm wells in the area. The results indicated the movement and the retention of natural chemicals through the systems and the interaction and correlation with life-forms. This first base-line review requires follow up for confirmation. Agua Nueva had the highest richness of living species and this was indicative of relatively better water quality.
Groundwater
The hydrogeology is controlled by aquifers within tertiary gravels (pediments) and basalts sloping from the major regional volcanoes with re-charge from snow melt in spring and from storm cells in summer.
Wells used by ranches in the area are relatively shallow and have varying levels of salinity. One or two wells had salinity levels sufficiently high to be of concern for long-term health issues.
CISA identified water as the main and most important resource in the project area from an environmental (flora, fauna and the broader ecosystems) as well as a human perspective. Project needs will also draw on groundwater resources and will need to be carefully planned and managed.
Flora & Fauna
The wetlands in the area provide food, shelter and breeding habitat for many varieties of fauna. 104 species of birds were observed in field surveys (aquatic and terrestrial) which is about a third of the total bird species observed in Mendoza province.
65 species of native plants were surveyed in different habitats in the area, ranging from the clumps and cushions of grasses typical of Patagonian steppes to the rushes, reeds and cover grasses found in the wetland vicinities. Near communities and ranches, poplars, willows and tamarind groves are used for wind-breaks and for shade.
Archaeology and Palaeontology
The Malargüe Museum is the registered authority for the Don Sixto area for archaeological and palaeontological investigations and clearances. The volcanic nature of the area has meant there is very low potential for palaeontological discoveries near surface. Nomadic tribes of Indians probably passed through the area though until the arrival of the Spanish and so the Museum identified areas of higher potential around the active exploration area. It is now a standard procedure to call the Museum for clearances of drill sites and other surface works in such areas.
Ongoing Environmental Work
Further studies are being carried out by CISA and Exeter personnel to augment and extend the database of relevant information.
CISA completed a program of additional water and soil sampling during the 2006 winter and reviewed the flora and fauna data for this season. A more detailed assessment of limnology of the area will continue by monitoring changes regularly through the 2006-2007 growth season together with corresponding benchmarking of any seasonal fluctuations in water quality.
An automatic weather station has been established on site as well as numerous dust fallout and rainfall monitors. Noise and PM10 dust surveys are planned to take place at quarterly intervals on and around the property and a photographic landscape analysis will allow evaluation of the intended developments once the feasibility study and EIA stuffy are well advanced.
Another detailed external review of the baseline work is also planned to check on the overall scope and quality of the work programs being carried out.
A community based program of collecting seeds and growing native vegetation has been planned with expert assistance from the recognised Argentinean authority on dry climate vegetation IADIZA, an organisation within the national research foundation, CRICYT. The intention is to develop seedlings in 2007 and start trial rehabilitation of exploration roads at Don Sixto during the following growth season.
Social & Community
CISA also carried out interviews and surveys within the local communities, at ranch outposts, at the exploration camp with local workers and in the town of Malargüe. Their objective was to establish an independent scientific and a cultural baseline description of the communities and their interactions with each other as well as outsiders such as Exeter.
CISA concluded that numerically the population was approximately equally split between the small communities and the ranch outposts. Infrastructure and services are hindered by the distance and difficulty of travel to main population centres such as San Rafael and Malargüe. The main economic activity is goat rearing and this in itself creates little or no local employment beyond the families engaged in it. Subsequently, most employment in the communities is through municipal and provincial government programs.
Exeter, through its Argentinean subsidiary, preferentially employs and trains local people as much as possible and prioritises the use of local services, including provisions for the exploration camp. We hold regular informal, as well as formal, community meetings to explain the project. At these we present what we are trying to achieve and to listen to the reactions and questions about our presence in the area. While most meetings are held in the small population centres, we also regularly travel to some of the more distant ranch outposts to provide similar information and listen to responses. We try to react to comments positively and have changed many practices since arriving in the area, such as our roster system, to take into account local preferences.
We also have regular meetings in the town of Malargüe which as the administrative centre of the region is responsible for the provision of most services to the communities close to the project. Malargüe local government and Provincial offices as well as specific offices in San Rafael and Mendoza are the main authorities that are closely involved in the permitting and monitoring of Exeter's exploration activities in Don Sixto at present. Regular meetings to explain plans and review progress are held with all parties as appropriate.
Exeter has a policy of open disclosure and regularly hosts visits to the property by local groups and community representatives, schools and Government officials.
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