Tag Archives: Fenix

McEwen Mining progresses gold-silver heap leach plan at Fenix

McEwen Mining looks to have found a way to prolong its operations at the El Gallo Complex in Sinaloa, Mexico, with the feasibility study for its 100%-owned Fenix project highlighting a 9.5-year operational blueprint.

Using gold and silver prices of $1,500/oz and $17/oz, McEwen has estimated an operation able to produce 26,000 oz of gold production in phase one (years one to six) and 4.2 Moz of silver-equivalent in phase two (years seven to nine-and-a-half).

Phase one comes with an initial capital bill of $42 million and an all-in sustaining cost (AISC) estimate of $1,042/oz of gold. Phase two would require a $24 million incremental capital injection in year six, with the AISC calculated at $14.28/oz of silver-equivalent.

The company’s El Gallo mine (pictured) produced 240,000 oz of gold and 125,000 oz of silver from 2012-2017, yet, due to the transition to deeper sulphide mineralisation not amenable to heap leaching, mining and crushing activities ceased in the June quarter of 2018.

While residual heap leaching is set to continue to produce gold for several years, the company has been working on a new project for the El Gallo Complex, which is where Fenix comes in.

The Fenix 2018 preliminary economic assessment evaluated the potential extension of production in the complex, based on a two-phased transformation of the processing from the El Gallo mine, innovative in-pit tailings disposal and sourcing from several deposits.

The latest feasibility study has run with that plan, with the critical path environmental permits in hand for the first phase of production, according to Rob McEwen, Chairman and Chief Owner of McEwen Mining.

“Our next steps will involve detailed engineering, assessment of procurement options and the evaluation of financing alternatives,” Rob McEwen said.

He added: “The project will incorporate an environmentally progressive method of tailings management, using in-pit storage that creates multiple benefits, most importantly a secure containment of tailings, enabling better reclamation results.”

Rio2 and STRACON establish mining and construction alliance for Fenix gold project

Rio2 Ltd says it has taken another key step towards the development of its Fenix gold project, in Chile, by selecting STRACON SA as the lead mining services contractor for the project.

Both companies have executed an early contractor involvement (ECI) agreement for early works associated with contract mining services. Under the ECI agreement, the parties will work exclusively over the coming months to further optimise the mining and civil construction aspects of the project and conclude contract documentation.

The scope of the mining services contract will include mining of ore at the rate of 7.3 Mt/y (20,000 t/d), waste mining, drilling, blasting, hauling, supply of operating personnel and mining equipment, supervision and management, dust suppression and road maintenance. The scope also includes water transportation from Copiapó to the mine site and maintenance of the entire mobile fleet of equipment plus all pre-mining and civil construction activities including the construction of platforms, leach pad, ponds, access roads and waste material deposits.

The financial terms of the mining contract will use an alliancing-style commercial framework based on the mine plan, methodologies and productivity estimate assumptions contained in the prefeasibility study, which outlined a heap leach gold mine producing an average of 93,000 oz/y during the first 13 years and 50,000 oz/y during the final three years of production as stockpiled ore is being crushed and leached.

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 2020, the information gathering stage for the baseline study was finalised, with the EIA completed and filed with the Environmental Impact Assessment System in the March quarter. Environmental approval is expected in the June quarter of 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 the September quarter of 2021 and the start of earthworks for construction of the project is targeted for the December quarter of 2021.

The basis for Rio2 establishing a mining and construction alliance with STRACON at the Fenix gold project is a best for project business strategy, the company said. Together with STRACON, the Rio2 management team collaborated, implemented and executed with this same approach when they built and operated the La Arena and Shahuindo gold mines in Peru with Rio Alto Mining.

At Fenix, Rio2 and STRACON will work together as an integrated team, dedicated to exceeding goals, controlling budgets and adding value through exceptional performance while working in a safe and environmentally sustainable manner focused on every detail of the mining and construction process, Rio2 said.

“The alliance will implement an inclusive social policy as a priority based on the hiring of local personnel and service companies from Copiapó and the Atacama Region,” it added.

The payment model of an alliance includes reimbursement of 100% of contractor project costs plus a fee (corporate overheads and profit); a key performance indicator-based regime that rewards for outstanding performance and punishes poor performance; and unanimous, best for project, management and decision making and the selection of an integrated owner/contractor team on the basis of best person for each position and avoiding duplication of roles, Rio 2 said.

Alex Black, President and CEO of Rio2, said: “The signing of this ECI agreement with STRACON, a leading mining and civil construction contractor in Latin America, forms a key part of Rio2’s strategy to prepare for next year’s construction phase of our Fenix gold project.

“The Rio2 management team is pleased to work again with STRACON, this time in Chile, and look forward to further optimising the mining and construction solution for the project and finalising contract documentation in readiness for next year’s work program.”

Steve Dixon, Chief Executive Officer of STRACON, said: “The project will be delivered under a collaborative alliance agreement, a framework which has been successfully utilised over the past 10 years at several of STRACON’s projects throughout Latin America.”