Volcan Metallurgy
In order to finalize the pre-feasibility study for Volcan in early 2011, the Phase 1 Development Plan flow sheet was frozen in September 2010 and as a result Metallurgical test work conducted to that date was incorporated into the pre-feasibility study released in February 2011.
During the third quarter 2010, metallurgical work continued to advance under the supervision of experienced metallurgical consultants primarily at the Kappes Cassiday & Associates (“KCA”) facilities. Furthermore, a deeper understanding of the mineralogy and elemental content of the mineral feed has led to the recognition of the role of sulphide minerals in the metallurgical response of Volcan mineral, including the effects of limited amounts of copper in the deposit. With the introduction of grinding as a process option in the Phase 1 Development Plan, the possibility of separating sulphide through flotation can now be considered. Volcan is a primary deposit with little oxidization and sulphide content which, if not pacified or otherwise dealt with, may have a negative effect on reagent consumption. Work is incomplete but advancing well on metallurgical performance utilizing additional processing techniques from those contemplated in the Phase 1 Development Plan. For example, Flotation and SART, both of which were not incorporated into the pre-feasibility study. A brief explanation of SART and other aspects of the project can be found in the “Investors Briefcase” page, within “Investors” on this website.
What are we working with at Volcan?
The deposits of Volcan are large, low-grade bulk tonnage deposits having an average grade of 0.71 grams per tonne gold in 390 million tonnes of measured and indicated ore. Contained within these deposits are important higher-grade zones (>1.0g/t) that are fairly broad and vertically orientated along the mineralizing pathways having significantly higher grades than the average grade of the surrounding ore. These high-grade zones having a vertical structure, are well distributed vertically in our proposed open pit resulting in the ability to generate through selective mining a higher grade and lower grade feed throughout the mine life with minimal need to stockpile and rehandle the ore. As a result we decided to exploit the opportunity to grind and obtain better gold recovery from high grade ore while we employ very simple heap leach techniques for the low grade. With the high grade gold comes a large proportion of the limited copper that we see at Volcan. Copper can create issues for heap leach operations and by employing the split mill-leach circuit, we have the flexibility to more easily treat high copper ore in a controlled mill environment, capturing the gold quickly and reducing reagent consumption for the entire process.
From a mining perspective, in order to economically access the high-grade ore, we plan to also mine the low-grade and barren zones of the deposits. The segregation is achieved in the mine where standard practice is to assay blastholes on a 7-m by 8-m pattern on each 10 to 15-m mining bench, the results of which allow the higher grade, low grade, and waste to be correctly routed. Therefore, the mine plan developed for the pre-feasibility study exploits both the high and low-grade resources, resulting in an average strip ratio of 2.48:1.
The Dorado deposits are primary deposits meaning that they are still in the state that they were deposited and have seen little oxidation of the sulphide minerals. Fortunately, with the exception of Dorado Central, the sulphides contain only a small portion of the gold and have been proven to be amenable to conventional leaching methodologies. While not in the current flowsheet, the sulphides present an additional revenue opportunity having the split mill and heap leach flowsheet that Andina is pursuing.
Mineralogy at the Dorado deposits has some degree of variability with Dorado Central being the most complex from a gold recovery standpoint. As a result, the Phase 1 Development Plan as outlined in our pre-feasibility study for Volcan, excludes Dorado Central from the mine plan. However, we intend to re-incorporate the Dorado Central resources into an updated mine plan, upon validating the addition of Flotation to the process circuit, contemplated in the pre-feasibility study. We are cautiously optimistic that the necessary metallurgical work to re-incorporate Dorado Central and capture value in other sulphides will be completed during 2011, and in advance of finalizing a Feasibility Study for the project in 2012. Should Flotation be validated, not only do we expect to increase the tonnes processed by the re-incorporation of Dorado Central, we also anticipate higher gold recovery rates and the creation of a copper revenue stream. The principle sulphide minerals are Pyrite and Chalcopyrite which we have demonstrated can be readily separated in a rougher flotation step. We are working to reproduce results where a 19% Cu concentrate was produced in a cleaner flotation step on the rougher flotation concentrate. The cleaner flotation tailings will be largely gold bearing pyrite and it is through the treatment of these tails that we hope to further improve gold recovery.
Contained gold is fine grained with 80% to 90% being under 10 microns in size of which, approximately 10% to 12% is refractory (contained in sulphides) in nature. Encapsulation of the fine grained gold limits recovery if the gold is not liberated through crushing and/or grinding. As explained above, to maximize recoveries and the benefit of high-grade zones, the Phase 1 Development Plan utilizes a split flow sheet. High-grade ore will be fine (75 to 106μ) ground in a Mill, thereby enhancing liberation of attached or encapsulated gold grains when compared to a coarser crushed product, as used in the conventional Heap Leach Pad. We believe, the additional costs associated to fine grind high-grade ore in a Mill is economically warranted, operationally prudent and offers up-side as we continue work on flotation and sulphide extraction. Incorporating a small mill in to the process stream turns the sulfide headache in a heap leach only scenario into, improved gold recoveries, lower reagent consumption, lower operating costs.
The Dorado ore bodies contain limited amounts of copper and allunite clays, both of which, if not addressed, increase processing costs. Copper content is proportionately higher in the high-grade ore and would detract from optimal heap leach performance if left un-checked. Allunite is a softer material which will report in higher proportion to the fines after crushing, particularly HPGR crushing. By having a dual process circuit and HPGR technology, we believe that, we have designed a simple yet robust flow sheet that negates most of these challenges.
With allunite clays having a lower natural acidity and being softer than the surrounding rock, upon HPGR tertiary crushing, as proposed in our Phase 1 Development plan, much of the clays report as Fines and through a simple air sweep are directed to the Mill for processing. As a result, processing costs within the Heap Leach are minimized, as less cement and lime will be necessary to condition the ore for the relatively low pH of clay. Eliminating clay from the leach pad not only reduces the challenge to maintain pH levels, it also helps with pad percolation and stability allowing the pad to be stacked higher, achieving better use of the costly underliner and collection systems under the leach pad.
Because testing was incomplete and the Phase 1 Development Plan was established in September 2010 in order to have time to complete the engineering work, our plan does not address the costly impact that un-managed residual copper has on reagent costs, therefore proposed reagent consumption is high at 0.9 kg/tonne of ore in the Heap Leach Pad and 1.2 kg/tonne of ore in the Mill. During 2011, we expect to address residual copper, that we cannot capture in the mill, by validating SART technology as a viable addition to our process circuit. Incorporating SART is intended to liberate copper from solution thereby decreasing overall reagent consumption and costs while also providing incremental copper revenue potential from the low grade heap leach operation.