PROPERTY & LOCATION

The Fenix Gold Project (16,050 Ha) is located in Atacama Region, in the Copiapo Province - Chile, specifically in the Maricunga Mineral Belt, approximately 160 kilometers northeast of Copiapo by International Road CH-31. It is one of the largest undeveloped pre-feasibility stage gold oxide projects in the Americas. 

This is a well-known mining district that contains over 70 million ounces of gold and hosts the La Coipa and Maricunga mines, as well as the Volcan, Caspiche, Lobo Marte and Cerro Casale deposits.

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The Fenix Gold Project is located approximately 20 km south of Kinross Gold’s La Coipa Au-Ag mine, 60 km north of Kinross’s Maricunga Gold Mine and 40 km north of Hochschild’s Volcan Gold Project.

There are no significant population centers in the immediate vicinity of the Fenix Gold Project. There are a small number of indigenous families within communities who raise crops and livestock in areas of the valleys that drain the region, but none in the immediate vicinity of the Project.





 

MINERAL RESOURCES & RESERVES 

MEASURED & INDICATED

5 MOZ

PROVEN & PROBABLE

1.8 MOZ

INFERRED

1.4 MOZ

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The mineral resource estimate was updated in 2019, based on data collected from 91 diamond drill holes (30,533 m of core) and 291 reverse circulation holes (84,101 m of RC cuttings) which is all the drilling completed on the project between 2010 and 2019. Surface samples (860 two-meter trench samples) have been used for the first time in the resource estimate.

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The mineral resource estimate was updated in 2019, based on data collected from 91 diamond drill holes (30,533 m of core) and 291 reverse circulation holes (84,101 m of RC cuttings) which is all the drilling completed on the project between 2010 and 2019. Surface samples (860 two-meter trench samples) have been used for the first time in the resource estimate.

A geological model has been created for the first time for this deposit based on the drill hole relogging program completed in 2018/2019. A grade shell of 0.15 g/t Au was generated in Leapfrog Software and used as an outer bounding shell for constraining the resource estimate. Resource model grades were estimated using ordinary kriging.

The table below summarizes the global mineral resource estimate for the Fenix Gold Project which is also constrained within a $1,500/ounce optimized open pit. The Mineral Resources are inclusive of the Mineral Reserves.

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Notes:

  1. Mineral Resources reported is inclusive of mineral reserves;

  2. The table includes all Measured, Indicated, and Inferred Resources contained within the “Resource Pit”, which represents the test for eventual extraction applied;

  3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves;

  4. Mineral Resources are reported in accordance with Canadian Securities Administrators (CSA) National Instrument 43-101 (“Standards of Disclosure for Mineral Projects” (NI 43-101) and have been estimated in conformity with generally accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM) "Estimation of Mineral Resource and Mineral Reserves Best Practices" guidelines;

  5. Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding;

  6. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.

The Mineral Reserves presented in the following table are constrained within a $1,225/oz optimized open pit and are reported as in-situ dry million tonnes and include 3% mining dilution and 97% mining recovery using a cut-off grade of 0.24 g/t Au.

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Notes:

The Mineral Reserve estimate with an effective date of August, 15 2019 is based on the Mineral Resource estimate with the same effective date that was prepared by Mario Rossi, Principal Geostatistician of GeoSystems International Inc. The Mineral Reserve was estimated by Mining Plus with supervision by Raul Espinoza, Senior Open Cut Engineer with Mining Plus Peru S.A.C. Mineral Reserves are estimated within the final designed pit which is based on the $1,225 /oz pit shell. The minimum cut-off grade was 0.24 g/t gold. Average life of mine costs are $2.42/tonne mining, $4.10/tonne processing, and $1.99/tonne processed G&A. The average process recovery was 75% for single stage crushing. Tonnes and gold ounces are both reported in millions. Small differences in total tonnage and grade may occur due to rounding. The Mineral Resource estimate is inclusive of Mineral Reserves.





 

GEOLOGY & MINERALIZATION

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Gold oxide mineralization at the Fenix Gold Project is sub vertical and is of a bulk, disseminated style. It is controlled by NW-SE faulting and the gold mineralization occurs in Black Banded Quartz veins, hosted in complex breccias and bound by fault structures.

 

Based on the geological features observed, the project is classified as Low Sulphidation type of mineralization. The mineralization is 2,500 m long, up to 600 wide and up to depths of 600 m. The mineralization remains open at depth and to the North East.

Metallurgical studies indicate that gold is usually fine and occurs in both native form and as submicroscopic gold in iron oxides. Gold composition is of high purity which is on average > 99% Au.

 

The Fenix Gold Project mineralization is comparatively clean with trace occurrences of copper, sulphur and mercury, even at depths of 600m below the surface. This makes the Fenix Gold Project unique in the Maricunga region as it is a pure oxide gold deposit with no transitional or sulphide mineralization.

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BLOCK MODEL SECTIONS & PRE-FEASIBILITY 2019

METALLURGICAL TEST WORK

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Several metallurgical testing campaigns have been carried out on the Fenix Gold Project ore since 2010, in order to evaluate its metallurgical behavior in a conventional heap leach process. In addition,  some mineralogical studies, in the form of gold deportment, have been conducted to explain the metallurgical results. The test work was undertaken by Kappes, Cassiday and Associates (KCA) and AMTEL Laboratories.

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Cyanide leach tests were carried out through bottle roll and column percolation tests under different conditions of residence time and crush/grind size. Data used for the PFS, based on column tests was performed on eleven composite samples. The tests were conducted at different crush sizes, from P80 of 100 mm to P80 of 9.5 mm, and at different residence times from 57 to 113 days and at different sample sizes from approximately 40 kg to 580 kg. All other conditions such as cyanide concentration and pH values were maintained equal for all of the tests.Conclusions from the tests are that gold extractions of 80% can be achieved, for material with a grade of 0.40 g/t Au and at P80 19 mm crush size.Test-work conducted in 2017 suggests that primary crushing (only) to 100 mm will produce 75% metallurgical recovery of the ore. Optimization studies of crush size/recovery vs capex are ongoing.





PROCESSING

The higher grade material will be crushed to 4” or P80 @ 100mm via two semi mobile jaw crushers. The crushed mineral will be transported by belt to a dome covered stockpile. The crushed ore  will then be transported to the heap leach via feeders and a conveyor belt. Lime will be added to the belt in route to the leach pad. Agglomeration of the mineral is not required. 

 

Processing operations will treat the solutions from the heap leach facility operating in a new ADR (adsorption, desorption and refining) plant capable of treating 20,000 tpd of ore to pad or 1,058 cubic meters per hour of pregnant solution to produce dore bars. The plant layout is designed to be upgradeable to 40,000 tpd and 80,000 tpd respectively.

 

Processing costs are estimated at $4.10 per tonne treated over the current life of mine which includes water purchase and water transport costs.

HEAP LEACH PAD 

The leach pad area will be prepared and covered with an impermeable liner. Corrugated, perforated drainage piping will be laid on the liner for collection of the pregnant leach solution. A protective layer of finely crushed, permeable ore will be placed on top of the liner to prevent damage from the mobile equipment and during ore loading. The ore will be stacked on the pad in 10m lifts.

 

The heap leach pad is located 4 km from the pit, at an elevation of 4,376m above sea level. The pad will be developed in four stages with a stacking volume for Stage 1 of 10.3 Mt; 30.6 Mt for Stage 2; 27.7 Mt for Stage 3 and 60.7 Mt for the final stage. The total pad capacity will be 129 Mt. The irrigation system will uniformly apply cyanide solution directly onto the levelled surface of the leach pile through a drip irrigation system, at an irrigation rate of 10 L/hm2 with an irrigation cycle of 90 days.

 

Once the mineral placed on the pad is saturated and in leach,  the pregnant solution will drain to the base of the pad, and via gravity will be piped directly to the ADR Plant Adsorbtion Circuit. The PLS Pond will be built and used for storage of solution as required. 

POWER

The power supply for the project will be generated through diesel generators. There will be 5 Generators, 3 in constant use, 1 for starting the conveyor belt system (which then becomes a source of generation) and a 5th in standby for programmed maintenance. ​ 

Grid power is located within 25 km of the mine site and connection to the grid will be considered as the Fenix Gold Mine is expanded.

MINING

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During Year 1 the mine production rate will be ramped up to 20,000 tpd of high-grade ore (> 0.40 g/t) for estimated gold production of 80,000 oz. The life of mine strip ratio (waste : ore) is estimated to be 0.81 : 1.

 

Mining will then progress for an additional 12 years at an average annualized rate of 20,000 tpd of high-grade ore and 7,000 tpd of low-grade ore and associated waste material. The high-grade ore will be crushed via a single stage crusher to a P80 size of 100mm and then re-handled and sent to the leach pad whilst the low-grade ore is stockpiled for crushing and leaching in later years of mine life.

 

Metallurgical test work shows average life of mine recoveries of 75% after single stage crushing to 100 mm, with more than 50% of the gold recovered during the first 45 days of leaching.

 

Mine design and estimation of the mining reserves was completed using conventional open-pit design methodology. The mine design is based on a $1,225 Lerchs-Grossmann pit optimisation computer analysis.

The pit design incorporates 20m benches made up of 2 x 10m mining benches utilizing a fleet of 70 tonne and 90 tonne excavators and 43 tonne dump trucks. Mining operations will be performed exclusively by a mining contractor under a mining alliance style framework for the entire life of mine.

WATER SUPPLY

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The 20,000 tpd project requires a water supply of up to 24 L/s. The Fenix Gold Project has access to water via a contract signed with Nueva Atacama, formerly known as Aguas Chañar S.A., the major water supplier to the town of Copiapo, to supply up to 80 L/s of treated town wastewater from its Piedra Colgada treatment facility located to the north of Copiapo. The original plan, outlined in the 2014 PFS, was to build a pipeline with associated power line from the Nueva Atacama facilities to Fenix Gold along the existing main road, international road CH-31, from Copiapo to Argentina which passes within 20 km of the Project. This plan is still being considered for the future expansion of the Project and discussions are ongoing with infrastructure companies who are interested and able to finance and build the pipeline and other mining companies who may wish to share in the benefit of the pipeline project. The capital costs, operating costs and cost of water for the larger water solution are set out in the 2014 PFS.

 

The water for the 20,000 tpd project will be transported by 30 tonne capacity water tankers, loading from the Nueva Atacama facility and discharging to the process plant located at the Project, a distance of approximately 158 km. The water transport route will be via international road CH-31 which passes within 20 km of the mine site.

 

Water costs are estimated to be $1.56 per tonne of ore processed for the first four years of production and decrease to $1.51 per tonne for the remaining life of the project. The water cost includes the purchase price and transportation of the water to site.

 

The Company is currently reviewing a number of additional water options involving permitted, unused water rights which are closer to the planned mining operations with the objective of improving the economics of the water supply to the Project.

LABOR AND SUPPLIES

The Fenix Gold Project is located approximately 140 km from Copiapo, a mining town with a population of approximately 175,000 people that supports major mining operations in the area. Skilled labour, specialist services and materials for the mining operations will be sourced locally. An on-site camp for 320 people will be built for the mine operations whilst administration and logistics support will be located in Copiapo.

SOCIAL

Proposed mining activities at the Fenix Gold Project are located between 4.300m and 4.900m above sea level where the altitudinal and climatic conditions of the area impose natural restrictions for the establishment of human settlements, plants and wild animals, with predominantly arid soils. 

The Colla Communities closest to the Project are located in Quebrada San Andres and Quebrada Paipote, where they carry out their main productive activities such as: animal breeding, grazing and agriculture (self-consumption), creation of handicrafts and collecting medicinal herbs. Occupations vary, according to each community’s perspective, as a reflection of their ancestral usage and current variants, mainly linked to ceremonial practices and transhumance practices. 

ENVIRONMENTAL

AND

PERMITTING

The preparation of an Environmental Impact Declaration (DIA) for a  geotechnical, geo-metallurgical and condemnation drilling program began in October 2018. In April 2019, the Environmental Impact Declaration was filed with the Environmental Assessment Service (EAS) and was approved in December 2019.

 

The environmental baseline study for the Environmental Impact Assessment (EIA) of the Fenix Gold Project has been progressing since November 2018. During 2019, engineering works and studies were completed for inclusion in the EIA. In January the information gathering stage for the baseline study was finalized. The EIA was completed and filed with the Environmental Impact Assessment System (SEIA) in Q1 2020 and environmental approval is expected in Q2 2021.

 

The preparation of sectorial permit applications is currently in process and will be submitted in conjunction with the filing of the EIA. The approval of sectorial permits is expected in Q3, 2021 and the start of earthworks for construction of the Project is targeted for Q4, 2021.

PRE-FEASIBILITY STUDY – AUGUST 2014