COPPER-GOLD EXPLORATIONS & DEVELOPMENT IN SOUTH AMERICA
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San Jorge
Overview
San Jorge is a development stage copper-gold porphyry project, with a preliminary economic assessment (completed April 2008). In February 2011, the Government of Mendoza approved the Company's Environmental Impact Study. The final step in the approval process included the ratification of the Environmental Impact Declaration ("EID") by the Provincial Legislature. On August 24, the Lower House of the Parliament of Mendoza voted against the EID during the run-up to the provincial elections that will be held on October 23, 2011. The Company is currently evaluating all of its alternatives including seeking legal redress and compensation.
Coro has an option to purchase 100% of San Jorge from Lumina Copper by making further staged payments of $9.15 million on or before May 2013. Upon commercial production, Coro pays Lumina USD$0.02 per pound copper based on proven and probable sulphide copper reserves as defined in a bank feasibility study, less the total cash payments.
Lumina will also receive a 1.5% NSR in all products produced other than copper.
Located in west-central Argentina in the Province of Mendoza, the large (115,000 ha) San Jorge property lies approximately 45 km north of the town of Uspallata and 250 km northeast of Santiago, Chile. San Jorge is located within a 120,000 hectares ranch controlled by the Company.
San Jorge is located within a 120,000 hectares ranch controlled by the Company. The nearest community is Uspallata, which is located 45km to the south. There are no competing agricultural interests in the area and no competition for water resources, which rise and fall into a subterrain basin with the Company's property. There is sufficient water supply for the proposed mining operation with anticipated consumption of 140 litres per second or the same amount of water consumed by a typical vineyard with drip irrigation of a 140 hectares size.
The EIS (submitted October 2008) was accepted for evaluation by the Provincial Government in Mendoza in March 2009. Since being accepted for evaluation, the EIS has been through four significant stages of the approval process and it is currently awaiting ratification which would be the fifth and final stage. In September 2009, the National Technological University ("UTN") of Mendoza completed its independent and impartial evaluation of the EIS on behalf of the Provincial Government of Mendoza. The UTN report stated that the EIS has satisfactorily complied with all national and provincial regulations, and has concluded that the Project, if developed in full compliance with these regulations, would have a highly positive economic impact on the Province of Mendoza in general and the district of Uspallata in particular.
The second stage of the approval process was the Sectoral Review, which was completed in February 2010. The Sectoral Review was a process coordinated and supervised by the Provincial Secretary of the Environment and included more than 10 opinions from provincial bodies which endorsed the project. The Review included presentations from the Natural Resources Department, Environmental and Urban Development Department, Irrigation Department, Provincial Environmental Council, Scientific and Technological Center, Municipality of Las Heras and the Hydrology Department among others. With the positive results and conclusions from the Sectoral Review, the third stage, a formal public hearing was held October 26, 2010 where the merits of the project were debated prior to the project being submitted to for approval. The Public Hearing was attended by more than 2,000 individuals and gave the people of Mendoza, and particularly the residents of Uspallata, the opportunity to express their views about the development of San Jorge.
The Interdisciplinary Commission for the Environmental Evaluation of Mining Projects ("CEIAM" in Spanish) of the Province of Mendoza then completed its compilation, collation and evaluation of the previously completed sectorial reviews; the outcome of the public hearing and public consultation process; and the results of additional hydrological studies, and recommended in December 2010, that the EIS be approved by the provincial government.
On February 7, 2011 the Provincial Government of Mendoza approved the EIS, and the resulting Environmental Impact Declaration ("EID") was submitted to the Provincial Legislature for ratification. The EID is conditional, inter alia, upon San Jorge complying with the highest standards of environmental protection, control and monitoring prior to, and during the construction and operation of the project, including the requirement for the paste tailings deposit to be made impermeable with a liner. In addition, San Jorge would be required to contribute 0.5% of metal sales on an annual basis to an environmental remediation fund, to be recovered upon satisfactory closure of the mine. Finally, San Jorge will be required to negotiate the terms of an agreement with the Provincial Government and the Department of Las Heras, where the project is located, whereby San Jorge would contribute to a social development fund to benefit the local community.
In May 2009, the Company filed on SEDAR its Technical Report; for further information please see this link.
On September 10, 2009, the company announced the completion of the evaluation of the San Jorge project environment impact study - please see the link to the report.
Coro has an option to purchase 100% of San Jorge from Lumina Copper by making further staged payments of $9.15 million on or before May 2013. Upon commercial production, Coro pays Lumina USD$0.02 per pound copper based on proven and probable sulphide copper reserves as defined in a bank feasibility study, less the total cash payments.
Lumina will also receive a 1.5% NSR in all products produced other than copper.
Location
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Environment
Environment concerns and issues are of highest priority to the Company. The Company appreciates that the development of San Jorge should have no to minimal environmental impact to the land, water and agriculture of the Province of Mendoza and communities within the province. The Company's mandate is to utilize modern mining practices while adhering to strict global standards.San Jorge is located within a 120,000 hectares ranch controlled by the Company. The nearest community is Uspallata, which is located 45km to the south. There are no competing agricultural interests in the area and no competition for water resources, which rise and fall into a subterrain basin with the Company's property. There is sufficient water supply for the proposed mining operation with anticipated consumption of 140 litres per second or the same amount of water consumed by a typical vineyard with drip irrigation of a 140 hectares size.
The EIS (submitted October 2008) was accepted for evaluation by the Provincial Government in Mendoza in March 2009. Since being accepted for evaluation, the EIS has been through four significant stages of the approval process and it is currently awaiting ratification which would be the fifth and final stage. In September 2009, the National Technological University ("UTN") of Mendoza completed its independent and impartial evaluation of the EIS on behalf of the Provincial Government of Mendoza. The UTN report stated that the EIS has satisfactorily complied with all national and provincial regulations, and has concluded that the Project, if developed in full compliance with these regulations, would have a highly positive economic impact on the Province of Mendoza in general and the district of Uspallata in particular.
The second stage of the approval process was the Sectoral Review, which was completed in February 2010. The Sectoral Review was a process coordinated and supervised by the Provincial Secretary of the Environment and included more than 10 opinions from provincial bodies which endorsed the project. The Review included presentations from the Natural Resources Department, Environmental and Urban Development Department, Irrigation Department, Provincial Environmental Council, Scientific and Technological Center, Municipality of Las Heras and the Hydrology Department among others. With the positive results and conclusions from the Sectoral Review, the third stage, a formal public hearing was held October 26, 2010 where the merits of the project were debated prior to the project being submitted to for approval. The Public Hearing was attended by more than 2,000 individuals and gave the people of Mendoza, and particularly the residents of Uspallata, the opportunity to express their views about the development of San Jorge.
The Interdisciplinary Commission for the Environmental Evaluation of Mining Projects ("CEIAM" in Spanish) of the Province of Mendoza then completed its compilation, collation and evaluation of the previously completed sectorial reviews; the outcome of the public hearing and public consultation process; and the results of additional hydrological studies, and recommended in December 2010, that the EIS be approved by the provincial government.
On February 7, 2011 the Provincial Government of Mendoza approved the EIS, and the resulting Environmental Impact Declaration ("EID") was submitted to the Provincial Legislature for ratification. The EID is conditional, inter alia, upon San Jorge complying with the highest standards of environmental protection, control and monitoring prior to, and during the construction and operation of the project, including the requirement for the paste tailings deposit to be made impermeable with a liner. In addition, San Jorge would be required to contribute 0.5% of metal sales on an annual basis to an environmental remediation fund, to be recovered upon satisfactory closure of the mine. Finally, San Jorge will be required to negotiate the terms of an agreement with the Provincial Government and the Department of Las Heras, where the project is located, whereby San Jorge would contribute to a social development fund to benefit the local community.
In May 2009, the Company filed on SEDAR its Technical Report; for further information please see this link.
On September 10, 2009, the company announced the completion of the evaluation of the San Jorge project environment impact study - please see the link to the report.
Community Consultation
Over the past two years, our Argentinean Team has worked extensively with the citizens and Government of Mendoza including Uspallata, the nearest community to San Jorge, to communicate the economic, environmental and social merits of the San Jorge Project.
Coro has a strong Argentine presence, with a local office established in Uspallata and a dedicated Argentine development team, led by Fabian Gregorio, (President of Minera San Jorge) and is now reviewing all its alternatives (legal and technical) with respect to the future of San Jorge.
Coro has a strong Argentine presence, with a local office established in Uspallata and a dedicated Argentine development team, led by Fabian Gregorio, (President of Minera San Jorge) and is now reviewing all its alternatives (legal and technical) with respect to the future of San Jorge.
Geology & Resources
San Jorge is a Permian age granodiorite porphyry stock with associated contact and hydrothermal breccias intruded into Paleozoic sandstones and shales. Strong silicification and quartz stockworking has developed in the sediments and porphyry.
The sequence of rocks has been fractured by strong NNE oriented structural controls. Best grades of copper and gold mineralization coincide with tourmaline brecciation. The porphyry shows a vertical zonation from hypogene mineralization at depth, passing upwards into a supergene enriched zone, which is overlain by a zone of oxide mineralization and finally into a thin, poorly developed leach cap.
The sequence of rocks has been fractured by strong NNE oriented structural controls. Best grades of copper and gold mineralization coincide with tourmaline brecciation. The porphyry shows a vertical zonation from hypogene mineralization at depth, passing upwards into a supergene enriched zone, which is overlain by a zone of oxide mineralization and finally into a thin, poorly developed leach cap.
Engineering Studies
The Company has completed two engineering studies to NI 43-101 Technical Report Standards; a) a Leach Only Copper Project yielding 25,000tpy copper cathode for 10 years, by Ausenco Canada Inc. and b) a Float Only Copper/Gold Project yielding an average 39,500mtpy of copper and 39,000ozpy of gold contained in concentrates for 16 years by GRD Minproc. Both these reports will be filed on SEDAR in 2008.
In June 2007, legislation was passed banning the use of toxic chemicals including sulphuric acid in mining activities (Law 7.722) which has meant the Leach Only project is not possible at this time. The Float Only project considered the oxide material as waste to be stockpiled separately.
The highlights from these reports are outlined in the table below:
In June 2007, legislation was passed banning the use of toxic chemicals including sulphuric acid in mining activities (Law 7.722) which has meant the Leach Only project is not possible at this time. The Float Only project considered the oxide material as waste to be stockpiled separately.
The highlights from these reports are outlined in the table below:
| San Jorge Technical Reports Summary | Float Only Case | Leach Only Case | |
|---|---|---|---|
| Base case (10%): ($1.65/lb Copper and $600/oz gold) |
Pre-tax NPV Pre-tax IRR After-tax NPV After-tax IRR |
$291 million 31% $82 million 18% |
$159 million 28% $77 million 20% |
| Upside case (10%): ($2.00/lb Copper and $600/oz gold) |
After-tax NPV After-tax IRR |
$220 million 29% |
$139 million 28% |
| Average cash operating costs: (years 1 to 5) ($/lb) |
Before credits Credits After credits |
$0.91 $0.22 $0.69 |
$0.90 $0.35 $0.55 |
| Total production: | Copper (tonnes) Gold (ounces) |
632,000 629,000 |
223,363 n/a |
| Average production: (years 1 to 5) |
Copper (tonnes) Gold (ounces) |
51,000 42,000 |
24,000 n/a |
| Mine life: | Years | 16 | 10 |
| Initial capital costs: | $ million | $277 | $162 |
| Prepared by: | GRD MINPROC | AUSENCO | |
| Report type: | Preliminary Economic Assessment | Preliminary Feasibility Standard |
|
| Date: | April 22, 2008 | April 3, 2008 | |