Professional Documents
Culture Documents
TABLE OF CONTENTS
SECTION PAGE
TABLE OF CONTENTS
SECTION PAGE
TABLE OF CONTENTS
SECTION PAGE
TABLE OF CONTENTS
SECTION PAGE
TABLE OF CONTENTS
SECTION PAGE
TABLE OF CONTENTS
SECTION PAGE
LIST OF TABLES
TABLE PAGE
LIST OF TABLES
TABLE PAGE
LIST OF FIGURES
FIGURE PAGE
LIST OF DRAWINGS
A complete set of reduced-size drawings appears at the end of this volume. A complete
set of full-size drawings is included as Appendix Volume III.
APPENDICES
CAPITAL COSTS
General Construction Quotes
Process Equipment Quotes
Buildings
REPORTS
SIICA Reports
Hydrology Study
Well Drilling Report
Heap Stability Report
Used Equipment Inspection Reports
Crushing and Abrasion Testing
ARD Tests
1.0 SUMMARY
1.1 Overview
Queenstake Resources Ltd. is the 100% owner of the Magistral project which is located in
the Municipio of Mocorito, Sinaloa State, Mexico, approximately 40 kilometers east of
the town of Guamuchil. Kappes, Cassiday & Associates (KCA) and Pincock Allen &
Holt (PAH) were engaged by Queenstake to complete a feasibility study for development
of the project as an open pit mine and heap leach operation.
The Magistral project incorporates four deposits, referred to as the San Rafael,
Samaniego Hill, Sagrado Corazon and Lupita deposits. In addition, there are some
historic tailings within the Samaniego Hill area which will be processed. Gold
mineralization is located in the lower volcanic series of the Sierra Madre Occidental
Mountains and is hosted in a series of silicified stockwork and breccia zones. The proven
and probable ore reserves as estimated by PAH are as follows:
The project development plan includes four separate open pit mines feeding ore to a
single heap leach processing facility. The project is sized for a nominal ore processing
rate of 1.0 million tonnes per year. Ore and waste will be mined by standard open pit
methods utilizing a fleet of 52-tonne haul trucks matched with a 990 loader, with 988
loaders as backups. Ore will be crushed in 3 stages to 80% minus 12.5 mm and then
truck stacked in 8 meter lifts. Agglomeration is not considered to be necessary as the ore
contains little clay and is expected to generate few fines during crushing. The stacked ore
will be heap leached for a period of 120 days.
Based on the metallurgical testwork, gold recoveries for the deposits are estimated to
range from 63% for the Samaniego Tailings to 76% for San Rafael for an average of
72.9%. Over the life of the project it is expected that 268,500 ounces of gold will be
recovered.
Capital costs have been estimated for developing the open pit mine, process facilities and
associated infrastructure. Used equipment was incorporated in the mining fleet and
process facilities as deemed appropriate for the project. The leach pad is designed to be
expanded in Year 1 and again in Year 2 of the project. The pre-production mining fleet is
augmented in Years 1, 3, 4 and 5 as mining requirements increase. Pre-production
(Year 0) and the first quarter of Year 1 capital costs are estimated to be
US$ 13,692,000, of which IVA is US$ 828,000 and will be refunded during Year 1. An
additional US$ 923,000 is required as working capital for operations until positive
cashflow is achieved. From the second quarter of Year 1 through the end of the project,
additional capital expenditures will be required for leach pad, mining equipment and
other minor items. These are estimated to be US$ 3,349,000.
Operating costs are estimated as shown below. These are net costs after refund of the
IVA and fuel tax.
A cashflow analysis has been prepared for the project to evaluate the overall project
economics. Both pre-tax and after-tax cashflows have been examined. This analysis
results in the Net Present Value (NPV) and Discounted Cashflow Rate of Return
(DCFROR) values shown in the table below. The analysis is based on 100% equity
financing and a gold price of US$ 300/ounce.
Pre-Tax After-Tax
NPV NPV
Discount Rate (US$1,000’s) (US$1,000’s)
0% 13,297 10,463
10% 4,669 3,158
DCFROR 20% 18%
Break-Even Gold Price US$ 249/oz US$ 250/oz
A project development schedule has been prepared which indicates that approximately 11
months will be required from the time detailed engineering begins until the first
production of gold from the project.
Figure 1-1
General Project Location
1.2.1 Climate
The climate is predominately warm and dry with well defined wet and dry seasons. The
majority of the 827 mm of annual rainfall is received during the July through September
wet season. The average yearly temperature in the area is approximately 25 degrees
centigrade. Typical high temperatures are estimated to reach 43 degrees centigrade with
low temperatures being about 2 degrees centigrade.
1.2.2 Elevation
Topography at the project site is characterized by moderate to steep terrain, with
elevations ranging from 300 meters to 600 meters. A relatively steep feature known as
Samaniego Hill forms the northern portion of the project area. The central and southern
portions of the project area comprise a series of hills and ridges.
1.2.3 Access
Access to the project from the Sinaloa state capital city of Culiacan is via the paved, four-
lane Pacific Highway (Highway 15) for a distance of 100 kilometers to Guamuchil. From
Guamuchil, a local paved road extends 18 kilometers to the east to Mocorito. A gravel
road that travels through the villages of El Valle and Lo de Gabriel connects Mocorito to
the project site. Driving time from Guamuchil to the site is about one hour. Access
within the project area itself is currently provided by several rough dirt roads. Roads
leading to the project site will be upgraded and maintained as necessary to provide for
reliable year-round access. A section of new road will be constructed to route local traffic
around mining operations.
1.2.4 Power
Power for the project will be obtained from Comision Federal de Electricidad (CFE), the
Mexican power authority. A new 23 kilometer long power line will be constructed from
a CFE substation to the north along existing roads south to El Valle and then northeast to
the project site. A 545 kw diesel powered generator will provide backup power to insure
that the critical solution pumps can continue to operate in the event of a power failure.
1.2.5 Water
Based on a water exploration program, a well location approximately 1.5 kilometers north
of the processing facilities has been located. Raw water for the project will be pumped
from the well to a small pond and then distributed throughout the project as required.
Bottled water will be supplied for the project potable water requirements.
1.2.6 Communications
A cellular phone system will provide the project with external voice and data
communications. This system will include an intercom system connecting the various on
site offices. In addition to the on site intercom, both fixed and portable FM radios will be
used for communications between the operators and supervisors of the various production
departments.
1.2.7 Socioeconomic
The opportunity for employment, improved wages, an increased tax base, and better
access to services will result from the project. These are all potentially positive impacts
that will require no mitigation.
A total of sixteen families reside in the towns of Magistral and El Ranchito, which are
within the area of project influence. These families will be relocated to new housing,
complete with septic and community water systems, away from the project.
1.3.1 Geology
Queenstake’s Magistral Project occurs in the Sierra Madre Occidental mountain range, a
late Cretaceous to Tertiary age volcanic province that extends for hundreds of kilometers
through northwestern Mexico. Gold mineralization typical of low sulfidation epithermal
systems has been found along a series of structural zones that cut the volcanic sequence in
four areas, referred to as San Rafael, Samaniego Hill, Sagrado Corazon, and Lupita. The
structural zones have dimensions on the order of hundreds of meters along strike and
down dip, with the thickness of the zones ranging from a few meters to several tens of
meters. Individual zones consist of sheared and faulted volcanic rock that hosts variable
stockwork, breccia, and local quartz veining. Gold and silver minerals are typically
present as microscopic sized particles of native gold and electrum associated with quartz.
Silver and copper mineralization is also locally present in the zones.
1.3.2 Exploration
According to Mogul Mining N.L., in a report dated October 1995, gold mining activity in
Sinaloa has occurred sporadically since the arrival of the Spanish expeditions in the
1500’s. Mining activities in the region reached a peak in the late 1800’s and early 1900’s,
with more than 400 mines and 53 mills in operation.
Gold mining in the project area began in the late 1800’s, with production from the
Magistral Mine continuing intermittently until the 1950’s. Recent exploration of the
project area was conducted by Materias Minerales de Lampazos S.A. de C.V. (a
subsidiary of Vitro Industrias Basicas) and by Minera Tomex (a subsidiary of the
Lacana/Corona group). Exploration by both companies included geologic mapping and
geochemical sampling, with some drilling by Vitro.
In early 1995, Pangea Resources Inc. began exploring the project, initially for Mogul
Mining N.L. and subsequently for Santa Cruz Gold Inc. Between 1995 and 1997
extensive drilling was conducted by Pangea Resources/Santa Cruz Gold. Santa Cruz
Gold took control of all exploration activities in 1998 and continued a drilling program
that included metallurgical core holes and condemnation drilling. Queenstake Resources
gained control of the project through its merger with Santa Cruz Gold in 1999.
Exploration of the San Rafael, Samaniego Hill, and Sagrado Corazon-Lupita deposits by
Queenstake and its predecessors has included the drilling (mostly reverse circulation) of
754 holes, for a total of 84,000 meters of drilling with a total of 54,000 sample intervals.
1.3.3 Resource
Resource models were created by PAH using industry standard practices for the
combined San Rafael-Samaniego Hill deposits, for the Sagrado Corazon deposit, and for
the combined Central-Lupita deposits. The resource model was set up with model block
dimensions of 5- by 5-meters in plan, with a 5-meter bench height. The combined
measured, indicated and inferred geologic resource for the San Rafael, Samaniego Hill,
Sagrado Corazon, and Lupita deposits is 10.7 million tonnes averaging 1.48 g/t Au, for a
total of 509,900 contained ounces of gold, at a 0.4 g/t Au cutoff grade. The resource is
based on a tonnage factor of 2.6 tonnes per cubic meter. The resource model accounted
for known underground workings and stopes, which are not a significant part of the
tonnage being considered by the Queenstake project.
Reserves for the ultimate pit designs are summarized in Table 1-1. These reserves are
based on a gold price of $300 per ounce. PAH believes that sufficient dilution was
incorporated in the geologic modelling, so additional mining dilution was not included in
the reserve estimate. “Proven and probable” reserves are derived from the “measured
and indicated” categories in the resource block model. The reserves were calculated
using the MEDSYSTEM® software package from Mintec.
Table 1-1
Reserve Estimate
Gold Cutoff Ore Gold Grade Contained Waste Strip
Mine Area Grade g/t tonnes g/t ounces tonnes Ratio w:o
San Rafael
Proven 0.40 1,170,000 2.284 85,900 6,680,000 5.20
Probable 0.40 114,000 1.192 7,000
Subtotal 1,284,000 2.251 92,900
Samaniego Hill
Proven 0.42 2,471,000 1.859 147,700 22,822,000 6.93
Probable 0.42 656,000 2.182 46,000
Tailings 0.42 166,000 2.169 11,600
Subtotal 3,293,000 1.939 205,300
Sagrado Corazon
Proven 0.43 524,000 1.410 23,700 816,000 1.40
Probable 0.43 58,000 1.233 2,300
Subtotal 582,000 1.392 26,000
Lupita
Proven 0.43 672,000 1.397 30,200 4,148,000 4.16
Probable 0.43 325,000 1.330 13,900
Subtotal 997,000 1.375 44,100
Total 6,156,000 1.861 368,300 34,466,000 5.60
Estimate is based on a gold price of $300 per ounce, & recoveries & cyanide consumption rates from KCA.
PAH developed the equipment requirements, and capital and operating cost estimates
based on utilizing high quality used equipment with low hours.
After evaluating a range of bench heights, 5-meter benches were selected because they
provided a reasonable trade off between selectivity for grade control and operating costs.
The production schedule was developed so that the San Rafael pit, with its higher grades,
is mined out before the end of the second year. Mining of the tailings in the Samaniego
Hill area, as well as the pit itself, start in the third quarter of Year 1. Mining in the
Sagrado Corazon pit, is scheduled for Year 4. This was done to offset the required waste
stripping that is encountered in the Samaniego Hill pit in Year 4. Lupita is scheduled to
be the final pit mined with mining starting in Year 6 and completing in Year 7.
The mine equipment and manpower requirements were based on the mine operating three
8-hour shifts per day, 6 days per week. Additionally, the mine schedule allows for 11
days per year being lost due to holidays and weather. It is envisioned that mining of ore
will occur during day shift and swing shift but be avoided on night shift, where waste
production will be the focus.
Table 1-2
Mining Production Schedule
Year Tonnes Ore Ore Grade, Stripping Ratio, Oz. Gold
Grams/Tonne Waste to Ore Mined
0 86,000 2.06 4.45 5,700
1 923,000 1.98 6.59 58,700
2 1,021,000 2.00 4.70 65,500
3 1,009,000 1.60 6.22 52,000
4 1,005,000 1.40 6.18 45,100
5 1,007,000 2.47 6.49 80,000
6 877,000 1.75 4.44 49,400
7 228,000 1.63 1.25 11,900
Total 6,156,000 1.86 5.60 368,400
1.5 Processing
The ore will be processed using heap leach technology, which in world-wide application
over the past twenty years, has proven to be a safe, efficient, and environmentally
responsible means of gold recovery. It is estimated that 268,500 ounces of gold will be
recovered over the life of the project.
The ore will be crushed in three stages to produce a size of 80% passing 12.5 mm. Lime
will be added and the ore will be hauled by trucks to the leach pad where it will be
stacked in 8 meter lifts up to a maximum heap height of 48 meters.
The leach pad will be built in three phases and will cover a total of approximately
177,200 square meters. The leach pad will be constructed with a single 1.5 mm thick
linear low density polyethylene (LLDPE) geomembrane lain over a low permeability
underliner.
The ore will be directly leached in two cycles of 60 days each. Leach solution exiting the
heap will discharge into the process ponds. Pregnant solution will be processed through a
five stage carbon adsorption system. Gold will be recovered from the loaded carbon
using a pressure elution system followed by electrowinning and finally smelting of the
gold sludge to recover a doré product which will be shipped to a commercial refiner.
The pregnant and intermediate ponds will be constructed with dual synthetic
geomembranes overlying a low permeability underliner material. There will be
appropriate leak detection systems in each of the ponds. The excess solution pond will be
constructed with a single synthetic geomembrane overlying a low permeability underliner
material and will also include a leak detection system. The ponds have been sized to
allow operation of the entire heap leach facility as a zero-discharge system.
Based on laboratory testing by KCA and McClelland Laboratories, gold recoveries and
reagent consumptions for the various deposits have been estimated as shown in Table 1-3.
Table 1-3
Recovery and Reagent Requirements
Cyanide Lime
Recovery Consumption Required
kg/tonne kg/tonne
San Rafael 76.0% 0.86 4.0
Samaniego 72.4% 0.64 2.6
Samaniego Tailings 63.1% 0.15 2.0
Lupita & Sagrado Corazon 71.7% 0.18 2.5
Average 72.9% 0.55 2.9
Crushing and stacking will follow a two shift per day (8 hours per shift), 6 day per week
schedule. Leaching and operation of the recovery plant will follow a 24 hour per day, 7
day per week schedule.
Table 1-4
Capital Costs Summary
Facility Description Pre-Production Year 1 Qtr. 1
Capital Cost, Capital Cost,
US$ US$
Mine Equipment 2,382,000 1,097,000
Mine Development 587,000 5,000
Mine Shop & Warehouse 241,000
Crushing 1,088,000
Phase 1 Leach Pad 824,000
Process Pumps & Solution Application 235,000
Process Ponds 508,000
Process Plant 882,000
Laboratory 252,000
Power System 576,000
Process Water System 87,000
Infrastructure 1,057,000
EPCM 870,000
Owner’s Pre-production Costs 664,000
Total Direct Capital Cost 10,253,000 1,102,000
Contingency 1,123,000 103,000
Total Direct Capital Including Contingency 11,376,000 1,205,000
Operating Supply Inventory 282,000
Total IVA Tax (future credit to Queenstake) 821,000 8,000
Total Indirect Capital Cost 1,103,000 8,000
Total Initial Capital Required 12,479,000 1,213,000
The operating costs have been estimated and presented without added contingency
allowances based upon the design and operating criteria present in this report. The
processing, general and administrative operating costs are considered to have an accuracy
range of +/-10%. The direct mining operating costs are considered to have an accuracy of
+/-15%. Unit operating costs are summarized in Table 1-5.
Table 1 - 5
Operating Cost per Tonne of Ore
PRODUCTION DATA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total
Tonnes Ore Mined 923,000 1,021,000 1,009,000 1,005,000 1,007,000 877,000 228,000 6,070,000
Total Tonnes Mined 7,003,000 5,824,000 7,286,000 7,216,000 7,541,000 4,769,000 513,904 40,152,904
Strip Ratio 6.59 4.70 6.22 6.18 6.49 4.44 1.25 5.61
Tonnes Ore Crushed 963,000 1,021,000 1,009,000 1,005,000 1,007,000 877,000 228,000 6,110,000
Oz Gold Recovered 34,272 50,081 37,281 33,850 50,440 41,094 21,475 268,493
Total Revenue $ 10,281,600 $ 15,024,300 $ 11,184,300 $ 10,155,000 $ 15,132,000 $ 12,328,200 $ 6,442,502 $ 80,547,902
Process Management $ 0.45 $ 0.42 $ 0.42 $ 0.42 $ 0.42 $ 0.49 $ 1.32 $ 0.469
Crushing/Stacking $ 0.50 $ 0.50 $ 0.50 $ 0.51 $ 0.52 $ 0.53 $ 0.56 $ 0.511
Leaching $ 1.11 $ 1.20 $ 1.07 $ 0.77 $ 1.09 $ 0.67 $ 1.51 $ 1.011
Recovery $ 0.18 $ 0.23 $ 0.20 $ 0.19 $ 0.23 $ 0.24 $ 0.62 $ 0.227
Smelting & Refining $ 0.07 $ 0.09 $ 0.07 $ 0.06 $ 0.09 $ 0.08 $ 0.17 $ 0.080
Metallurgical Laboratory $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.010
Process Subtotal $ 2.33 $ 2.44 $ 2.27 $ 1.96 $ 2.36 $ 2.02 $ 4.18 $ 2.308
Assay Laboratory $ 0.25 $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.24 $ 0.35 $ 0.240
Water Supply $ 0.01 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.06 $ 0.018
General & Administrative $ 0.86 $ 0.78 $ 0.79 $ 0.79 $ 0.79 $ 0.91 $ 2.84 $ 0.894
Total Project $ 7.89 $ 7.19 $ 7.82 $ 7.97 $ 8.87 $ 7.38 $ 10.04 $ 7.945
The project is expected to employ a total of 156 people at the height of project operations,
of which 122 will be hourly and 34 will be salary. Only the project general manager is
planned to be an expatriate. The remainder of the salaried and hourly workforce will be
recruited locally, and where particular expertise and experience are required, nationally.
Most of the workforce is expected to originate in the local region. This will eliminate the
need for project accommodations and minimize relocation expenses.
1.8 Economics
Throughout the feasibility study the monetary units referred to are second quarter 2000
US dollars.
Table 1-6
General Project Timeline
Activity Time Frame
Project Development 9 months
Mining
6.25 years
Processing 7 years
Reclamation 1 year
Total Project 8.75 years
Planned annual gold production rates, which include an allowance for the startup period,
are projected to be:
Table 1-7
Annual Gold Production
Production Year Ounces of Gold Produced
Year 1 34,300
Year 2 50,100
Year 3 37,300
Year 4 33,800
Year 5 50,400
Year 6 41,100
Year 7 21,500
Total 268,500
For the purposes of the cashflow analyses, it is assumed that all pre-production costs
occur in Year 0, mining and processing operations commence in Year 1, mining and
crushing operations are completed the first quarter of Year 7, processing operations are
completed in Year 7, and reclamation is completed in Years 7 and 8. The base case for
economic analysis of the project uses a $300 per troy ounce price of gold. The table
below summarizes the results from the cashflow analyses.
Table 1-8
Results of Cashflow Analysis
Pre-Tax After-Tax
NPV NPV
Discount Rate (US$1,000’s) (US$1,000’s)
0% 13,297 10,463
7.5% 6,315 4,558
10% 4,669 3,158
DCFROR 20% 18%
Break-Even Gold Price US$ 249/oz US$ 250/oz
In order to estimate the relative strength of the project, base case sensitivity analyses (at
$300 gold) have been completed analyzing the effect on project economic indicators of
variations in revenue generated by the project (changes in gold price, gold recovery,
and/or ore grade), the capital cost of the project (not including working capital, owner’s
costs, or the initial operating supply inventory), and operating costs (including working
capital, owner’s costs, and the initial operating supply inventory of the project). The
sensitivity analyses were run on both before tax and after tax models. The project
sensitivity to changes in these variables can be illustrated by the after tax case which is
shown in Table 1-9 and Figure 1-2.
Table 1 - 9
DCFROR Sensitivity, after Tax
PCT OF DCFROR (AFTER TAX)
BASE REVENUE OP COST CAP COST
CASE
75% -12.0% 31.1% 28.8%
90% 8.5% 23.4% 21.4%
100% 17.68% 17.68% 17.68%
110% 26.1% 11.8% 14.6%
125% 37.3% 0.7% 10.8%
Figure 1 – 2
Sensitivity Analysis
SENSITIVITY ANALYSIS
DCFROR (AFTER TAX)
40.0%
35.0%
30.0%
25.0%
20.0%
DCFROR
15.0%
10.0%
5.0%
0.0%
70% 75% 80% 85% 90% 95% 100% 105% 110% 115% 120% 125% 130%
-5.0%
-10.0%
-15.0%
REVENUE
OP COST
CAP COST
Figure 2-1
General Project Location Map
Figure 2-2
Regional Project Location Map
KCA has been appointed Project Manager with overall responsibility for all aspects of the
Magistral feasibility study. Pincock, Allen & Holt (PAH) has been selected by
Queenstake to complete the ore reserve and mining aspects of the study. A Mexican
engineer affiliated with Queenstake has aided KCA in obtaining local information and
provided data to support estimates for project infrastructure. The finished study is
considered to be accurate to within +/-15% of capital costs and +/-10% for operating
costs, and capable of supporting project financing activities.
Queenstake has provided PAH with the geologic interpretations and exploration drilling
data for the Magistral project. PAH has developed a geologic model from the data,
calculated a verifiable ore reserve estimate for the project, produced an engineering
design for the mining of the reserve, and formulated a mining plan. The reserves have
been calculated in a manner that will meet securities exchange criteria and requirements.
Queenstake has provided KCA with the results of the metallurgical tests performed on
samples from the Magistral ore deposits for development of gold recoveries, rates of
recovery, crushing and abrasion indices, and reagent consumption. Metallurgical testing
was performed by KCA in Reno, Nevada and McClelland Laboratorios de Mexico in
Hermosillo, Mexico. KCA has utilized the testwork data to develop criteria that
established the basis for process engineering and design. Capital and operating costs for
processing have been estimated by KCA in accordance with the parameters presented in
the design criteria.
Those contractors whose work has contributed to the study, in addition to KCA and PAH,
include the following.
All data obtained from these sources have been reviewed and judged in the context of
KCA’s experience prior to their use in the development of this study.
Based upon the resource data supplied, KCA, PAH and their associates and
subcontractors have:
• developed ore reserve estimates for the deposits that meet securities exchange
requirements;
• developed open pit mining plans, mine production schedules, mining
equipment requirements, and project facility requirements (shop, offices,
warehouse, etc.);
• designed leaching and recovery systems and facilities;
• specified infrastructure requirements; and
• estimated the capital and operating costs associated with the construction and
operation of the project.
This study includes specification of all items and facilities necessary for the development
of the project. Among the primary facilities for which conceptual designs, capital costs,
and operating costs have been developed are:
• Mining equipment
• Mine support equipment
• Mine waste dumps
• Mine development
• Mine shops and offices
• Ore crushing and stacking system
• Heap leach pad and process ponds
• Leach solution handling system
• Gold adsorption, desorption, and recovery
• Laboratory facilities
• Access roads
• Power supply
• Process water supply
• Shops, offices and storage facilities
• Communications
• Waste disposal
• Site drainage
• Site security
• Reclamation plan
Verification of the Queenstake land position and mining concession was out of the scope
of work for this study. Queenstake has provided a land ownership map, and project
facilities have been designed to utilize this area as much as possible.
The project design and cost estimates include a project implementation schedule and
delineate the anticipated capital, operating, and reclamation costs for the life of the
project, including indirect construction costs such as engineering, procurement, and
construction management. Based upon tax input and other site considerations from
Queenstake, PriceWaterhouseCoppers, and KPMG, an economic analysis of the project
has been produced to indicate the overall viability of the project. The economic analyses
for the project have been completed under current laws and regulations.
Reduced size drawings (11 x 17) of the project facilities are included at the end of this
volume. Full size drawings are included in the appendix, Volume III.
The Magistral Project consists of 1,765 hectares of land located in the western foothills of
the Sierra Madre Occidental mountain range. The project site is located in the Municipio
of Mocorito, approximately 22 kilometers east of the town of Mocorito, which has a
population of approximately 15,000.
Access to the project from the Sinaloa state capital city of Culiacan is via the paved, four-
lane Pacific Highway (Highway 15) for a distance of 100 kilometers to Guamuchil. From
Guamuchil, a local paved road extends 18 kilometers to the east to Mocorito. A gravel
road that travels through the villages of El Valle and Lo de Gabriel connects Mocorito to
the project site. Access within the project area itself is currently provided by several
rough dirt roads.
2.3 Climate
The project is located at approximately W107O 49’ 34” longitude and N25O 37’ 30”
latitude. The climate is predominately warm and dry with well defined wet and dry
seasons. The majority of the 827 mm of annual rainfall is received during the July
through September wet season. Topography at the project site is characterized by
moderate to steep terrain, with elevations ranging from 300 meters to 600 meters. A
relatively steep feature known as Samaniego Hill forms the northern portion of the project
area. The central and southern portions of the project area comprise a series of hills and
ridges. The moderately dense vegetation at the site consists of brushes and shrubs with
widely spaced deciduous trees.
2.3.1 Temperature
The average yearly temperature in the area is approximately 25 degrees centigrade.
Typical high temperatures are estimated to reach 43 degrees centigrade with low
temperatures being about 2 degrees centigrade.
2.3.2 Evaporation
The average annual pan evaporation, as characterized by Ing. Celaya, for the San Joaquin
meteorological station, averages 1,582 mm per year. Average monthly evaporation is
presented in Table 5-14, located in Section 5.2.8, Heap Leach System Solution Balance.
2.3.3 Precipitation
According to precipitation data gathered by Ing. Celaya, rainfall averages 827 mm per
year at the San Joaquin station (located about 19 kilometers west of the project site). The
wet season runs from July through September and totals an average of 642 mm of rain.
The dry season, from October through June, averages a total of 203 mm of rain. Given
the average pan evaporation rate of 1,582 mm per year, the project will normally be in a
net evaporative climate.
Presented in Table 2-1 is the amount of precipitation recorded at the San Joaquin station
on a monthly basis.
Table 2-1
San Joaquin Monthly Precipitation
Magistral Project
Monthly Precipitation, mm, San Joaquin Station - July thru June Water Year
WET DRY
TOTAL SEASON SEASON
YEAR JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN YEAR TOTAL TOTAL
1978 0 3 0 20 0 0 37 0
1979 148 213 112 0 0 0 0 3 2 0 0 2 480 473 7
1980 148 356 63 23 4 27 50 0 1 1 0 0 673 567 106
1981 305 222 34 84 0 0 1 0 0 0 0 0 645 560 85
1982 97 226 372 3 109 56 39 31 22 12 0 0 964 694 270
1983 259 200 225 88 15 31 70 0 0 0 0 255 1,143 684 459
1984 463 294 75 44 15 79 50 0 12 0 0 16 1,047 832 215
1985 283 265 101 29 0 0 0 2 0 3 0 2 684 648 36
1986 284 234 53 131 0 9 570
1987 228 31 12 8 20 0 0 2 0 0 31 73
1988 2
1989 217 391 146 6 23 27 0 18 3 0 0 22 851 754 97
1990 568 229 243 116 114 215 21 10 0 0 0 44 1,558 1,039 519
1991 247 329 165 3 105 65 199 9 14 0 0 0 1,135 741 394
1992 192 235 138 2 5 32 33 13 0 0 2 54 705 564 141
1993 210 160 166 58 54 10 0 0 0 0 0 88 745 536 209
1994 167 380 195 53 5 9 0 0 0 0 807 547 261
1995 151 184 90 0 0 0 0 0 0 425
1996 10 74 0 32 0 0 44 0 16 175
1997 270 175
The maximum precipitation recorded in a 24 hour span at the San Joaquin station is
260 mm. Maximums for 24 hour periods at six other stations in the region range from 65
mm to 300 mm. It should be noted that the 100 year event that has been used for design
purposes at the project site, as calculated by Ing. Celaya, is 332 mm.
2.4 Seismicity
The Magistral project site is located in a relatively inactive seismic area compared to
areas near the coast and along the Baja Peninsula. The nearest earthquakes are caused by
sliding of the Pacific Plate in a northwest direction against the North American tectonic
plate. The plate boundary is located approximately 125 kilometers west of the project site
in the Gulf of California.
For design of pit walls and waste dumps, a pseudostatic analysis using an equivalent
horizontal seismic acceleration of 0.06 g has been used. The psuedostatic analysis of the
heap utilized an equivalent horizontal seismic acceleration of 0.03 g.
General
Project Location
Country Mexico
State Sinaloa
Municipality Mocorito
Nearest Major Metropolitan Center Guamuchil (40 km by road)
Capital City Culiacan (140 km by road)
Elevation
Mine 300 to 600 meters
Processing Facility 400 to 500 meters
Climate
Temperature
Maximum 43º C
Minimum 2º C
Annual Average 25º C
Wet Season (>100mm ppt per month) July through September
Dry Season (<50 mm ppt per month) October through June
Average Pan Evaporation 1582 mm/year
Communications
External Cellular phone system
Internal Two-way radio
Utilities
Electric Power Line Power
34.5 kv, 60 Hz
Water, Process
Primary Source Wells, on site
Quality Good
Avg. Quantity Required 20 m3/hr
Max. Quantity Required 41 m3/hr
General
Annual Ore Feed Rate 1,000,000 tonnes/yr
Crushing Rate
1,000,000 tonnes/year
3,226 tonnes/day
296 tonnes/hour (dry), design
Abrasion Index
San Rafael 0.16 (moderate)
Samaniego 0.32 (moderate)
Lupita & Sagrado Corazon 0.40 (moderately high)
Crusher Design
Lime Addition
Method Silo feed to final product
belt
Addition Rate
San Rafael 4.0 kg/tonne
Samaniego 2.6 kg/tonne
Samanigo Tailings 2.0 kg/tonne
Lupita & Sagrado Corazon 2.5 kg/tonne
Resource Average 2.9 kg/tonne
Leach Pads
Construction Phasing
Phase 1 Construct in Year 0
Lined Area 70,500 m2
Phase 2 Construct in Year 1
Lined Area 35,500 m2
Phase 3 Construct in Year 2
Lined Area 73,000 m2
Drainage Base
• 600 mm of -19 mm
crushed ore with
• maximum of 5% -75um
• Perforated pipe on
8m centers
Slopes
• Maximum 3:1 in
any direction
• Minimum 1% in primary
drainage direction
Heap Construction
Method of Construction Truck end dump w/
dozer push & rip
Nominal Heap Lift Height 8 meters
Number of Lifts 6
Heap Operation
Leaching Schedule
• 8 hours per shift
• 3 shifts per day
• 365 days per year
Leaching Time
Primary Cycle 60 days
Secondary Cycle 60 days
Ore Absorption
Dry Season 3.8 %
Wet Season 2.8 %
Solution Ponds
Number of Solution Ponds
Pregnant 1
Intermediate 1
Excess Solution 1
Recovery Plant
Mechanical Availability 98% +
Solution Processing
Method Carbon Adsorption
Number of Columns 5
Type Closed Top, “Carousel”
Column Dimensions (diam. x height) 1.75 m x 2.29 m
Pregnant Solution Flow Rate 128 m3/hr (nominal)
187 m3/hr (maximum)
Specific Flowrate 53 m3/hr-m2 (nominal)
78 m3/hr-m2
(maximum)
Tonnes Carbon per Column 1.4
Design Loading per Tonne Carbon 3,700 g Au (avg.)
5,000 g Au (max)
Tenor of Pregnant Solution (nominal) 1.2 gpt Au
Carbon Desorption Type Pressure
Carbon Capacity, Strip Column 1.4 tonnes
Desorption Flowrate 2 bed volumes per hour
Electrowinning
Number of Cells 2
Type Steel wool cathodes
Mechanical Availability 98% +
Carbon Regeneration
Type Vertical
Capacity 16.5 kg dry carbon/hr
Schedule Every third strip
Mechanical Availability 90%
The following summary was taken directly from the PAH report for this feasibility study,
Feasibility Resource Modelling and Mine Planning, Section 1, Executive Summary. The
entire PAH report can be found in the appendix.
Pincock, Allen & Holt (PAH) was retained by Queenstake Resources Ltd. (Queenstake)
to prepare the geology/exploration/resource model, mineable reserve/mine plan/mine cost
estimate, and contract the pit slope geotechnical parts of a feasibility study for
Queenstake’s Magistral Gold Project, Mexico. Kappes, Cassiday & Associates (KCA)
served as the overall project technical manager with responsibility for preparing the
feasibility document. The Magistral Project is located in Sinaloa state, of northwestern
Mexico and is planned as an open pit mining operation, with heap leach processing
facilities, operating at a production rate of one million tonnes per year. PAH has prepared
the mine plan to be in line with Queenstake’s operational philosophies and PAH notes
that the plan must be implemented as outlined in order to have an opportunity to achieve
the results projected by the plan.
3.2 Summary
Queenstake’s Magistral Project occurs in the Sierra Madre Occidental mountain range, a
late Cretaceous to Tertiary age volcanic province that extends for hundreds of kilometers
through northwestern Mexico. Gold mineralization typical of low sulfidation epithermal
systems has been found along a series of structural zones that cut the volcanic sequence in
four areas, referred to as San Rafael, Samaniego Hill, Sagrado Corazon, and Lupita. The
structural zones have dimensions on the order of hundreds of meters along strike and
down dip, with the thickness of the zones ranging from a few meters to several tens of
meters.
Individual zones consist of sheared and faulted volcanic rock that hosts variable
stockwork, breccia, and local quartz veining. Gold and silver minerals are typically
present as microscopic sized particles of native gold and electrum associated with quartz.
Silver and copper mineralization is also locally present in the zones.
Exploration of the San Rafael, Samaniego Hill, and Sagrado Corazon-Lupita deposits by
Queenstake and its predecessors has included the drilling (mostly reverse circulation) of
754 holes, for a total of 84,000 meters of drilling with a total of 54,000 sample intervals.
PAH finds that the average hole spacing of approximately 25 meters for the San Rafael
and Samaniego Hill deposits and of approximately 30 meters for Sagrado Corazon and
Lupita is generally sufficient for establishing a reasonable degree of confidence necessary
for defining resources and reserves. Most of the project drill hole samples were analyzed
by Chemex Laboratories in Reno, Nevada, an internationally recognized laboratory.
Queenstake and its predecessors have conducted various check assay programs with
Chemex and with another internationally recognized laboratory, Bondar-Clegg
Laboratories in Vancouver, British Columbia, for sample quality control. PAH found that
the analytical work was reliably conducted. PAH believes that the exploration and
sampling programs on the Magistral deposits have been conducted in a reasonable
manner following standard industry practices, with the resulting data generally
representative of the deposit mineralization, and providing a reasonable database on
which to base feasibility level resource and reserve estimation.
Resource models were created by PAH using industry standard practices for the
combined San Rafael-Samaniego Hill deposits, for the Sagrado Corazon deposit, and for
the combined Central-Lupita deposits. The resource model was set up with model block
dimensions of 5- by 5-meters in plan, with a 5-meter bench height. For each resource
model area, a block model representation of the mineralized zone envelope at a nominal
0.2 g/t Au grade was interpreted from geologic cross sections and then reinterpreted in
plan at 5-meter bench intervals. Drill hole sample intervals that constituted high-grade
outliers were variably capped to between 25 and 45 g/t Au, based on surrounding
samples. The sample data was composited to 5-meter intervals down hole and used for
gold grade estimation. Grade estimation was carried out using an inverse distance cubed
method, in order to reduce grade smoothing effects, constrained by the mineral zone
envelopes.
In addition, a soluble copper model was created from a limited number of composited
sample pulp analyses, with the model used to track cyanide soluble copper distribution in
the deposit. Tailings from the previous Magistral mill have also been incorporated into
the model.
The combined geologic resource for the San Rafael, Samaniego Hill, Sagrado Corazon,
and Lupita deposits is 10.7 million tonnes averaging 1.48 g/t Au, for a total of 509,900
contained ounces of gold, at a 0.4 g/t Au cutoff grade. The resource is summarized in
Table 3-1, and includes all material in the model, without regard to mineability, based on
a tonnage factor of 2.6 tonnes per cubic meter. The resource model accounted for known
underground workings and stopes, which are not a significant part of the tonnage being
considered by the Queenstake project. Confidence categories for the resource are based
on distance from the block centroid to the nearest gold composite value within the search
ellipsoid. Measured resource was considered from 0 to 15 meters, indicated resource
from 15 to 30 meters, and inferred resource from 30 to 45 meters as determined from
variography and geologic inspection of the data.
Because of the moderately dipping, tabular nature of the mineralized structural zones,
grade control will be important to keep both mineral dilution and mineral loss to a
minimum. Some dilution and loss will be inevitable and will be inversely proportional to
the structural thickness of the mineralized zones, which range from a few meters to
several tens of meters in thickness. PAH has allowed for dilution and loss through a
combination of the compositing and grade modelling methodology used resulting in an
average dilution of 40 percent, at a 0.40 g/t Au cutoff grade. PAH believes that the
resource model reflects the dilution and loss that would reasonably be expected by the
proposed open-pit mining operation using conventional truck and loaders.
Additional resource potential exists in the La Prieta zone at Samaniego Hill with the
structure open along strike and down dip with good thickness and high grade. Further
potential exists in other structural zones in the project area that have had little or no
drilling.
TABLE 3-1
Geologic Resource Summary
(0.40 g/t Au cutoff grade)
San Rafael 2,072 1.77 117,900 447 1.24 17,900 10 1.02 300 2,529 1.67 135,900
Samaniego Hill 3,495 1.63 183,000 1,031 1.85 61,200 32 1.28 1,300 4,558 1.68 245,600
Sagrado Corazon 978 1.08 33,900 238 0.82 6,300 6 0.80 200 1,222 1.03 40,400
Central-Lupita 1,257 1.11 44,900 842 1.00 27,000 58 1.63 3,000 2,157 1.08 74,900
Magistral Mill Tailings 167 2.17 11,700 65 0.68 1,400 0 0.00 0 232 1.75 13,100
TOTAL 7,969 1.53 391,400 2,623 1.35 113,800 106 1.42 4,800 10,698 1.48 509,900
The following summary was taken directly from the PAH report for this feasibility study,
Feasibility Resource Modelling and Mine Planning, Section 1, Executive Summary. The
entire PAH report can be found in the appendix.
The Magistral Project is an open-pit gold mining project, which will utilize front-end
loaders and trucks as the primary mining equipment. Production is scheduled for one
million tonnes of ore and on average 5.6 million tonnes of waste per year over the 6.5
years of the project. Total reserves are estimated at 6.2 million tonnes of ore at a grade of
1.86 grams per tonne and a strip ratio of 5.6 tonnes of waste per tonne of ore. These
reserves will come from four different pits within the project area.
PAH developed the equipment requirements, and capital and operating cost estimates
based on utilizing high quality used equipment with low hours. In general, the basis for
the used equipment prices was a letter from D.H. Blattner & Sons Inc. to Queenstake
regarding the sale of used equipment. Total mine capital over the life of the project is
$6.8 million. Operating costs average $0.745 per tonne mined. Capital and operating
costs are in terms of second quarter 2000 dollars.
Design of the ultimate pits was based on the results of a floating cone analysis that was
conducted on each of the mine areas, using gold prices range from $175 to $400 per
ounce. This analysis showed that at a $300 per ounce gold price the most profitable
designs for San Rafael and Sagrado Corazon should be based on the $200 floating cones,
and the Lupita design should be based on the $275 floating cone. Samaniego Hill
actually produced a better result when the $350 floating cone was used, even when it was
evaluated at a gold price of $300. PAH based the majority of the Samaniego Hill design
on the $300. A benefit of this analysis is that, the ultimate pit designs, and thus the
production schedule for the first two years, are based on a gold price of $200 per ounce.
After evaluating a range of bench heights, 5-meter benches were selected because they
provided a reasonable trade off between selectivity for grade control and operating costs.
Pit slope and waste dump design parameters were based on the geotechnical analysis
done by Mr. Brennan Lang of Ground Control Engineering Ltd. (GCE). The GCE report
has been included as Appendix C of the PAH report. To minimize stripping
requirements, haul roads were designed as single lane roads at a 10 percent grade for the
bottom 4 to 6 benches of each pit. Above this point, two-lane roads with a maximum
grade of 8 percent were incorporated into the design. Waste dump designs were based on
the dumps being built at the angle of repose and then regraded to a slope of 2.5 horizontal
to 1 vertical (22 degrees), for reclamation. To minimize the disturbance area and the
operating costs the San Rafael pit will be backfilled with waste. Table 4-1 summarizes
the mine design parameters. The ultimate pit and dump designs are shown in Figure 4-1.
Reserves for the ultimate pit designs, shown in Figure 4-1, are summarized in Table 4-2.
These reserves are based on a gold price of $300 per ounce. PAH believes that sufficient
dilution was incorporated in the geologic modelling, so additional mining dilution was
not included in the reserve estimate. “Proven and probable” reserves are derived from
the “measured and indicated” categories in the resource block model. The reserves were
calculated using the MEDSYSTEM® software package from Mintec.
TABLE 4-1
Mine Design Parameters
Bench Height 5 meters
PIT OUTLINE
SAN RAFAEL
(AFTER BACKFILL)
LUPITA
SAGRADO
CORAZON
Prepared
By
Magistral Project Feasibility Study Page 4-5
TABLE 4-2
Reserve Estimate
Gold Cutoff Ore Gold Grade Contained Waste Strip
Mine Area Grade g/t tonnes g/t ounces tonnes Ratio w:o
San Rafael
Proven 0.40 1,170,000 2.284 85,900 6,680,000 5.20
Probable 0.40 114,000 1.192 7,000
Subtotal 1,284,000 2.251 92,900
Samaniego Hill
Proven 0.42 2,471,000 1.859 147,700 22,822,000 6.93
Probable 0.42 656,000 2.182 46,000
Tailings 0.42 166,000 2.169 11,600
Subtotal 3,293,000 1.939 205,300
Sagrado Corazon
Proven 0.43 524,000 1.410 23,700 816,000 1.40
Probable 0.43 58,000 1.233 2,300
Subtotal 582,000 1.392 26,000
Lupita
Proven 0.43 672,000 1.397 30,200 4,148,000 4.16
Probable 0.43 325,000 1.330 13,900
Subtotal 997,000 1.375 44,100
Estimate is based on a gold price of $300 per ounce, & recoveries & cyanide consumption rates from KCA.
The production schedule was developed so that the San Rafael pit, with its higher grades,
is mined out before the end of the second year. Mining of the tailings in the Samaniego
Hill area, as well as the pit itself, start in the third quarter of Year 1. Incorporation of the
tailings was delayed until this point in order to let the mine and process facilities get
through start-up and establish operating practices. Since the tailings are at the surface
they can be incorporated at any time, provided that they are mined and processed at a
ratio with fresh ore of 1 tonne of tailings to 10 tonnes of fresh ore, as dictated by
metallurgical testwork. The tailings need to be moved relatively early in the mine life in
order to facilitate waste stripping in the Samaniego Hill pit. Mining in the Sagrado
Corazon pit, is scheduled for Year 4. This was done to offset the required waste stripping
that is encountered in the Samaniego Hill pit in Year 4. Lupita is scheduled to be the
final pit mined with mining starting in Year 6 and completing in Year 7.
Should additional exploration show that there are enough high-grade tonnes in the
Samaniego Hill area to justify an underground operation, the access to the underground
operation could potentially be from the San Rafael pit. In the event that this is done, the
San Rafael dump would have to be redesigned; however with the switch to underground,
the waste stripping in the Samaniego Hill pit would be reduced thus reducing the required
dump capacity. With the current production schedule, the decision on underground
mining in Samaniego Hill would need to be made in Year 2 or early in Year 3 to avoid
excess stripping.
The mine equipment and manpower requirements were based on the mine operating three
8-hour shifts per day, 6 days per week. Additionally, the mine schedule allows for 11
days per year being lost due to holidays and weather. It is envisioned that mining of ore
would occur during day shift and swing shift but be avoided on night shift, where waste
production will be the focus. This split in production is to minimize stockpiling of ore
since the crusher only operates two shifts per day. Avoiding mining at night will also
benefit ore control for which selectivity will be important.
Equipment selection and costing was based on the list of D.H. Blattner equipment that
Queenstake provided to PAH . The list included the equipment hours and purchase price.
PAH was able to inspect some of the trucks and other equipment on the list along with
the maintenance records. D.H. Blattner also provided PAH with maintenance records for
certain other equipment on the list. In general the equipment PAH examined appeared to
be in good condition and well maintained. In comparison to the age, the equipment had
relatively low hours because it had been used only for seasonal construction. If the
equipment that Queenstake obtains is of equivalent or superior quality to what PAH
observed, then the goals of the Feasibility Study should be achievable.
With used equipment, maintenance becomes a key issue in obtaining the availabilities
and production rates that were used in the Feasibility study. A dedicated preventive
maintenance program will need to be incorporated into the overall maintenance program.
Queenstake is committed to developing an equipment maintenance program that makes
the production and cost goals in this Feasibility Study achievable.
Drill requirements were based on different blasting patterns being used in the ore and
waste. A tighter pattern was required in the ore in an effort to achieve sufficient
fragmentation so that the size of the ore would be less than 700 mm. To reduce drilling
and blasting costs the pattern in waste was expanded because fragmentation was not as
critical. Since the ore bodies are dipping, PAH assumed that 25 percent of the waste
would still need to be shot using the ore blast pattern.
An additional drill will be required for controlled blasting. Holes for controlled blasting
will be 76 millimeters in diameter and spaced 1.2 meters apart. One line of controlled
blasting holes will be shot around the final highwalls. A detailed description of the
controlled blasting requirements is contained in the geotechnical report in Appendix C of
the PAH report.
For loading and hauling a fleet of Cat 990 front-end loaders, supplemented with Cat 988
front-end loaders, matched with Cat 773 haulage trucks was selected. To minimize the
road and ramp size and thus minimize the stripping, Cat 773 trucks were selected. To
supplement the waste production and work with the stockpile a Cat 988 loader was
selected.
The support equipment consists of a D9 dozer, D8 dozer, 824G wheel dozer, 14G motor
grader, and 769 water truck. Dozer requirements were based on the D9 being responsible
for the construction and contouring of the dumps, the D8 being used for leach pad
maintenance, and the 824G used for clean-up in the pit.
For all of the equipment the mechanical availability was based on the cumulative number
of operating hours on the equipment. Using this approach the availability decreased as
the equipment aged, thus providing a more accurate and realistic estimation of equipment
requirements. Each piece of equipment was tracked separately so that when additional
units were added to the fleet their availability corresponded to their age rather than using
the existing fleet availability. Table 4-3 shows the equipment requirements over the life
of the project and Table 4-4 provides a summary of the mining capital expenditures over
the life of the project which totals $6.8 million. A contingency of 10 percent of the price
and refurbishment cost was included in the capital estimate. Replacement capital of 25
percent of the pre-production major equipment cost, including refurbishment, has been
included in Year 4.
Operating costs have been based on the equipment being in good used condition. It was
assumed that high quality equipment with low operating hours will be employed at the
mine. Base hourly operating costs for the Caterpillar equipment were developed using
the Caterpillar Handbook. Tire life and fuel consumption were based on the average
values.
Labor rates were provided to PAH by KCA. These rates include a benefit package at 44
percent and overtime for hourly employees at 18 percent. Costs for consumables,
including diesel and blasting supplies, were based on quotes obtained by Queenstake.
Diesel costs were based on $0.39 per liter. KCA provided the cost estimates for contract
services, the pick-up truck leases, the mine component of the shop costs, and the mine
component of general and administrative costs. These costs were constant over the life of
the project. These costs are included in the general mine costs, which also includes the
cost for laborers and the service equipment operating costs.
Table 4-5 summarizes the unit operating costs over the life of the project, which average
$0.745 per tonne mined. Per tonne operating costs range from a low of $0.64 in Year 1 to
a high of $1.21 in Year 7. Higher costs are experienced in Year 7 because of the low
tonnage and the long ore haul from the Lupita pit.
TABLE 4-3
Queenstake Resources Ltd.
Magistral Project
Equipment Requirements By Period
Major Equipment Pre-Prod. Q1Y1 Q2Y1 Q3Y1 Q4Y1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
ECM 690 1.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Cat 990 Series II Wheel Loader 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Cat 988 Wheel Loader 0.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Cat 773D Haulage Truck 2.0 4.0 4.0 5.0 5.0 4.0 6.0 7.0 9.0 5.0 4.0
Cat D8R Track Dozer 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Cat 824G Wheel Dozer 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Cat 14G Motor Grader 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Cat 769D Water Truck 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Control Blasting Drill - ECM 370 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Cat D9R Track Dozer 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
TABLE 4-4
Queenstake Resources Ltd.
Magistral Project
Summary of Capital Expenditures
Classification Pre-Prod. Q1Y1 Q2Y1 Q3Y1 Q4Y1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total
Mining Equipment
Major Equipment - Purchase 1,747,000 954,000 0 161,000 0 0 161,000 161,000 322,000 0 0 3,506,000
Service Equipment 229,000 16,000 0 16,000 0 0 0 0 0 0 0 261,000
Major Equipment - Refurbishment 70,000 55,000 0 10,000 0 0 10,000 10,000 20,000 0 0 175,000
Contingency on Used @ 10% 204,600 102,500 0 18,700 0 0 17,100 17,100 34,200 0 0 394,200
Major Equip. Erection Costs 2,900 2,900 0 0 0 0 0 0 0 0 0 5,800
Transportation To Site - From Nogales 66,506 43,319 0 7,487 0 0 7,487 7,487 14,974 0 0 147,260
Transportation - From Denver to Nogale 40,043 26,082 0 4,508 0 0 4,508 4,508 9,016 0 0 88,665
Replacement Capital - 25% of Pre. Prod 0 0 0 0 0 0 0 454,250 0 0 0 454,250
Mine Equipment Spare Parts 227,510 0 0 0 0 0 0 0 0 0 0 227,510
Subtotal Mining Equipment 2,587,559 1,199,801 0 217,695 0 0 200,095 654,345 400,190 0 0 5,259,685
Mine Development
Mine Dewatering & Sediment Control 43,257 5,069 6,685 19,153 10,790 11,407 41,280 46,556 1,900 42,635 4,499 233,231
Powder Magazine 18,000 0 0 0 0 0 0 0 0 0 0 18,000
Haul Road Construction 125,000 0 10,000 0 0 0 0 55,000 60,000 0 0 250,000
Mine Development Contingency @ 15% 27,939 760 2,503 2,873 1,619 1,711 6,192 15,233 9,285 6,395 675 75,185
Subtotal Mine Development 214,196 5,829 19,188 22,026 12,409 13,118 47,472 116,789 71,185 49,030 5,174 576,416
TABLE 4-5
Queenstake Resources Ltd.
Magistral Project
Mine Operating Costs
Units Pre-Prod. Q1Y1 Q2Y1 Q3Y1 Q4Y1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total
Ore - Mined tonnes 86,000 206,000 208,000 256,000 253,000 1,021,000 1,009,000 1,005,000 1,007,000 877,000 228,000 6,156,000
Waste Tonnes tonnes 383,000 1,148,000 1,629,000 1,691,000 1,612,000 4,803,000 6,277,000 6,211,000 6,534,000 3,892,000 286,000 34,466,000
Total Tonnes tonnes 469,000 1,354,000 1,837,000 1,947,000 1,865,000 5,824,000 7,286,000 7,216,000 7,541,000 4,769,000 514,000 40,622,000
5.1.1 Introduction
The Magistral project is distinguished by three significant ore deposits that occur in the
Sierra Madre Occidental mountain range of northwestern Mexico. The three deposits are
referred to as San Rafael, Samaniego and Sagrado Corazon-Lupita. The Sagrado
Corazon-Lupita deposit will be developed as two distinct pits in close proximity.
Indications are that Sagrado Corazon and Lupita share common geologic and
metallurgical characteristics, so results of testwork have been combined into a single
metallurgical category for the purposes of this study. A relatively small quantity of
previously processed mill tailings, referred to as the Samaniego Tailings, supplements the
in-situ ore reserves. Table 5-1 summarizes the contribution of each of the resources
relative to the overall reserve.
Table 5-1
Reserve Summary
Reserve Tonnes Au Grade % of Total % of % of
(g/tonne) Reserve, Contained Recoverable
Mass Basis Au Au
San Rafael 1,284,000 2.25 20.9% 25.2% 26.3%
Samaniego 3,127,000 1.93 50.8% 52.6% 52.3%
Sagrado 1,579,000 1.38 25.6% 19.0% 18.7%
Corazon -
Lupita
Samaniego 166,000 2.17 2.7% 3.1% 2.7%
Tailings
TOTAL 6,156,000 1.86 100.0% 100.0% 100.0%
Metallurgical testwork for the project has been conducted predominantly at Kappes,
Cassiday & Associates (KCA) in Reno, Nevada and McClelland Laboratorios de Mexico
(MLI) in Hermosillo, Mexico. Testing at MLI was directed by Herb Osborne of H.C.
Osborne and Associates of Commerce City, Colorado. Cyanide soluble copper analyses
of drill hole composites were performed by Chemex Labs Ltd. in Vancouver, Canada.
Work index, crushability, and abrasion index testing was performed by A.R. MacPherson
Consultants Ltd. of Golden, Colorado and by Svedala Industries, Inc. at their Appleton,
Wisconsin facility.
In July of 1996, core from seven San Rafael PQ drill holes was received for testing.
Intervals for the core were generally shallow, with depth from collar ranging from 9 to 39
meters. A series of bulk density determinations were completed on grab samples taken
from the core. The apparent bulk density averaged 2.59 g/cm3, and ranged from
2.25 g/cm3 to 3.09 g/cm3.
The remaining core samples were combined into a single composite for further testing. A
head sample from the composite was subjected to a static acid/base accounting (ABA)
procedure and showed an average net neutralization potential (based on total sulfur
content) of 11.2 kg CaCo3/tonne ore. The overall bulk head fire assay for the composite
averaged 1.72 gpt Au, which compared well with the calculated head of 1.80 gpt Au from
a cyanide bottle roll leach test. The composite was used to generate material for column
leach tests at five different crush sizes. Columns were completed in triplicate at each of
the five crush sizes. Results from the crush size columns are tabulated below.
Table 5-2
Summary of KCA Column Test Results, San Rafael Core*
Crush Calculated Recovery, % Reagent Cons.,
Size, P100 Head, gpt kg/tonne
Au Ag Au Ag NaCN Lime Cement
75 mm 1.62 2.86 69.8 34.7 0.32 4.05 n/a
50 mm 1.58 3.65 68.4 28.7 0.32 4.05 n/a
25 mm 1.70 4.28 76.7 29.4 0.60 4.06 n/a
16 mm 1.66 4.19 73.6 31.1 0.60 1.07 4.0
6.3 mm 1.68 4.02 81.5 40.3 0.78 1.06 4.0
* Results presented are averages of triplicate columns. Individual results are summarized in Table 5-12.
The results suggest that recovery of gold from the ore is relatively insensitive to crush
size at a P100 between 75 mm and 50 mm. Gold recovery increases with decreasing crush
size as the P100 moves from 50 mm to 25 mm, but no recovery enhancement is seen as the
P100 is reduced from 25 mm to 16 mm. Gold recovery makes another significant step
upward to 81.5% at a P100 of 6.3 mm. Consumption of cyanide, lime and cement was
generally low to moderate, and no problems were noted with percolation in the columns.
In November of 1996, core from four Samaniego PQ drill holes was received for testing.
Intervals for the core were generally shallow, with depth from collar ranging from 9 to 25
meters. A series of bulk density determinations were completed on selected core pieces.
The apparent bulk density averaged 2.59 g/cm3, and ranged from 2.45 g/cm3 to 2.73
g/cm3.
The remaining core samples were combined into a single composite for further testing. A
head sample from the composite was subjected to a static acid/base accounting (ABA)
procedure and showed an average net neutralization potential (based on total sulfur
content) of 78.1 kg CaCo3/tonne ore. The overall bulk head fire assay for the composite
averaged 2.73 gpt Au, which compared favorably with the calculated head of 2.96 gpt Au
from a cyanide bottle roll leach test. The composite was used to generate material for
column leach tests at three different crush sizes. Columns were completed in triplicate at
each of the three crush sizes. Results from the crush size columns are presented in
Table 5-3.
Table 5-3
Summary of KCA Column Test Results, Samaniego Core*
Crush Calculated Recovery, % Reagent Cons.,
Size, P100 Head, gpt kg/tonne
Au Ag Au Ag NaCN Lime Cement
25 mm 2.56 3.00 64.5 41.2 1.53 4.06 n/a
16 mm 2.75 3.03 70.1 51.9 1.87 1.06 4.0
6.3 mm 2.86 3.30 79.7 55.7 2.36 1.06 4.0
* Results presented are averages of triplicate columns. Individual results are summarized in Table 5-12.
The relationship between crush size and gold recovery is more regular in the Samaniego
material than what was seen in the San Rafael core. Each step of crushing produced a
progressively higher gold recovery. The ore tested contained significant amounts of
cyanide soluble copper, with column effluents routinely showing copper concentrations
between 500 and 1200 ppm. As a result of the presence of copper, NaCN consumptions
were high. Lime/cement consumption was in line with San Rafael core results and no
percolation problems were observed during the column tests.
Additional bottle roll testing was conducted on Lupita ore that was received in April
1997. Sixteen bags containing reject reverse circulation drill cutting intervals were
combined into six composite samples. Portions of the composites were pulverized to
minus 0.075 mm and bottle roll leached for 72 hours. The six samples showed an
average gold recovery of 96.5% on an average calculated head of 1.61 gpt Au.
The first Sagrado Corazon material for column testing arrived at KCA during November
of 1996. The material was core from one PQ drill hole. The intervals used in testing
ranged from 2 meters to 34 meters from the collar. Bulk density determinations
performed on selected core pieces showed an average value of 2.57 g/cm3, and ranged
from 2.39 g/cm3 to 2.86 g/cm3. The core samples were combined into a single composite
for further testing. A head sample from the composite was subjected to a static acid/base
accounting (ABA) procedure and showed an average net neutralization potential (based
on total sulfur content) of 69.2 kg CaCo3/tonne ore. The overall bulk head fire assay for
the composite averaged 1.76 gpt Au, which was identical to the calculated head from a
cyanide bottle roll leach test. The composite was used to generate material for column
leach tests at three different crush sizes. Columns were completed in duplicate at each of
the three crush sizes. Results from the crush size columns are presented in Table 5-4.
During November and December of 1996, KCA received one PQ core hole from the
Lupita area. The intervals used for testing ranged from 2 meters to 30 meters from the
collar. Bulk density determinations performed on selected core pieces showed an average
value of 2.67 g/cm3, and ranged from 2.21 g/cm3 to 3.11 g/cm3. The core samples were
combined into a single composite for further testing. A head sample from the composite
was subjected to a static acid/base accounting (ABA) procedure and showed an average
net neutralization potential (based on total sulfur content) of 63.4 kg CaCo3/tonne ore.
The overall bulk head fire assay for the composite averaged 0.62 gpt Au. The calculated
head from a cyanide bottle roll leach test on the composite was 0.54 gpt Au. The
composite was used to generate material for column leach tests at three different crush
sizes. Columns were completed in duplicate at each of the three crush sizes. Results
from the crush size columns are presented in Table 5-4.
Table 5-4
Summary of KCA Column Test Results, Sagrado Corazon - Lupita Core*
Area Crush Calculated Recovery, % Reagent Cons.,
Size, P100 Head, gpt kg/tonne
Au Ag Au Ag NaCN Lime Cement
Sagrado 25 mm 1.36 5.4 64.6 21.0 0.35 4.06 n/a
Lupita 25 mm 0.43 2.7 59.3 29.8 0.38 4.06 n/a
Sagrado 16 mm 1.60 4.6 81.0 40.0 0.48 1.06 4.0
Lupita 16 mm 0.45 3.5 65.2 22.0 0.26 1.06 4.0
Sagrado 6.3 mm 1.81 7.2 86.5 32.0 0.65 1.06 4.0
Lupita 6.3 mm 0.49 3.7 73.5 31.4 0.32 1.06 4.0
* Results presented are averages of duplicate columns. Individual results are summarized in Table 5-12.
Like Samaniego, Sagrado Corazon–Lupita ore exhibits a definite crush size/gold recovery
relationship. Gold recovery increases with decreasing particle size. Consumptions of
cyanide, lime and cement were generally low. Some copper was present in the ore, with
Cu concentrations in column effluents ranging from 35 ppm to 200 ppm, but cyanide
consumption remained relatively low. No problems were noted with percolation in the
columns.
The bulk composite was used to evaluate the amenability of treating the tailings via heap
leaching techniques. Two alternatives were examined; heap leaching of agglomerated
tailings and blending the tailings in with in-situ ore as it is loaded onto the heaps. Six
column leach tests were conducted. Three column leach tests were completed on
agglomerated tailings and three column tests were completed on a blend of tailings and
locally sourced barren rock. The weight ratio of barren rock to tailings in the blending
test was approximately 10.4:1. Results of the tests are summarized in Table 5-5.
Table 5-5
Summary of KCA Column Test Results, Samaniego Tailings*
Sample Crush Calculated Recovery, % Reagent Cons.,
Description Size, Head, gpt kg/tonne
P100 Au Ag Au Ag NaCN Lime Cement
* Results presented are averages of triplicate columns. Individual results are summarized in Table 5-12.
The results indicate that the gold contained in the tailings can be effectively leached from
a blended mixture of rock and tailings. The mining schedule for the Samaniego Tailings
developed by PAH has been designed to deliver the tailings to the crusher at a rate that
will allow a 10:1 blending with in-situ ore. Problems with percolation and fines
migration should not be significant if a 10:1 weight blend is maintained. No significant
copper was seen in leach solutions and cyanide consumption will be driven by the in-situ
ore component of the blend.
• Investigate the leaching characteristics of ore from deeper zones of San Rafael
and Samaniego and compare the results to the testwork performed on
shallower zones at KCA,
• Provide additional data on the metallurgical performance of Sagrado Corazon
– Lupita ore, and
• Develop a better understanding of the leaching behavior of cyanide soluble
copper mineralization within the San Rafael and Samaniego deposits.
In order to achieve these goals, bottle roll tests were performed on selected drill core
samples. Results from the bottle program were used to guide the assembly of composite
samples for long-term column leach tests. A total of 50 bottle roll leach tests and three
column leach tests were conducted at MLI. A brief description of the tests is given
below, and the data are summarized in Table 5-12, which appears at the end of this
section.
Six additional bottle roll tests were conducted on core interval samples that contained
high concentrations of cyanide soluble copper. The tests were run at lower NaCN
concentrations for extended periods (five to seven days) to study the effects of the copper
on leaching.
Splits from seventeen of the core intervals that were individually bottle roll tested were
then combined into a composite sample for further testing. Splits of the composite were
bottle roll tested at three different crush sizes, P84=19 mm, P80=15.9 mm, and
P80=6.3 mm to determine the sensitivity of precious metal recovery, recovery rate, and
reagent consumption to feed size. Gold recoveries at the three crush sizes after 96 hours
of leaching were 51.2%, 54.7% and 60.3%, respectively. Based on the results of these
tests, a P80=19 mm was selected as the target crush size for the composite column leach
test.
A direct head assay was not performed on the composite due to the limited quantity of
sample available. However, the calculated head assay from the composite’s 19 mm bottle
roll test compared favorably with the calculated head for the column composite (2.15 gpt
Au in bottle roll vs. 2.05 gpt Au in column). The ore tested in the column was slightly
finer than targeted, with a crush size of P90 = 19 mm. The ore was leached for 252 days,
rinsed with fresh water for 17 days, and achieved an ultimate Au recovery (based on
carbon and tails samples) of 76.1%. Copper levels in column effluents were significant,
peaking at 1585 ppm at day 18 of leaching. Consumption of NaCN was high at
7.95 kg/tonne due to the presence of soluble copper and the extensive leach period.
Bottle roll testing resulted in the selection of a nominal crush size of P80 = 19 mm for
column testing of the core composite. Due to the limited quantity of sample available, a
direct head assay was not performed on the composite. The calculated head assay for the
composite’s 19 mm bottle roll tested was 1.09 gpt Au, compared to a calculated head for
the column composite of 1.03 gpt Au. The ore was column leached for 241 days, fresh
water rinsed for 16 days, and achieved an ultimate Au recovery (based on carbon and tails
assays) of 73.8%. Copper levels peaked at 180 ppm and remained well below 100 ppm
for the majority of the leach cycle. Given the long duration of the test, NaCN
consumption was moderate at 4.12 kg/tonne.
Remaining splits from the 15 core intervals were then combined into a single composite
for further testing. Splits of the composite were bottle roll tested at three different crush
sizes; P93 = 19 mm, P80 = 15.9 mm, and P80 = 6.3 mm. Gold recoveries at the three crush
sizes after 96 hours of leaching were 41.8%, 42.3% and 48.7%, respectively. Based on
these results, a P80 = 19 mm was selected as a target crush size for the composite column
leach test.
A direct head assay was not performed on the composite due to the limited quantity of
sample available. However, the calculated head assay from the composite’s 19 mm bottle
roll test (1.46 gpt Au) compared well with the calculated head for the column composite
(1.57 gpt). The ore tested in the column was slightly finer than targeted, with a crush size
of P90 = 19 mm. The ore was leached for 273 days, subjected to hydrogen perioxide
neutralization/recirculation rinse for 52 days, and achieved an ultimate Au recovery
(based on carbon and tails samples) of 72.6%. Copper levels in column effluents during
leaching ranged from 30 ppm to 875 ppm. Given the long duration of the test,
consumption of NaCN was moderate at 4.97 kg/tonne.
Table 5-6
Summary of Work Index, Crushability & Abrasion Index Testing
Sample Test Work Index Crushability Abrasion Liner/Screen
Description Facility (kWh/tonne) Index Wear
San Rafael Core MacPherson 6.91 easy 0.0889 low
Samaniego Core MacPherson n/a n/a 0.1398 normal
Lupita Core MacPherson n/a n/a 0.2008 normal
Sagrado Core MacPherson n/a n/a 0.319 normal
San Rafael Svedala 9.33 moderately 0.6269 high
Outcrop #1 easy
San Rafael Svedala 7.58 easy 0.3426 normal
Outcrop #2
San Rafael Svedala 6.35 easy 0.1351 normal
Outcrop #3
San Rafael Svedala 12.04 moderately 0.6622 extremely high
Outcrop #4 difficult
Samaniego Svedala 9.80 moderately 1.0432 extremely high
Outcrop easy
Sagrado Outcrop Svedala 12.55 moderately 0.9674 extremely high
difficult
The samples tested varied greatly in the range of values for the work index and the
abrasion index. From a design standpoint, the crushing circuit has been sized to
accommodate material that will be moderately difficult to crush. Operating costs
associated with wear of crusher liners and screen decks have been based predominately
on the abrasion indices of the core samples and the relative tonnage of each of the
individual deposits.
It should also be noted that the San Rafael, Samaniego, Sagrado Corazon and Lupita
columns at KCA were terminated (at the request of the client) prior to total completion of
leaching. An ultimate lab recovery value for each of the KCA columns was projected by
extrapolating the leach curves out to a leach time of 180 days. Extrapolated ultimate
recoveries increased KCA column recoveries by 1.3% to 4.5%.
Production Au recoveries for each of the deposits were estimated by discounting the
ultimate lab recoveries by 1% to account for operating inefficiencies in the field. The
projected production recoveries are based on the assumption that the samples tested were
representative of the ore bodies in question and that crushing, leaching and recovery
circuits will be constructed and operated in adherence with the design criteria presented in
this study. Production recoveries have been forecast as follows:
Leach time required to reach ultimate recovery in the field has been projected at 240 days.
The first 120 days of leaching will take place while the material exists as an upper-most
lift of freshly placed ore. An additional 120 days of efficient leaching will occur when
the material is exposed to secondary leaching as an underlying lift. It should be noted that
additional recovery beyond the 240 day, two-lift basis may be realized if leach solution
can efficiently contact the ore in the deeper, underlying lifts of the heap. However,
efficient lower lift leaching can be adversely impacted by unpredictable factors such as
solution channeling and depleted free cyanide content, so no recovery beyond 240 days
has been credited in this study. Figure 5.1 shows the recovery rate curves used for the
project.
Figure 5-1
Magistral Project
Recovery vs Time by Ore Type
80.00%
70.00%
60.00%
Percent Gold Recovery
50.00%
40.00%
30.00% Tailings
San Rafael
20.00% Samaniego
Lupita/Sagrado - Corazon
10.00%
Composite
0.00%
0 25 50 75 100 125 150 175 200 225 250
Tables that illustrate the derivation of the production gold recoveries for each of the ores
are presented in the following sections.
Table 5-8
Samaniego Gold Recovery Projections
Approx. Test Column Actual Additional Au Projected Projected
P80 , (mm) Facility Leach Lab Recovery for Ultimate Ultimate
Time Column Extended Lab Field Au
(Days) Au Leach Time Column Recovery
Recovery (Extrapolated) Au
Recovery
19 KCA 124 64.5% 4.5% 69.0%
19 MLI 252 73.8% 0% 73.8%
12.5* Not Tested n/a 73.4% 72.4%
9 KCA 124 70.1% 4.4% 74.5%
5 KCA 124 79.7%
• Crush size utilized for design and costing.
Table 5-9
Sagrado Corazon - Lupita Gold Recovery Projections
Approx. P80 Test Column Actual Additional Au Projected Projected
, (mm) Facility Leach Lab Recovery for Ultimate Ultimate
Time Column Extended Lab Field Au
(Days) Au Leach Time Column Recovery
Recovery (Extrapolated) Au
Recovery
19 (Sagrado) KCA 100 64.6% 2.1% 66.7%
19 (Lupita) KCA 107 59.3% 3.1% 62.4%
19 (Sagrado) MLI 273 72.6% 0% 72.6%
12.5* Not Tested n/a 72.7% 71.7%
9 (Sagrado) KCA 100 81.0% 1.9% 82.9%
9 (Lupita) KCA 107 65.2% 4.2% 69.4%
5 (Sagrado) KCA 100 86.5%
5 (Lupita) KCA 107 73.5%
* Crush size utilized for design and costing.
Table 5-10
Samaniego Tailings Gold Recovery Projections
Approx. Test Column Actual Additional Au Projected Projected
P80 , (mm) Facility Leach Lab Recovery for Ultimate Ultimate
Time Column Extended Lab Field Au
(Days) Au Leach Time Column Recovery
Recovery (Extrapolated) Au
Recovery
9 KCA 41 64.1% 0% 64.1% 63.1%
12.5* Not Tested n/a 64.1% 63.1%
* Crush size of ore which will be blended with tailings @ 10:1 weight ratio utilized for design.
5.1.6.1 Cyanide
Two approaches were considered for estimating cyanide consumption for the Magistral
ore deposits; consumption based on column data and consumption based on the cyanide
soluble copper model generated by PAH. The values selected for this study are as
follows:
• San Rafael: 0.86 kg/tonne ore (based on copper model)
• Samaniego: 0.64 kg/tonne ore (based on copper model)
• Sagrado Corazon – Lupita: 0.18 kg/tonne ore (based on column results)
• Samaniego Tailings: 0.15 kg/tonne ore (based on column results)
Column data are generally the preferred means of deriving NaCN consumption for an ore.
However, estimating cyanide consumptions from the San Rafael and Samaniego column
testwork is potentially erroneous because two of the samples tested contained anomalous
proportions of material with high concentrations of cyanide soluble copper. It should be
remembered that at the time when core was selected for column testing, geologic
modeling was in its infancy and copper modeling had yet to be considered. In fact, it was
the erratic occurrence of copper in the columns that initiated the cyanide soluble copper
test program.
With the retrospective benefit of the complete geologic and copper models, it can be seen
that the Samaniego core tested at KCA and the San Rafael core tested at MLI both
contained inordinately high weightings of material from high copper zones. Similarly,
the San Rafael core tested at KCA was abnormally low with respect to cyanide soluble
copper content. Since NaCN consumptions for these columns were skewed, the decision
was made to base San Rafael and Samaniego consumptions on the PAH copper models.
Cyanide consumptions for San Rafael and Samaniego were therefore derived from the
empirical equation:
The occurrence of cyanide soluble copper in the Sagrado Corazon – Lupita ore body is
not well defined at this point in time. Based on the information available, consumption of
NaCN for this deposit was interpolated from the results of column tests performed at
KCA. KCA’s experience with mostly clean, non-reactive ores shows that cyanide
consumption in production heaps is usually 25 to 50% of laboratory column test
consumption. Table 5-11 illustrates the derivation of a field NaCN consumption of 0.18
kg/tonne for the Sagrado Corazon – Lupita deposit. The NaCN consumption realized in
production may vary from this value depending on the quantity of cyanide soluble copper
that is encountered.
Table 5-11
Sagrado Corazon – Lupita NaCN Consumption
Approx. P80 , (mm) Test Lab Column Projected Field
Facility NaCN NaCN
Consumption Consumption
(kg/tonne) (kg/tonne)
19 (Sagrado) KCA 0.35 0.18
19 (Lupita) KCA 0.38 0.11
12.5* Not Tested 0.18
9 (Sagrado) KCA 0.48 0.24
9 (Lupita) KCA 0.27 0.14
The Samaniego Tailings/barren rock blend that was column tested at KCA showed
relatively low NaCN consumption at 0.15 kg/tonne ore. Since blending will result in the
feed to the heap being no more than 10% by weight tailings, they will have little impact
on the overall consumption of NaCN in the heap. For the purposes of costing, a
conservative value of 0.15 kg/tonne has been used in this study.
5.1.6.2 Lime
Hydrated lime consumptions in production heaps should be similar to those observed in
laboratory column tests. Based on the column test results summarized in Table 5-12,
lime consumptions are projected as follows:
TABLE 5-12
Summary of Magistral Project Metallurgical Testwork
San Rafael Bottle Roll KCA 1995 0.5 -0.075 4.73 10.9 n/a 95.6 73.4 0.11 3.6 n/a 1
San Rafael Bottle Roll KCA 1995 0.5 -0.075 2.42 4.3 n/a 93.4 44.2 0.31 4.0 n/a 1
San Rafael Bottle Roll KCA 1995 0.5 -0.075 2.29 4.8 n/a 92.1 56.3 0.80 4.0 n/a 1
Samaniego Bottle Roll KCA 1995 0.5 -0.075 1.38 4.7 n/a 90.6 53.2 4.94 1.6 n/a 2
Samaniego Bottle Roll KCA 1995 0.5 -0.075 2.64 5.0 n/a 97.3 66.0 1.92 4.0 n/a 1
Samaniego Bottle Roll KCA 1995 0.5 -0.075 0.92 23.9 n/a 92.4 28.9 2.12 3.0 n/a 1
Sagrado Corazon Bottle Roll KCA 1996 0.5 -0.075 1.48 6.5 n/a 96.6 52.3 0.37 2.80 n/a 2
Sagrado Corazon Bottle Roll KCA 1996 0.5 -0.075 2.04 3.3 n/a 98.5 21.2 0.15 2.60 n/a 2
Sagrado Corazon Bottle Roll KCA 1996 0.5 -0.075 2.88 5.1 n/a 98.3 52.9 0.36 2.60 n/a 2
Sagrado Corazon Bottle Roll KCA 1996 0.5 -0.075 1.3 4.4 n/a 97.7 63.6 0.67 2.80 n/a 2
Lupita Bottle Roll KCA 1996 0.5 -0.075 2.12 5.6 n/a 98.6 53.6 0.57 2.60 n/a 2
Lupita Bottle Roll KCA 1996 0.5 -0.075 1.84 8.9 n/a 98.4 70.8 0.87 2.00 n/a 2
Lupita Bottle Roll KCA 1996 0.5 -0.075 1.91 5.9 n/a 94.8 47.5 1.38 2.40 n/a 2
San Rafael Bottle Roll KCA 1997 0.5 - 0.15 1.80 5.5 n/a 97.2 45.5 0.58 5.00 n/a 2
San Rafael Column KCA 1997 200 -75 1.51 2.15 n/a 70.9 44.2 0.31 4.05 n/a 103 P100 = 75 mm, Est. P80 = 50 mm
San Rafael Column KCA 1997 200 -75 1.68 3.29 n/a 70.2 30.1 0.32 4.05 n/a 103 P100 = 75 mm, Est. P80 = 50 mm
San Rafael Column KCA 1997 200 -75 1.68 3.14 n/a 68.4 29.9 0.32 4.05 n/a 103 P100 = 75 mm, Est. P80 = 50 mm
San Rafael Column KCA 1997 200 -50 1.66 2.78 n/a 65.7 35.3 0.29 4.05 n/a 103 P100 = 50 mm, Est. P80 = 35 mm
San Rafael Column KCA 1997 200 -50 1.50 3.92 n/a 68.0 26.0 0.30 4.05 n/a 103 P100 = 50 mm, Est. P80 = 35 mm
San Rafael Column KCA 1997 200 -50 1.58 4.25 n/a 71.5 24.7 0.36 4.05 n/a 103 P100 = 50 mm, Est. P80 = 35 mm
San Rafael Column KCA 1997 80 -25 1.63 4.71 n/a 77.9 25.7 0.63 4.06 n/a 103 P100 = 25 mm, Est. P80 = 19 mm
San Rafael Column KCA 1997 80 -25 1.83 3.69 n/a 74.9 32.2 0.55 4.06 n/a 103 P100 = 25 mm, Est. P80 = 19 mm
San Rafael Column KCA 1997 80 -25 1.63 4.45 n/a 77.3 30.3 0.63 4.06 n/a 103 P100 = 25 mm, Est. P80 = 19 mm
San Rafael Column KCA 1997 75 -16 1.66 4.27 n/a 75.9 29.7 0.60 1.07 4.00 103 P100 = 16 mm, Est. P80 = 9.3 mm
San Rafael Column KCA 1997 75 -16 1.65 3.38 n/a 73.3 40.8 0.62 1.07 4.00 103 P100 = 16 mm, Est. P80 = 9.3 mm
San Rafael Column KCA 1997 75 -16 1.66 4.93 n/a 71.7 22.9 0.58 1.07 4.00 103 P100 = 16 mm, Est. P80 = 9.3 mm
San Rafael Column KCA 1997 80 -6.3 1.73 4.41 n/a 81.5 36.5 0.80 1.06 4.00 103 P100 = 6.3 mm, Est. P80 = 4.5 mm
San Rafael Column KCA 1997 80 -6.3 1.69 3.28 n/a 81.1 48.2 0.81 1.06 4.00 103 P100 = 6.3 mm, Est. P80 = 4.5 mm
San Rafael Column KCA 1997 80 -6.3 1.62 4.38 n/a 81.9 36.1 0.74 1.06 4.00 103 P100 = 6.3 mm, Est. P80 = 4.5 mm
TABLE 5-12
Summary of Magistral Project Metallurgical Testwork
Samaniego Column KCA 1997 80 -25 2.62 3.10 n/a 62.2 38.7 1.29 4.06 n/a 124 P100 = 25 mm, Est. P80 = 16.5 mm
Samaniego Column KCA 1997 80 -25 2.47 3.00 n/a 65.6 43.3 1.51 4.06 n/a 124 P100 = 25 mm, Est. P80 = 16.5 mm
Samaniego Column KCA 1997 80 -25 2.60 2.90 n/a 65.7 41.7 1.79 4.06 n/a 124 P100 = 25 mm, Est. P80 = 16.5 mm
Samaniego Column KCA 1997 80 -16 2.79 3.8 n/a 70.3 42.2 1.94 1.06 4.00 124 P100 = 16 mm, Est. P80 = 10.0 mm
Samaniego Column KCA 1997 80 -16 2.76 2.7 n/a 69.2 51.8 1.82 1.06 4.00 124 P100 = 16 mm, Est. P80 = 10.0 mm
Samaniego Column KCA 1997 80 -16 2.71 2.6 n/a 70.8 61.6 1.86 1.06 4.00 124 P100 = 16 mm, Est. P80 = 10.0 mm
Samaniego Column KCA 1997 80 -6.3 2.88 3.1 n/a 78.2 61.3 2.36 1.06 4.00 124 P100 = 6.3 mm, Est. P80 = 4.8 mm
Samaniego Column KCA 1997 80 -6.3 2.88 3.4 n/a 81.2 55.9 2.43 1.06 4.00 124 P100 = 6.3 mm, Est. P80 = 4.8 mm
Samaniego Column KCA 1997 80 -6.3 2.82 3.4 n/a 79.8 50.0 2.29 1.06 4.00 124 P100 = 6.3 mm, Est. P80 = 4.8 mm
Sagrado Corazon Bottle Roll KCA 1997 0.5 - 0.15 1.76 5.70 n/a 97.2 75.4 0.65 2.00 n/a 2
Sagrado Corazon Column KCA 1997 80 -25 1.29 5.7 n/a 65.1 22.8 0.39 4.06 n/a 100 P100 = 25 mm, Est. P80 = 16 mm
Sagrado Corazon Column KCA 1997 80 -25 1.42 5.2 n/a 64.1 19.1 0.31 4.06 n/a 100 P100 = 25 mm, Est. P80 = 16 mm
Sagrado Corazon Column KCA 1997 80 -16 1.60 4.8 n/a 81.3 35.4 0.46 1.06 4.00 100 P100 = 16 mm, Est. P80 = 10 mm
Sagrado Corazon Column KCA 1997 80 -16 1.61 4.5 n/a 80.7 44.5 0.49 1.06 4.00 100 P100 = 16 mm, Est. P80 = 10 mm
Sagrado Corazon Column KCA 1997 80 -6.3 1.82 7.8 n/a 85.7 30.7 0.62 1.06 4.00 100 P100 = 6.3 mm, Est. P80 = 4.8 mm
Sagrado Corazon Column KCA 1997 80 -6.3 1.8 6.6 n/a 87.2 33.3 0.68 1.06 4.00 100 P100 = 6.3 mm, Est. P80 = 4.8 mm
Lupita Bottle Roll KCA 1997 0.5 - 0.15 0.54 3.3 n/a 87.0 63.6 n/a n/a n/a 2
Lupita Column KCA 1997 80 -25 0.44 2.9 n/a 59.1 27.6 0.35 4.06 n/a 107 P100 = 25 mm, Est. P80 = 16.5 mm
Lupita Column KCA 1997 80 -25 0.42 2.5 n/a 59.5 32.0 0.41 4.06 n/a 107 P100 = 25 mm, Est. P80 = 16.5 mm
Lupita Column KCA 1997 80 -16 0.45 3.7 n/a 64.4 18.9 0.26 1.06 4.00 107 P100 = 16 mm, Est. P80 = 11.5 mm
Lupita Column KCA 1997 80 -16 0.44 3.2 n/a 65.9 25 0.27 1.06 4.00 107 P100 = 16 mm, Est. P80 = 11.5 mm
Lupita Column KCA 1997 80 -6.3 0.47 3.4 n/a 74.5 35.3 0.32 1.06 4.00 107 P100 = 6.3 mm, Est. P80 = 4.5 mm
Lupita Column KCA 1997 80 -6.3 0.51 4.0 n/a 72.5 27.5 0.32 1.06 4.00 107 P100 = 6.3 mm, Est. P80 = 4.5 mm
Lupita Bottle Roll KCA 1997 0.5 -0.075 1.23 4.5 n/a 95.9 42.0 0.32 2.00 n/a 3
Lupita Bottle Roll KCA 1997 0.5 -0.075 1.14 44.2 n/a 95.6 88.0 1.03 4.00 n/a 3
Lupita Bottle Roll KCA 1997 0.5 -0.075 2.86 7.1 n/a 98.3 54.0 1.13 1.00 n/a 3
Lupita Bottle Roll KCA 1997 0.5 -0.075 1.68 4.1 n/a 97.0 54.0 1.13 1.00 n/a 3
Lupita Bottle Roll KCA 1997 0.5 -0.075 1.65 9 n/a 97.0 48.0 1.95 1.00 n/a 3
Lupita Bottle Roll KCA 1997 0.5 -0.075 1.08 2.5 n/a 95.4 64.0 1.04 2.00 n/a 3
TABLE 5-12
Summary of Magistral Project Metallurgical Testwork
as-
Samaniego Tailings Column, Tailings Only KCA 1997 40 received 2.29 6.5 n/a 64.6 66.1 0.34 0.08 20.0 41 Agglomerated w/ cement to enhance percolation
as-
Samaniego Tailings Column, Tailings Only KCA 1997 40 received 2.16 5.7 n/a 66.7 82.5 0.31 0.08 20.0 41 Agglomerated w/ cement to enhance percolation
as-
Samaniego Tailings Column, Tailings Only KCA 1997 40 received 2.34 10.1 n/a 65.0 46.5 0.34 0.08 20.0 41 Agglomerated w/ cement to enhance percolation
Column, Tailings +
Samaniego Tailings Barren Rock KCA 1997 80 -16 0.23 1.9 n/a 60.8 31.6 0.14 2.06 n/a 41 Tailings blended w/ barren rock @ 1:10.4 wt. ratio
Column, Tailings +
Samaniego Tailings Barren Rock KCA 1997 80 -16 0.23 3.7 n/a 69.6 16.2 0.14 2.06 n/a 41 Tailings blended w/ barren rock @ 1:10.4 wt. ratio
Column, Tailings +
Samaniego Tailings Barren Rock KCA 1997 80 -16 0.21 2.3 n/a 61.9 21.7 0.16 2.06 n/a 41 Tailings blended w/ barren rock @ 1:10.4 wt. ratio
San Rafael Bottle Roll MLI 1999 1.0 -1.7 6.12 <4.4 0.80 82.3 n/a 0.81 1.6 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 7.58 15.7 0.05 75.8 23.7 0.96 1.5 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 4.27 3.0 1.05 26.4 0.0 5.06 1.0 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 0.62 6.4 1.72 29.0 6.4 4.77 1.0 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 0.53 <3.5 0.95 32.3 n/a 5.16 0.8 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 0.37 <3.6 0.20 62.1 n/a 2.17 1.0 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 0.32 9.1 1.08 21.3 1.2 5.19 0.9 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 0.38 <3.2 0.04 78.8 n/a 0.91 1.1 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 2.41 <5.4 0.07 84.6 n/a 1.19 2.0 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 2.12 10.3 0.59 45.7 31.9 3.16 1.1 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 2.94 11.4 2.28 40.1 3.2 4.19 0.9 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 6.42 13.4 2.01 62.0 10.7 3.96 1.0 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 0.25 10.0 0.18 63.5 9.7 1.89 1.1 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 1.53 <4.3 0.09 84.9 n/a 1.27 1.1 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 0.93 <4.3 0.21 82.9 n/a 1.73 1.2 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 2.86 <4.2 0.06 79.0 n/a 1.42 1.3 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 0.76 n/a n/a 49.0 n/a 4.58 1.1 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.2 -1.7 0.82 <4.2 0.16 53.6 n/a 2.54 0.9 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 0.44 <3.5 0.38 52.3 n/a 3.81 1.0 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.1 -1.7 1.25 <4.6 0.39 58.5 n/a 3.82 0.9 n/a 2 Test on drill hole interval selected by H. Osborne
San Rafael Bottle Roll MLI 1999 1.0 -1.7 2.61 n/a 0.80 22.6 n/a 9.74 0.8 n/a 7 Extended leach at low cyanide concentration
San Rafael Bottle Roll MLI 1999 1.0 -1.7 0.70 n/a 1.85 48.6 n/a 9.87 0.9 n/a 7 Extended leach at low cyanide concentration
San Rafael Bottle Roll MLI 1999 1.0 -1.7 2.43 n/a 0.54 66.3 n/a 6.12 0.7 n/a 5 Extended leach at low cyanide concentration
San Rafael Bottle Roll MLI 1999 1.0 -1.7 2.69 n/a 2.38 50.9 n/a 8.11 0.8 n/a 6 Extended leach at low cyanide concentration
San Rafael Bottle Roll MLI 1999 1.0 -1.7 0.80 n/a 0.51 56.3 n/a 6.55 0.8 n/a 5 Extended leach at low cyanide concentration
San Rafael Bottle Roll MLI 1999 1.0 -1.7 0.80 n/a 0.23 60.0 n/a 3.34 0.9 n/a 5 Extended leach at low cyanide concentration
San Rafael Bottle Roll MLI 1999 2.0 -19 2.15 4.5 0.50 51.2 17.8 2.96 0.8 n/a 4 Composite sample at coarse crush
San Rafael Bottle Roll MLI 1999 2.0 -15.9 2.47 7.7 0.60 54.7 9.3 3.88 0.8 n/a 4 Composite sample at medium crush
San Rafael Bottle Roll MLI 1999 2.0 -6.3 2.37 7.7 0.58 60.3 9.1 4.36 0.8 n/a 4 Composite sample at fine crush
San Rafael Column MLI 1999 49.5 -19 2.05 6.1 0.56 76.1 37.8 7.95 n/a 2.0 252 Composite sample, P90 = 19 mm
TABLE 5-12
Summary of Magistral Project Metallurgical Testwork
Sagrado Corazon Bottle Roll MLI 1999 1.9 -19 1.46 10.20 0.26 41.8 32.4 1.79 0.9 n/a 4 Composite sample at coarse crush
Sagrado Corazon Bottle Roll MLI 1999 2.0 -15.9 1.49 9.70 0.16 42.3 27.8 1.50 0.9 n/a 4 Composite sample at medium crush
Sagrado Corazon Bottle Roll MLI 1999 1.9 -6.3 1.54 <6.7 0.14 48.7 n/a 1.79 1 n/a 4 Composite sample at fine crush
Sagrado Corazon Column MLI 1999 73.5 -19 1.57 10.8 0.17 72.6 39.9 4.97 n/a 5.0 273 Composite sample, P90 = 19 mm
Samaniego Bottle Roll MLI 1999 1.8 -19 1.09 <3.5 0.05 68.8 n/a 0.68 1.4 n/a 4 Composite sample at coarse crush
Samaniego Bottle Roll MLI 1999 1.8 -15.9 1.16 <3.5 0.05 65.5 n/a 1.22 1.5 n/a 4 Composite sample at medium crush
Samaniego Bottle Roll MLI 1999 1.9 -6.3 1.23 <3.5 0.05 53.7 n/a 1.19 1.5 n/a 4 Composite sample at fine crush
Samaniego Column MLI 1999 45.1 -19 1.03 <3.0 0.05 73.8 17.2 4.12 n/a 5.0 241 Composite sample, P83 =19 mm
The result of the feasibility study engineering and design effort is a mining and
processing facility that will enable the property to be developed in an expeditious and
environmentally responsible manner. Drawing 5015-109 shows the location of the
mining zones, waste dumps, ore processing facilities, and infrastructure installations.
Drawing 5015-201 presents the ore processing plan. The drawings referred to in this
section are included in reduced format at the end of this volume, and in full size format in
the appendix, Volume III.
An automatic ore sampler will be installed on the final product conveyor to obtain a head
sample for ore grade analysis and metallurgical testing, and the quantity of ore crushed
will be measured by a weightometer installed on the same conveyor.
5.2.1.1 Introduction
Laboratory column testing has demonstrated that acceptable gold recoveries require
crushing the ore prior to leaching. Three stages of crushing will be used to produce a
final crushed product that is 80 percent passing 12.5 mm. Consideration was given to
processing San Rafael ore through a two-stage crushing circuit during the first 16 months
of operation since testwork indicated that satisfactory recoveries for this ore could be
realized with a product P80 = 25 mm. However, an analysis that compared revenues and
operating costs for two-stage and three-stage crushing scenarios showed a slight
economic advantage for a three stage circuit for San Rafael ore. Since a three-stage
crushing circuit would ultimately be required for ores from Samaniego and Sagrado
Corazon – Lupita, and a suitable used three-stage crushing circuit was located near
Hermosillo, it was decided to utilize a three-stage circuit from the out-set.
The crushing plant is design to produce an average of 3,226 tonnes per day in two eight
hour shifts. It will crush 296 tonnes per hour, and will produce the desired daily tonnage
in approximately 11 operating hours. This crushing rate allows five hours each day for
startup, shutdown, interruptions in the ore haul and short shutdowns for minor
maintenance. Scheduled maintenance can be done on the off shift and on the day off.
The desired annual tonnage of one million tonnes will be attained by operating six days
per week.
The secondary crushing stage will reduce the ore to approximately 25 mm. The
Hydrocone will have extra coarse liners and will operate at a closed side setting of 19
mm. The top deck of the vibrating screen will have a 38 mm screen and the over size
material will be conveyed back to the H-4000 Hydrocone. The bottom deck of the
vibrating screen will have a 12.5 mm screen and the oversize portion will report to a
conveyor that feeds the tertiary crusher. Undersize material passing through the bottom
deck of the screen will be conveyed to the truck load-out bin.
Drawing 5015-300 shows the crushing plant plan view, and sections are shown on
Drawing 5015-301.
The crushed ore will be hauled to the pad by the Cat 773 trucks. They will end dump the
ore over the edge of the eight meter high lift. A dozer will be used to periodically knock
down the resulting berm so that the trucks can continue stacking the heap in an efficient
manner. The stacked ore will be cross ripped prior to being placed under leach. In
addition, old lifts will be ripped prior to placement of a new lift on top.
Leaching will begin at cell 4 and will advance through each cell following as closely as
possible behind the stacking.
The second lift will also be constructed starting at cell 4 and proceeding to cells 3 and 6.
The ramps to access future lifts will be built within the heap sideslopes.
Drawing 5015-111 illustrates the heap stacking sequence through the duration of project
life.
Phase 2 is the pad area to the west of Phase 1, and it will be constructed during the first
year of operation. It will have a lined area of 35,485 square meters. The stacking of
phase 2 will begin in the thirteenth month.
Phase 3 is the pad area to the east of Phase 1. The area of Phase 3 is 72,950 square
meters. It will be constructed and ready to receive ore during the twenty-third month of
production.
The leach pad perimeter berm will be 1.5 meters high with 2H:1V slopes. The internal
berms will be 1.0 meter high with 2H:1V slopes. A road will surround the pad to provide
access for construction and maintenance during operations.
The pad and pond areas are expected to be quite rocky with thin soils, and therefore
difficult free-digging areas. Major excavations are likely to require drill and blast
techniques for much of the work. For this reason, the pad and ponds have been designed
to minimize the required cut and utilize mine waste fill as much as possible.
The foundation of the pad will be prepared by clearing the surface, cutting rough
protruding areas to a relatively smooth finish and filling the steep drainage areas. No
significant cuts are planned. Mine waste rock will be used to fill the main central
drainage of the pad that extends in the north-south direction. The north side of the pad at
the solution collection point will be at an elevation of 435.6 meters. The surface of the
fill will slope up at a one percent grade in the southerly direction. The elevations shown
in Drawing 5015-102 are final elevations after placement of the fill.
The quantity of fill required for building the entire leach pad is estimated to be 51,000
cubic meters. All of this fill will be placed during the phase 1 construction period.
material. However, it is estimated that the available quantity of bedding fill material will
be sufficient to cover only half of the leach pad and pond areas. Therefore, GCL will be
used where bedding fill is not available. The bedding fill or GCL will be placed on the
prepared subgrade and will have a maximum permeability of 1 x 10-6 cm/second.
The primary collection pipes will be strategically placed to receive the solution from the
smaller pipes and transport it to the final collection point at the north end of the leach
pad. The primary collection pipe for each cell will be a perforated 300 mm diameter pipe
and will connect to a non-perforated 300 mm diameter pipe as it exits its respective cell
and will extend to a distribution box at the pad discharge point. The distribution box is
designed to allow solution from each cell to be directed to either the intermediate pond or
the pregnant pond.
Pipes will be used to transport the pregnant and intermediate solutions from the
distribution box channels to the respective ponds. Solution collection pipes will be
installed under the distribution box and movable “plugs” will direct the solutions to the
pipes leading to each pond. The pregnant and intermediate solution collection pipes will
be 300 mm corrugated smooth lined polyethylene installed on a lined bench next to the
collection ditch.
The distribution box will be equipped with 90 degree V-notch weirs for measuring the
approximate flow from each cell. In addition, each pipe will discharge through a flume
into the respective pond. The flume will allow an accurate measurement of total flow to
each pond for metallurgical balance purposes. The V-notch weirs will be used to
proportion the total flow between the cells draining to a respective pond.
If a sudden storm event results in a higher flow rate from the pad than can be
accommodated in the collection pipes, the excess solution will flow into the collection
ditch and then directly to the excess solution pond. The collection ditch will be 1.0 meter
deep with a 1.5 meter wide bottom and 2H:lV side slopes. The ditch will be lined with a
1.5 mm LLDPE geomembrane liner over a geofabric clay liner.
The ponds are designed to have approximately 214,000 cubic meters of usable volume
and will have maximum fill levels that are 500 mm below the rims. These levels are
controlled by overflow ditches that connect one pond to the next one. A leak detection
system will be installed in each pond. Calculation of pond volume requirements is
discussed in detail in Section 5.2.8.3, Pond Sizing.
At the start of construction, the pond area of approximately 45,000 square meters will be
cleared of vegetation, and any available topsoil will be salvaged and stockpiled. The
locations selected for the ponds will result in mostly fill and very little cut. The surface
of the ponds will be cut only to the extent that minor drainage features are filled and
surfaces are relatively smooth. Mine waste rock will be used for the fill. The slopes of
the pond dams will be 2H:1V. Approximately 55,000 cubic meters of mine waste rock
will be used for constructing the containment dams.
The excess solution pond will utilize a composite lining system consisting of a low
permeability 300 mm thick bedding fill or a geofabric clay liner (GCL), overlain by a
single 1.5 mm linear low density polyethylene (LLDPE) geomembrane liner.
The excess solution pond leak detection system will be similar to the others but will not
have the geonet or a second geomembrane liner.
meters. The ditch is designed to handle the peak flow from the 100-year, 24-hour, storm
event (332 mm.) It will begin in the vicinity of the southwest corner of the leach pad and
extend past the excess solution pond to a point where the surface water will flow into the
existing natural drainage feature. The ditch will be 3 meters wide at the bottom and 6
meters wide at the crest. It will be 1 meter deep with 1.5H:1V cut slopes and 2H:1V fill
slopes.
A second major ditch with the same dimensions will also be constructed on the east side
of the excess solution pond.
The results of this analysis indicated that the stability factors of safety for the heap leach
pad facility and the ponds all exceed the generally accepted industry standards for leach
pad and pond stability.
No liner interface shear strength testing has been performed for the proposed lining
system. Typical industry values were used in the evaluation. This testing should be
included in the final design work for the project using the anticipated materials of
construction. It should be noted that the facilities design is not considered a high risk
design and that any changes required as the result of subsequent test data will be minor
and easily incorporated in the final design. A copy of the report from The Mines Group is
included in the appendix.
The pregnant and intermediate pond pumps are 30 kW and 75 kW submersible pumps,
respectively. The excess solution pond pump is a 22 kW submersible pump. The barren
solution is pumped with a 75 kW horizontal centrifugal pump from the barren solution
tank. The submersible pond pumps are installed on pump slides in each pond and are
equipped with floating suctions to reduce the amount of fines picked up by the pumps.
The heap solution application pumps are sized for the full heap height. An additional
22 kW pump will be installed at the excess solution pond in Year 3 to feed a turbo
evaporator unit.
Leach solution will be supplied to the heap from the intermediate pond and the barren
solution tank. The HDPE main supply pipes will lay on the lined surface along the east
side of the ponds. They will extend up to the external berm of the leach pad and on to the
heap. Yelomine branch pipes will run from the main HDPE pipes to the sprinkler and
drip piping arrangements.
The solution application system is designed to apply a nominal 128 cubic meters of
solution per hour at the rate of 10 liters per hour per square meter of heap surface. The
area under leach at the nominal flow rate will be 12,800 square meters for each stage of
the leach cycle.
Two heap irrigation systems have been designed to help maintain the water balance.
During the wet season, it will be preferable to use the sprinklers, and during the dry
season, drips will be preferred.
After an area has been adequately leached, the pipes will be dismantled and moved to a
newly stacked area. Yelomine was chosen for the sprinkler and secondary header pipes
for the ease of installation and resistance to deterioration by sunlight.
Drip tubes, when used, will be spaced 1000 mm apart with emitters located every
760 mm along the lines. The drip lines will connect to a 150 mm Yelomine header pipe.
Each emitter will deliver 7.6 liters of solution per hour.
Drawing 5015-208 shows the leach solution and heap irrigation system details.
A regional hydrology study prepared in March of 1998 by the Mexican consulting firm
headed by Ing. Gilberto Celaya Urbieta was utilized as the basis for precipitation and
evaporation projections for the Magistral project. The study prepared by Ing. Celaya
presents climatological data for six different stations: El Palmar, San Juan, Mocorito,
Bacubirito, San Joaquin, and Rosamorada. The station closest to the Magistral project
site is San Juan, which is about 7 km from the site. Unfortunately, there are only seven
years worth of data for San Juan and the data that are available are somewhat incomplete.
The station with the most data available is Mocorito, with 33 years on record. However,
the Mocorito station is located at an elevation of 87 meters, which is well below the site
elevation of 400-500 meters. It was decided not to use the Mocorito data because it may
not reflect the greater precipitation events that will occur in the higher elevations near the
Magistral site. The San Joaquin station was selected as the basis for monthly
precipitation and evaporation data because the data base contains 19 years of monthly
data, the station is located within 19 km of the site, and the station is situated at an
elevation of 200 meters.
The water balance models were generated with the San Joaquin station data presented in
the Celaya hydrology study. The monthly data produced the extreme dry season/dry year
scenarios that were utilized in estimating the maximum make-up water requirements for
the project. The extreme wet season, extreme wet year, and a 100 year, 24 hour storm
event calculated by Ing. Celaya for the Magistral site were incorporated into the sizing of
the pond system. The design parameters are summarized in Table 5-13.
Table 5-13
Precip. and Evap. Design Parameters Based on San Joaquin Station Data*
Average Extreme
Wet Season Dry Season
Total Annual Evap. 1582 mm
Total Annual Precip. 1558 mm
Wet Season Precip. 642 mm 1039 mm 425 mm
Dry Season Precip. 203 mm 519 mm 7 mm
Monthly Precip. 568 mm 0 mm
24 Hr., Recorded Precip. 260 mm
24 Hr., 100 Yr. Storm, Calculated 332 mm
* 24 hour, 100 year storm event was calculated for the Magistral site in the Celaya Regional Hydrology Study.
An important point to note in the tables is that each year begins in July and finishes in
June. The model is based on a “water year” rather than a “calendar year” because a
fundamental concept in the design is that the excess solution pond must be empty at the
beginning of each wet season. If the excess solution pond is empty at the beginning of
the wet season, maximum capacity will be available for storage of surplus solution that is
generated by precipitation during the wet season. Use of a “water year” clearly illustrates
the excess pond at “zero” at the start of a twelve month cycle. This makes it easier to
demonstrate the gains and losses of solution through the next twelve months.
The water balance model uses the input data to calculate the amount of solution that the
heap leach system gains or loses during each calendar month. This value is shown on the
line “Net Precip. Gain(+)/Loss(-)”. If there is a net gain of solution, it reports to the
excess solution pond for storage. In months that require makeup water additions, stored
solution is preferentially drawn from the excess solution pond. Once the excess solution
pond is empty, makeup water is added from the well system. The movement of solution
into and out of the excess solution pond is outlined below the “Excess Solution Pond”
line.
The last two items in the tables are “Makeup Solution Required’ and “Solution to
Treat/Discharge”. The “Makeup Solution Required” is the net amount of fresh water that
is needed from the wells for the leaching circuit. The “Solution to Treat/Discharge” is the
amount of process solution that must be treated and discharged to the environment in
order to maintain the system balance. For Magistral, the “Solution to Treat/Discharge”
line is always “0” for two reasons; (1) the excess pond volume is large enough to
accommodate the accumulated extreme wet year precipitation and, (2) the
evaporation/absorption components of the system can consume the wet season
accumulation completely before the end of the dry season.
TABLE 5-14
Average Year Water Balance Model for Ultimate Leach Pad
San Joaquin Station Data
Assumptions
Lined Pad/Ditch Collection Area (sq. m) 178,100
Lined Pond Collection Area (sq. m) 43,100 Pond evap. equals 60% of pan evap. over 50% pond area
Total Leach Flow to Heap (cu. m/hr) 256 Idle heap evapotranspiration equals 70% of pan evap.
Wet Season Ore Absorption (%) 2.8
Dry Season Ore Absorption (%) 3.8 Maximum evapotranspiration = rainfall over idle area
Allowable Wet Season Accum. in Excess 119,900 Sprinklers used during wet season, emitters used during dry season
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Annual
Precipitation (mm) 250 254 134 38 40 35 29 7 3 4 2 31 827
Pan Evapotranspiration (mm) 248 216 191 146 74 47 40 50 71 102 153 245 1,583
Emitter Evap. (%) 0.0 0.0 0.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 1.5
Sprinkler Evap. (%) 5.0 5.0 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3
Idle Heap Evapotrans. Area (sq. m) 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700
Idle Heap Evapotrans. (mm) 173.6 151.2 133.7 102.2 51.8 32.9 28.0 35.0 49.7 71.4 107.1 171.5
Ore Placed on Pad (tonnes) 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 999,996
Precip. Collected (cu.m) 55,300 56,185 29,641 8,406 8,848 7,742 6,415 1,548 664 885 442 6,857 182,932
Ore Absorption (cu. m) 2,333 2,333 2,333 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 35,500
Emitter Evap. (cu. m) 0 0 0 3,686 3,686 3,686 3,686 3,686 3,686 3,686 3,686 3,686 33,178
Sprinkler Evap. (cu. m) 9,216 9,216 9,216 0 0 0 0 0 0 0 0 0 27,648
Evapotrans. (cu. m) 26,162 22,786 20,149 5,727 6,028 4,958 4,220 1,055 452 603 301 4,672 97,111
Pond Evaporation (cu. m) 3,207 2,793 2,470 1,888 957 608 517 647 918 1,319 1,978 3,168 20,468
Net Precip. Gain(+)/Loss(-) 14,383 19,057 (4,527) (6,062) (4,990) (4,677) (5,175) (7,006) (7,560) (7,890) (8,690) (7,835) (30,972)
TABLE 5-15
Extreme Dry Case Water Balance Model for Ultimate Leach Pad
San Joaquin Station Data
Assumptions
Lined Pad/Ditch Collection Area (sq. m) 178,100
Lined Pond Collection Area (sq. m) 43,100 Pond evap. equals 60% of pan evap. over 50% pond area
Total Leach Flow to Heap (cu. m/hr) 256 Idle heap evapotranspiration equals 70% of pan evap.
Wet Season Ore Absorption (%) 2.8
Dry Season Ore Absorption (%) 3.8 Maximum evapotranspiration = rainfall over idle area
Allowable Wet Season Accum. in Excess 119,900 Sprinklers used during wet season, emitters used during dry season
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Annual
Precipitation (mm) 151 184 90 0 0 0 0 0 0 0 0 0 425
Pan Evapotranspiration (mm) 248 216 191 146 74 47 40 50 71 102 153 245 1,583
Emitter Evap. (%) 0.0 0.0 0.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 1.5
Sprinkler Evap. (%) 5.0 5.0 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3
Idle Heap Evapotrans. Area (sq. m) 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700
Idle Heap Evapotrans. (mm) 173.6 151.2 133.7 102.2 51.8 32.9 28.0 35.0 49.7 71.4 107.1 171.5
Ore Placed on Pad (tonnes) 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 999,996
Net Precip. Gain(+)/Loss(-) (4,110) 3,573 (7,674) (8,741) (7,810) (7,461) (7,370) (7,500) (7,771) (8,172) (8,831) (10,021) (81,888)
Makeup Solution Required 4,110 0 4,101 8,741 7,810 7,461 7,370 7,500 7,771 8,172 8,831 10,021 81,888
Solution to Treat/Discharge 0 0 0 0 0 0 0 0 0 0 0 0 0
TABLE 5-16
Extreme Wet Year Water Balance Model for Ultimate Leach Pad
San Joaquin Station Data
Assumptions
Lined Pad/Ditch Collection Area (sq. m) 178,100
Lined Pond Collection Area (sq. m) 43,100 Pond evap. equals 60% of pan evap. over 50% pond area
Total Leach Flow to Heap (cu. m/hr) 256 Idle heap evapotranspiration equals 70% of pan evap.
Wet Season Ore Absorption (%) 2.8
Dry Season Ore Absorption (%) 3.8 Maximum evapotranspiration = rainfall over idle area
Allowable Wet Season Accum. in Excess 119,900 Sprinklers used through entire year
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Annual
Precipitation (mm) 568 229 243 116 114 215 21 10 0 0 0 44 1,560
Pan Evapotranspiration (mm) 248 216 191 146 74 47 40 50 71 102 153 245 1,583
Emitter Evap. (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Sprinkler Evap. (%) 5.0 5.0 5.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 8.8
Idle Heap Evapotrans. Area (sq. m) 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700 150,700
Idle Heap Evapotrans. (mm) 173.6 151.2 133.7 102.2 51.8 32.9 28.0 35.0 49.7 71.4 107.1 171.5
Ore Placed on Pad (tonnes) 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 83,333 999,996
Precip. Collected (cu.m) 125,642 50,655 53,752 25,659 25,217 47,558 4,645 2,212 0 0 0 9,733 345,072
Ore Absorption (cu. m) 2,333 2,333 2,333 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 35,500
Emitter Evap. (cu. m) 0 0 0 0 0 0 0 0 0 0 0 0 0
Sprinkler Evap. (cu. m) 9,216 9,216 9,216 18,432 18,432 18,432 18,432 18,432 18,432 18,432 18,432 18,432 193,536
Evapotrans. (cu. m) 26,162 22,786 20,149 15,402 7,806 4,958 3,165 1,507 0 0 0 6,631 108,564
Pond Evaporation (cu. m) 3,207 2,793 2,470 1,888 957 608 517 647 918 1,319 1,978 3,168 20,468
Net Precip. Gain(+)/Loss(-) 84,724 13,527 19,584 (13,229) (5,145) 20,394 (20,635) (21,540) (22,517) (22,918) (23,577) (21,665) (12,996)
! Draindown: Under full flow conditions a heap will have a higher moisture
content than when it is fully drained. If solution flow to the heaps is
interrupted, excess solution will drain from the heap over a period of time. An
allowance has been made in the ponds to contain a portion of this solution.
The ponds are sized to contain 48 hours of draindown at a full flow 128 m3/hr
per leach cycle. This totals 12,288 m3. This is a conservative figure because
the project will be equipped with a back-up generator to power the leach
pumps if the primary power source is interrupted, spare parts if the pumps fail,
and spare piping to replace line breaks.
! Minimum Pond Volume: There is a level in any pond below which it is very
difficult to pump. Therefore, the bottom 1.0 meter of the working ponds
(pregnant and intermediate ponds) was not considered when calculating usable
volume.
Using the criteria discussed above, usable pond volume required for the project was
determined. The total useable volume was then divided between the ponds to allow
normal leaching operations and long term accumulation of excess solution during the wet
season. The following table shows the total useable volume required along with the
amounts allocated to each pond.
Table 5-17
Usable Pond Volume Requirements, m3
Pregnant Pond Intermediate Excess Solution Total Useable
Pond Pond Pond Volume
Working Solution 3,100 3,100 6,200
Heap Draindown 2,500 2,500 7,300 12,300
Sudden Storm Precip. 6,300 5,900 60,600 72,800
Wet Season Precip. 119,900 119,900
Collection
Total Required 11,900 11,500 187,800 211,200
Usable Volume
It should be noted that capital costs for the ADR plant are based upon the assumption that
the elution, electrowinning and acid wash sections will be comprised of used equipment
purchased by Queenstake Resources Ltd. from facilities in central Nevada and Sonora,
Mexico. The used equipment varies somewhat from the items described in this section.
However, the used equipment under option has been inspected by both KCA and M.
Gleason and Company (an independent maintenance consulting firm) and deemed
suitable for substitution into the flowsheets and general arrangements described in this
section.
The recovery plant will be an open-air facility with the exception of the
electrowinning/smelting area and the process shift supervisor’s office, which will be
walled and roofed. A small quantity of roofing and siding will also be required to protect
the thermal regeneration equipment from rain. The electrowinning/smelting area will be
secured from the rest of the plant.
the carbon columns will be nominally 1.75 meters in diameter and 2.29 meters high and
designed to contain 1.4 tonnes of activated carbon. The columns will be equipped with
stainless steel distribution plates with risers and bubble caps for solution distribution
throughout the carbon bed.
A magnetic flowmeter with totalizer will measure pregnant solution flow to the
adsorption column. A wire sampler will be installed at the head of the column train to
provide continuous sampling of feed solution.
The carbon adsorption columns will be piped in a “carousel” configuration so that any of
the five columns can function as the lead column and the solution will flow through them
in series without the need for transferring carbon “upstream”. Pregnant solution will flow
continuously through the columns until the carbon held in the lead column achieves a
nominal loading of 3.7 kg of gold per tonne. This is a relatively low design loading for
gold and has been selected to allow for depressed loadings associated with the leaching of
ores that contain significant amounts cyanide soluble copper.
Once the lead column carbon attains the design gold loading, it is removed from the
column for elution. Fresh carbon replaces the loaded carbon, and the valving
arrangement within the circuit is modified so that the former lead column becomes the
last column in the series. This method of carbon movement minimizes carbon movement
within the adsorption process, thereby reducing precious metal losses from carbon fines
generated by carbon transfers.
The barren solution emerging from the final column in the train will discharge onto a
DSM screen to recover floating carbon. A wire sampler will be installed to obtain a
continuous sample of the barren solution. The DSM screen discharges into a 3.7 meter
diameter by 4.1 meter high barren solution tank. The tank has been sized to contain 15
minutes of solution flow.
5.2.9.2 Elution
The elution (also called desorption or stripping) section of the plant contains the
following major components:
• Elution vessel, mild steel pressure vessel, with a capacity of 1.4 tonnes of carbon,
1.08 meters diameter x 4.6 meters high.
• One 1.0 million BTU per hour, diesel-fired hot water boiler.
• Eluant solution storage tank, 2.0 meters in diameter x 2.5 meters tall.
After a 1.4 tonne batch of carbon has been transferred to the elution column from the lead
adsorption column, barren eluant will be pumped from the eluant solution storage tank,
through heat exchangers and introduced to the stripping vessel at 130° C under a pressure
of approximately 350 kPa. A 5.6 kw pump will deliver the barren eluant at a rate of two
bed volumes per hour (5.6 m3/hr). The gold-laden solution emerging from the elution
vessel will travel through heat recovery and cooling heat exchangers and into the
electrowinning cells.
Approximately 12 bed volumes of barren eluant will be required to remove the precious
metals from the carbon. Final eluted carbon loadings will typically be less than 320
grams Au per tonne of carbon. After elution is complete, the carbon in the vessel will be
transferred by recessed impellar pump to the acid wash vessel.
On average, approximately five batches of carbon will be stripped per week. Up to seven
batches per week can be stripped during periods when pregnant solution is carrying
elevated concentrations of gold and/or solubilized copper.
The acid wash process will remove scale and other contaminants that inhibit gold
adsorption onto carbon. Acid washing of every other batch of eluted carbon should be
adequate to maintain carbon activity.
After the carbon has been transferred into the acid wash tank, it will be rinsed with fresh
water to remove entrained caustic and cyanide. The rinse solution will be drained and
circulation of 5% hydrochloric acid from the acid mix tank to the acid wash tank will
begin. Concentrated hydrochloric (30%) will be injected from a barrel into the recycle
stream to achieve and maintain a pH ranging from 1.0 to 2.0. Once acid washing is
complete, the carbon will be rinsed with fresh water to remove residual acid.
Total time required to acid wash a batch of carbon will be three to four hours. After acid
washing, the carbon will be transferred by a recessed impeller to either the thermal
regeneration area or the carbon storage tank.
Carbon that has been eluted and/or acid washed will be pumped across a dewatering
screen to a feed hopper sized to contain a 1.4 tonne batch of carbon. Carbon will feed
from the hopper into a 0.4 meter diameter by 2.9 meter tall vertical kiln at a minimum
rate of 25 dry kg/hr. A voltage will be applied across the carbon bed in the kiln, creating
a current which will heat the carbon to approximately 750° C. The discharge rate from
the kiln will be regulated to ensure that the desired temperature profile is maintained in
the kiln.
Hot carbon will discharge into a quench tank that is partially filled with fresh water. The
quenched carbon will be pumped across a vibrating dewatering screen for fines removal
and discharge into a 2.0 tonne capacity carbon storage tank. The reactivated carbon will
then be ready to re-enter the last column of the adsorption column train.
• Two 1.3 m3 electrolytic cells containing steel wool cathodes and powered by a DC
power supply.
• Tilting crucible-type diesel-fired furnace, 660 kg red brass capacity crucible,
800,000 BTU per hour.
• A hood with exhaust fan for furnace off-gas collection.
Precious metal recovery from the pregnant eluate solution will be achieved by two
electrolytic cells run in parallel. Gold will be deposited onto steel wool cathodes as the
solution travels through the cells. The barren eluant exiting the cells will report to the
eluant storage tank. A magnetic flow meter with totalizer will monitor the flow of
pregnant eluate to the cells. Wire samplers will be installed on the feed and discharge
pipelines to provide continuous samples for metallurgical accounting.
The steel wool cathodes in the electrolytic cells will be removed when they are fully
loaded with precious metals. The loaded cathodes will be mixed with fluxes and direct
smelted in the diesel-fired tilting furnace. Doré poured from the smelt will be cleaned,
sampled, weighed and packaged for shipment to a refiner.
Carbon will be transferred between the various unit operations in the recovery plant by
recessed impeller pumps.
Carbon fines will be removed from the circuit as carbon is pumped across the carbon
fines screen, which is situated in front of the carbon storage tank. The kiln dewatering
screen will also remove carbon fines. The screen underflow solutions that carry the fines
will report to the carbon fines tank. The fine carbon slurry will be pumped from the tank
to a 1.0 meter by 1.0 meter plate filter press with 23 plates. The carbon fines collected by
the press will be placed in large bags and held for eventual treatment.
New carbon will be added to the circuit in order to offset losses from fines. Make-up
carbon will be treated in the attrition tank before it is moved into the circuit. A carbon
“super-sack” which contains 500 kg of virgin carbon will be loaded into the attrition tank.
Fresh water will be added to the tank and the slurry will be gently agitated for several
hours. Once the attrition process is complete, the carbon will be pumped across the
vibrating carbon fines screen and discharge into the carbon storage tank.
• NaCN mix tank, 1.8 meters diameter by 2.3 meters tall, with agitator
• NaCN addition pumps (2), 288 liter/hr capacity
• NaOH mix tank, 0.8 meter diameter by 1.2 meters tall, with agitator
• NaOH addition pump, 30 liter/hr capacity
• Acid addition barrel pump, 0.45 m3/hr capacity
• Anti-scalant metering pumps (3), 880 liter/hr capacity.
It is assumed that sodium cyanide will be delivered to the site in 1,000 kg bulk bags.
Barren process solution will be added to the cyanide mix tank, and the pH adjusted if
necessary, prior to the introduction of the dry NaCN. A jib crane will be used to add the
dry NaCN to the mix tank. An agitator will provide mixing to yield a 20% NaCN
solution.
The cyanide addition pumps will be piped to supply NaCN solution from the mix tank to
several delivery points. NaCN solution will be added into the leach circuit by injection
into the barren solution pipeline and/or the intermediate solution pipeline. Since the
Dry sodium hydroxide from bags will be combined with fresh water in the agitated NaOH
mix tank. The NaOH addition pump will move the liquid caustic from the mix to the
eluant storage tank and the acid wash tank.
The hydrochloric acid will arrive in a concentrated form in plastic barrels. A barrel pump
will be used to transfer the concentrated acid to the acid mix tank. The concentrated acid
will be combined with fresh water in the mix tank to yield a product suitable for
circulation through the carbon held in the acid wash tank.
Anti-scalant will be pumped directly from barrels to delivery points by metering pumps.
The scale inhibitor will be added near the pump intakes at the pregnant solution pond and
the intermediate solution pond. Anti-scalant will also be added to the barren solution
tank.
6.1 Accomodations
All project personnel will live off site in local towns and villages. As a result there will
be no need for the construction and maintenance of site accommodations. An operating
cost allocation has been made for renting housing in a nearby town for the expatriate
General Manager.
6.2 Offices
The general and administrative personnel will utilize a rented office in the town of
Mocorito, which is located approximately 22 kilometers from the project. This facility
will accommodate the accounting, purchasing, human resources, health and safety, and
environmental personnel, as well as the General Manager.
On site office facilities will be provided for the mine management and engineering staff
in two 3.7 meter x 17.1 meter modular office trailers located next to the mine shop
facilities. An on site office will be provided for the General Manager in this office as
well. Process management offices will be located in a single 3.7 meter x 13.4 meter
office trailer located next to the ADR and laboratory facilities. It is expected that these
will be used office trailers purchased in El Paso, Texas. The location of these offices is
indicated on Drawing 5015-103.
In addition to the on site office trailers, an office is provided in the laboratory, another
office in the ADR plant, and an office and training room are provided in the mine shop
building.
parts area. The roofed work area consists of a concrete slab with a roof, adjoining the
building and open on the other three sides. A fenced yard adjacent to the shop/warehouse
will be used to store large items or bulk materials which can withstand exposure to the
elements. Drawing 5015-305 is a general arrangement of the mine shop/warehouse.
Most reagents and chemicals delivered to the project will be for use at the process plant
or at the laboratory. These materials will be delivered directly to these facilities and will
be stored there. A fenced area is provided adjacent to the ADR plant for storage of bulk
reagents such as cyanide, activated carbon and acid. Lime will arrive in bulk trucks and
will be transferred pneumatically directly into the silo at the crushing plant.
The fuel and lubricants supply storage will be located near the truck shop in the outside
fenced area. These will be contained in lined, bermed areas to contain any spills that may
occur.
Drawing 5015-103 shows the location of the shop/warehouse and the bulk reagent storage
area in relation to the other project facilities.
6.4 Power
Power for the project will be obtained from Comision Federal de Electricidad (CFE), the
Mexican power authority. Although there are power lines currently crossing the property,
there is not sufficient capacity in the existing system to handle the added load from the
project. Therefore, it will be necessary to build a new power line from a CFE substation
to the north. In discussions with CFE they recommended routing the new power line
along existing roads south to El Valle and then northeast to the project site, a total of
approximately 23 kilometers. The CFE powerline will terminate at the main project
substation. Site distribution will be at 34.5 kV which will be transformed down to 480
volts at each of the main project load centers as shown on Drawing 5015-502. Power
distribution on site will primarily consist of overhead power lines with some underground
lines in high traffic areas such as around the crushing plant.
Prior to deciding on the use of line power from CFE, a study was completed comparing
the capital and operating costs of supplying the project with line power versus the capital
and operating costs of supplying the project with self-generated power. This study clearly
indicated that the line power option is the least costly to the project.
Table 9-12 in Section 9 shows the connected load and estimated load factors for the
project. A total of approximately 1,300 kW is connected with an estimated operating
load of approximately 1,100 kW. Annually, an estimated 4,380,000 kWhr of power will
be consumed.
In addition to construction of the new powerline from CFE and the internal project power
distribution system, it will be necessary to relocate some of the existing powerlines
feeding some of the local communities immediately east and west of the project.
Drawings 5015-110 and 5015-502 show the relocated powerlines.
6.5 Water
domestic needs. These water requirements are estimated as shown in Table 6-1.
Table 6-1
Raw Water Requirements
Estimated Consumption
Average Annual, m3 Peak Monthly, m3
Leach System Makeup 30,972 12,996
Mine Road Dust Control 72,000 9,540
Crusher Dust Control 17,280 2,730
Non-Potable Domestic Needs 13,680 1,140
TOTAL 133,932 26,406
It will be noted that the peak monthly makeup water requirement for the leach system is
actually based on the Extreme Wet Year water balance model for the month of June. The
reason this model has a higher peak month makeup requirement than the Extreme Dry
Case model is that during the extreme wet year it is necessary to utilize sprinkler
evaporation virtually the entire year to evaporate the excess solution pond inventory. It
was decided to base the makeup water requirement on this figure as there may be times
when sprinklers are being used which will increase evaporation significantly over the drip
irrigation system which will normally be used most of the year.
The total project water supply requirements are based on the figures shown in Table 6-1.
Using a water system availability of 90% results in a maximum supply requirement of
29,520 m3/month, or 41 m3/hr.
The most likely water source for providing the project needs is groundwater in the project
area, developed through construction of one or more wells. Prior to the current feasibility
study, Queenstake had drilled three water exploration holes and completed some limited
air lift testing on two of them which encountered water. During the feasibility study,
another water exploration program was undertaken to provide more confidence that the
project water requirements can be met utilizing wells, and to provide a basis for
estimating the capital and operating costs of the system. A hydrology consultant from
Hermosillo, Ing. Gilberto Celaya R., was contracted to oversee this program. Ing.
Celaya’s report is included in the appendix.
A number of holes were drilled and air lift tested during this second water exploration
program. Air lift testing of a test hole approximately 1.5 kilometers north of the project
leach facilities indicates that, upon completion of a proper well, it will be capable of
supplying the project water needs from this area. The collar elevation of the test hole is
319 meters, and the static water level is 109 m below the ground surface.
A 3.8 kw pump will be used to pump water to the process plant, assay lab, truck
maintenance shop, water truck filling tank and crushing plant. The main line that extends
from the distribution pump at the pond to the water truck filling tank near the mine shop
will be 100 mm HDPE (SDR 26). The tank will be filled at the rate of 26 cubic meters
per hour.
6.6 Communications
A cellular phone system will provide the project with external voice and data
communications. This system will include an intercom system connecting the various on
site offices.
In addition to the on site intercom, both fixed and portable FM radios will be used for
communications between the operators and supervisors of the various production
departments.
The existing road currently also provides access to several of the villages in the vicinity
of the project. Due to safety and security considerations, local residents will not be
permitted to pass through the project site. Therefore, it will be necessary to provide
alternative access for them by building some new roads and upgrading portions of
existing roads to bypass the project.
6.7.2 Transportation
There will be no site accomodations for employees, therefore it will be necessary for all
employees to travel from the surrounding region to the site on a daily basis. The
company will contract bus service for employee transport from the general Mocorito area
to the site.
There will be a number of vehicles on site for use by operating, maintenance, and
management personnel in the performance of their duties. Fifteen pickups will be leased
for this purpose. In addition there will be maintenance and repair trucks operated by
mechanics, electricians, and welders for jobs at locations other than at the mine shop. A
used ambulance will be purchased to provide emergency transport for injured personnel.
6.8 Security
The active project area, including the open pits and the waste dumps, will be completely
enclosed by livestock fencing. The individual pits and waste dumps will be added to the
enclosed area as they are developed during the project life. Security (cyclone) fencing
will enclose the ADR plant, the laboratory and the reagent storage area. The
shop/warehouse, bulk supplies storage area, and the mine office area will also be enclosed
by security fencing. A manned security post is included at the main entrance to the site.
Local access roads have been re-routed to keep local traffic outside the secured project
site.
6.9 Laboratory
A laboratory will be constructed and operated at a location near the ADR plant. This will
need to be completed by the time mine development work begins on the site. The
laboratory will be capable of doing all analyses necessary for the operation of the mine
including sample preparation, particle size distribution analyses, solid sample digestion,
fire assaying, AA spectroscopy, and metallurgical testing, including bottle roll and
column tests. Water samples taken for environmental purposes will be sent out for
analyses.
The laboratory is designed to be built using three 12.2 meter long shipping containers
arranged as shown in Drawing 5015-304. The internal area between the three containers
will have a concrete floor and be roofed over to provide additional room for sample
receiving and handling.
The laboratory has been sized to handle the estimated volume of sample preparation and
fire assay work for solid samples as shown below:
Waste products from the laboratory will be generally compatible with the ore that is
placed on the heaps or solutions handled from the solution ponds and will be disposed of
in these facilities.
chemicals that require disposal will be disposed of within the heap leaching process.
Spills of such materials on site will be given the highest operating priority and will
generally involve the excavation of contaminated soils, neutralization of the affected site,
and disposal and/or neutralization of the affected soils on site or at a licensed facility off
site. The mining equipment on site will be immediately available for use in such
circumstances.
Based upon the work completed to date the conclusions presented in the following
sections concerning the effect of the project on the environment and the actions that will
be taken to mitigate them have been formed.
6.11.4 Cultural/Historical
A detailed archeological survey of the project operating area found no sites of potential
significance.
6.11.5 Socioeconomic
The opportunity for employment, improved wages, an increased tax base, and better
access to services will result from the project. These are all potentially positive impacts
that will require no mitigation.
A total of sixteen families reside in the towns of Magistral and El Ranchito, which are
within the area of project influence. These families will be relocated to new housing,
complete with septic and community water systems, away from the project.
6.11.7 Permitting
The Magistral project has been designed to comply with all Mexican environmental
standards and with World Bank environmental standards. There are no known
environmental factors which would prevent obtaining any of the necessary permits to
allow construction and operation. Queenstake has been diligently assembling the
documentation required to apply for the necessary permits and has met with key
government officials who have indicated that they see no obstacles in the permitting of
the Magistral project. The following sections outline the key permits/agreements required
for the Magistral project.
Mining Titles
Prior to beginning construction, SECOFI (Secretaria de Comercio y Fomento Industrial)
must verify the validity of all mining titles pertaining to the project and have registered
copies of all agreements pertaining to Queenstake’s ownership of these mining titles.
Queenstake will complete this process in June 2000. As part of this process, Queenstake
met with the Director of the Mines Department who confirmed that Queenstake’s titles
are in good standing.
In summary, it is expected that the permits can be obtained in a timely manner to allow
project development to proceed as outlined in the project development schedule.
7.1.1 Schedule
Operations at the Magistral project will be conducted on a year-round basis, with
individual elements of the project working schedules designed for optimum productivity
and cost effectiveness. Mining operations will be conducted 24 hours per day, six days
per week. Crushing and stacking will be scheduled for 16 hours per day, six days per
week. Ore leaching and the gold recovery plant will be operated 24 hours per day, 365
days per year. Holidays will be recognized when possible and operations suspended for
the holiday when practical.
Individual working schedules will be based on a standard 48 hours per week, with the
expectation that an average of 10% overtime hours will be worked.
Only the project general manager is planned to be an expatriate. The remainder of the
salaried and hourly workforce will be recruited locally, and where particular expertise and
experience is required, nationally.
Figure 7 - 1
Queenstake Resources Ltd.
Magistral Project Organization Chart
Year 3
General Manager
Magistral Project
(Expatriate)
Maintenance
Survey Assistant Superintendent
Mine Operations
Expatriate Position Electrician/Inst
Superintendent Maintenance Mechanic (3)
Supervisor Laborer
Salaried Position
Driller Blaster (11)
Mine Operations Loader Operator (6)
Supervisor (4) Haul Truck Operator (15)
Dozer Operator (6)
Grader Operator (2)
Water Truck Operator (3)
Utility Operator (2)
Blasting Crew/ Labor (5)
Mine Maintenance
Superintendent
Electrician
Mine Maintenance Welder
Supervisor (3) Mechanic (18)
Tireman
Lubeman (3)
Laborer (3)
Naturally, since the mine geologist will be the person on the site most familiar with the
geology of the deposit, his assistance will be readily available to exploration geologists in
choosing potential locations for additional exploration and in interpreting exploration
results.
The project geologist will, in addition to his mining and geology responsibilities,
supervise and coordinate the activities of the ore control technicians, who will work a
shift schedule assisting the mine operations supervisors in determining the location and
extent of the ore and waste scheduled for mining.
7.3 Mining
On average, one million tons of ore and over 5.6 million tonnes of waste will be mined
each year, which will essentially exploit the current reserves in 6.2 years. A description
of the engineering and operational aspects and considerations for the project is presented
in Section 4. Approximately three months of mine development work will be required
prior to having the mine ready for production. During this period, 86,000 tonnes of ore
will be mined and stockpiled by project personnel using project mining equipment.
Approximately 383,000 tonnes of waste will also be mined, much of which will be used
for fill in the leach pad and process ponds construction, and also the initial haul roads and
waste dumps will be developed.
At the end of the mine development phase of the project the core mining operation is
expected to be capable of mining at nearly full capacity. However, the crushing system
will not undergo commissioning concurrently with the mine development work, so ore
tonnage will be limited during the crusher start-up. In addition to the training that will be
accomplished during mine development, the first four weeks of ore mining will be at
reduced tonnage relative to the capability of the fleet, providing additional time for
training productivity enhancement.
It is planned that the crusher commissioning will be done primarily while producing leach
pad cover material using ore stockpiled during mine pre-production. The crusher is
planned to operate for four weeks to produce this material. During the first two weeks it
will operate at an average of 50% of capacity, with 75% capacity being maintained for the
next four weeks, followed by 90% of capacity for the next two weeks until 100% is
achieved after a total of eight weeks of crusher operation. Thus, for the first month or so
of mining crushing and stacking, the operation will be producing at about 83% of
capacity.
This start-up plan, along with some early mining considerations, results in a total of
923,000 tonnes of ore being mined in the first operating year, which is about 92% of the
annual ore mining plan. Of this, 206,000 tonnes will be mined in the first operating
quarter, 208,000 in the second quarter, and over 500,000 tonnes (full capacity) in the
second half of the year. The crusher, however, will process 963,000 tonnes, with the
difference being made up from the ore stockpiled during mine development.
Mining will be essentially sequential with respect to the four deposits. Mining will begin
in the San Rafael deposit. In the 3rd quarter of Year 1 ore will be developed and begin to
be mined from the Samaniego deposit. Interspersed with ore production from the
Samaniego deposit will be 166,000 tonnes of existing mill tailings which will be mixed
with and treated along with the freshly mined ore. Ore production from both pits will
continue through Year 2, during which mining from San Rafael will be completed. In
Year 3 all ore will come from the Samaniego pit, and in Year 4 ore from Samaniego will
be supplemented with ore developed at the Sagrado Corazon pit, which will be mined out
in that year. In Year 5 all ore will once again come from the Samaniego deposit. In Year
6 the ore from the Samaniego mine will be depleted, as the Lupita deposit is developed,
leaving the Lupita deposit as the sole source of ore for the remainder of the project life.
In Year 6, however, mining will cease for a period of approximately seven and one-half
weeks as the transition from the Samaniego ore to the Lupita ore is made. This will be
necessary because the Lupita deposit sits in a drainage where, if the mine were to be
developed below the drainage surface, it would flood during the wet season, requiring a
diversion and mine dewatering effort that would negatively affect the economics of the
deposit. In order to avoid these costs, the Lupita pit will be developed and mined in the
early part of Year 6 to the point where runoff will flow around the pit. During this
period, ore will be mined from the Samaniego deposit until it is exhauasted. After that,
and following the end of the wet season, mining will resume at the Lupita pit for the
remainder of Year 6 and be completed early in Year 7, before the onset of the next wet
season.
Mining will be done by Magistral personnel using equipment purchased and owned by
the project. Mining operations will be directed by the mining manager, who will be
assisted by a geologist, a mining engineer, a supervisor on each shift, and a blasting
supervisor. Mine equipment maintenance will be directed by the mine maintenance
superintendent, assisted by three maintenance supervisors.
7.3.1 Engineering
The mine engineering department will be responsible for short and long term mine
planning and engineering. Among the daily activities of the department will be surveying
and recording mine advances, coordination of mine plans with grade control, design of
blasts, comparison of actual mining results to plan, modification of plans as required
(consistent with short and long term mining goals), development of alternative procedures
to improve mining operations, and preparation of daily mining data and statistics.
Longer range activities will include the reconciliation of actual results into long range
planning, development of improved resource models, annual reserve estimations and
updates, and preparation of annual operating and capital budgets.
Using the blasting pattern design developed by the mining engineer, the holes will be
loaded with ANFO, an ammonium nitrate-fuel oil mixture, and detonated, using
anticipated powder factors of 0.23 kg per tonne blasted for ore and 0.19 kg per tonne
blasted for waste. If the holes are wet a premixed emulsion will be used instead of
ANFO. Holes will be loaded and blasting done under the supervision of a trained and
licensed blaster.
Following blasting, and based upon the ore reserve model and the bench sample assays,
the rock will be marked to delineate the ore and waste material boundaries by the ore
control technician and the surveyor. It is expected that mining of ore will occur primarily
during the day and swing shifts and will be avoided on night shift, where waste
production will be the focus.
Blasting will occur at least every other day, with the potential for it to be scheduled on a
daily basis. Blasting will be scheduled to occur at a regular time each day, usually during
a regular mine break such as between shifts or at lunch break.
Prior to blasting, people and equipment in the immediate pit area will be evacuated and
the area will be secured. Depending upon the area of the mine to be blasted, other
potentially affected areas outside of the pit boundaries may also be evacuated and
secured. All project employees will be trained in blast procedures and the proper action
to be taken, depending upon their job duties, while blasting is in progress.
Initially, 5 haul trucks and one loader will be scheduled to operate, with an additional
loader held as a spare to provide for breakdowns and/or scheduled maintenance. Given
average haul cycles, this should set truck haulage as the tonnage controlling factor for
mining. At the height of mining operations in Year 5 a total of 9 trucks and 2 loaders will
be in operation.
At the waste dumps, the trucks will dump their loads over the working edge of the dumps
and return to the loader. Periodically, a dozer will be used at the dumps to doze loose ore
and maintain surface grade.
Ore hauled to the crusher area will be either dumped directly into the crusher feed hopper
or deposited in the ore stockpiles at the crusher pad site. When required, ore from the
stockpiles will be fed to the crusher using a front end loader. The stockpile capability
will provide the flexibility for blending ores for grade control and ore type.
It will be the responsibility of the mine shift supervisor to inspect the operating areas of
the mine prior to the start of daily operations and note any potential safety hazards such as
signs of slope failure in the pit, slippery operating surfaces, or cracking and settling at the
dumps. He will notify the operators of any such potential hazards and take steps to
eliminate any hazard that might be posed.
Routine lubrication and maintenance will be done in the shop area. Equipment refueling
will normally be done in the mine, using a fuel/lube truck. It will also be possible to
refuel equipment at the fuel storage location near the maintenance shops.
Each operator will be trained in proper operating procedures and to recognize unsafe
operating practices and warning signals. Prior to the start of each shift, each equipment
operator will be responsible for completing a safety and operational inspection of the
equipment he is assigned to operate. Each major piece of equipment will be equipped
with a fire suppression system that can be activated from the cab or from the ground.
Equipment will be selected and maintained to provide a safe and clean operating
environment for the operator, including consideration of exposure to noise.
7.3.6 Maintenance
Maintenance of mining, mine support, and other pieces of mobile equipment on the
property will be done by the project personnel at the mine shop and warehouse.
The mine maintenance department will employ a varying number of people, depending
upon the amount of equipment required to be operated and maintained. In general the
staffing will consist of a maintenance superintendent, three maintenance supervisors, an
electrician, a welder, tire maintenance personnel, field fueling and lubrication mechanics,
heavy equipment mechanics, light equipment mechanics, and laborers. At its peak the
department will employ 30 hourly personnel.
7.4 Processing
On average one million tonnes of ore per year will be crushed, stacked, and leached. The
resultant pregnant leach solutions will be processed in a carbon adsorption-desorption
recovery plant where gold and minor amounts of silver will be recovered. The dore'
metal produced will be exported for final refining and sale. A detailed description of the
process engineering considerations and equipment for the project is presented in
Section 5, Metallurgy and Processing.
Initially, ore will be stacked on the pad for four weeks until sufficient ore is stacked to
allow the initiation of leaching. Following two weeks where stacking and leaching are
done concurrently, commissioning and operation of the gold recovery plant will begin,
resulting in the first gold production two weeks after that. From that point forward, ore
mining, stacking, leaching, and gold recovery will operate continuously (except for the
Lupita mine development delay discussed earlier) until the ore reserve is depleted, some
6.2 years later.
This start-up plan, along with some early mining considerations, results in a total of
923,000 tonnes of ore being mined in the first operating year, which is about 92% of the
average ore mining plan. Of this, 206,000 tonnes will be mined in the first operating
quarter, 208,000 in the second quarter, and over 500,000 tonnes (full capacity) in the
second half of the year. The crusher, however, will process 963,000 tonnes, with the
difference being made up from the ore stockpile during mine development.
Following the stacking of the last truckload of ore, mining and stacking will be shutdown.
From that point the stacked ore will be leached until the final economic recovery has been
reached, after which heap neutralization and reclamation activities will commence.
Testwork has indicated that 240 days of leaching is required to reach the final gold
recovery projections. This will be accomplished through 120 days of direct leaching
followed by 120 days of indirect leaching of the ore after it has been covered by another
lift. This study has projected that the final truckload of ore will be leached for that period
of time after stacking has ceased, with leach solution being used on the heap in those
areas that produce the best pregnant solution grades. In fact, it is unlikely that profitable
amounts of gold will be recovered towards the end of the 240 day final leach period, but
the gold recovery and operating cost projections have both been based upon the scenario.
Process operations and maintenance will be directed by the process manager with
assistance from the chief chemist, the process maintenance superintendent, four process
shift supervisors, and a maintenance supervisor.
The crushing and stacking system is scheduled to operate six days per week, sixteen
hours per day with two operators required on each shift to operate the system. The area
staffing plan includes two utility operators and a laborer, who, with the use of a utility
loader, will tend to housekeeping and cleanup of the area.
The crushing circuit will be installed early in the project development schedule to allow
for the production of gravel for use in the construction of the leach pad, road building,
and other construction.
It is planned that the crusher commissioning will be done primarily while producing leach
pad cover material using ore stockpiled during mine pre-production. The crusher is
planned to operate for four weeks to produce this material. During the first two weeks it
will operate at an average of 50% of capacity, with 75% capacity being maintained for the
next four weeks, followed by 90% of capacity for the next two weeks until 100% is
achieved after a total of eight weeks of crusher operation. Thus, for the first month or so
of mining operations, the mining and crushing operation will be producing at about 83%
of capacity.
7.4.1.1 Crushing
Ore will be hauled to the stockpile by mine haul trucks and either dumped directly into
the crusher feed hopper or to stockpiles. Stockpiled ore will be fed into the crushing
system using a front end loader. The crushing system is described in detail in Section
5.2.1.
7.4.1.2 Stacking
Ore will be transported to the leach pad using mine department equipment and stacked as
described in Section 7.3.4 above. The details of stacking procedures and sequences are
described in Section 5.2.2.
7.4.1.3 Maintenance
Maintenance of the entire process area, from crushing through the gold recovery plant
will be done by a seven person process maintenance department. This group will consist
of a maintenance superintendent, a maintenance supervisor, and five maintenance people,
including an electrician. The maintenance schedule will be staffed seven days per week
on day shift only.
The intermediate solution will be applied to the freshest ore to produce a high grade
pregnant solution as feed to the gold recovery plant. The barren solution will be used to
complete the leach cycle on ore that has been previously leached with intermediate
solution. While the application of intermediate solution will generally follow the
placement of fresh ore, the application of barren solution onto the heap will be directed to
those areas which produce the best results. In this manner, the efficiency of the heap
leaching cycle and the rate of gold production is maximized.
Solution analyses will define which solution coming from the heap is the pregnant
solution and which is the intermediate solution. Generally, the solution recovered from
leaching the fresh ore will be the highest grade and will be directed to the pregnant
solution pond. The remaining solution, resulting from leaching with barren solution, will
become intermediate solution and will be directed to the intermediate solution pond.
A total of four heap leach operators will be required, one per crew, to cover twenty-four
hour per day operations, seven days per week. It is the heap operator’s function to
operate, inspect, and monitor the heap continuously during his shift, working in
conjunction with the shift process operator. Heap preparation and piping will be done on
a day shift basis by the utility operators and laborer.
The leach solutions, both barren and intermediate, will be pumped to the heap directly
from the barren solution tank or the intermediate solution pond, respectively. The
cyanide content of both solutions will be adjusted by the addition of cyanide solution at or
near the solution pump intakes. It is expected that cyanide strengths in both solutions will
be maintained in the 250 to 500 ppm range. In addition to cyanide, anti-scalant reagent
will also be added to the flow, providing protection against the formation of scale in the
pipelines, emitters, and sprinklers. As a final protective step, filters installed in the main
headers will remove any larger solid particles, such as dirt and carbon.
The leach solutions, after percolating through the heap, will be collected by perforated
pipes in the drainage layer of the heap. A system of distribution boxes and pipelines will
collect and direct the flow to the appropriate process solution pond. Details of the
solution collection system are described in Section 5.2.3.4.
The process maintenance crew will do maintenance of the solution application and
recovery system.
7.4.3.1 Adsorption
Pregnant solution will be pumped from the pregnant solution pond using a submersible
pump to the adsorption circuit. In this circuit, the solution will flow through a series of
five carbon adsorption columns, discharging through a screen to the barren solution tank.
As the solution flows through the columns, in an upflow configuration, the activated
carbon bed will be fluidized and precious metals will be adsorbed from solution onto the
carbon, usually at an adsorption efficiency in excess of 95%.
7.4.3.2 Elution
As the carbon in the adsorption columns reaches its capacity for absorbing precious
metals the carbon will be removed from the circuit and transferred by pumping to the
elution circuit. If necessary, elution may be done up to seven times per week. On
average, however, elution will be needed five times per week. Carbon elution is a batch
process, with approximately 1.4 tonnes of carbon being processed in each batch.
The elution circuit consists of a pressurized elution column, a fuel oil fired boiler, a heat
exchanger system, and two electrowinning cells, all in closed circuit. Elution is
accomplished by circulating hot caustic solution, usually at 130 degrees centigrade and a
pressure of about 350 mPa, through the carbon column in an upflow pattern. This strips
the precious metals from the carbon, over a period of less than twenty four hours, and
produces a concentrated eluate. The eluate is circulated through the electrowinning cells,
in which the precious metals are recovered from solution by electrolysis onto steel wool
cathodes.
A series of heat exchangers are installed in the circuit for heat conservation and for
personnel safety. The first heat exchanger recovers heat from the pregnant eluate exiting
from the column and transfers it to the barren eluant solution. This reduces the
temperature of the pregnant eluate to less than 100 degrees centigrade so that it does not
flash to steam when it is reduced to atmospheric pressure. The second exchanger takes
the barren eluant from the first exchanger and, using the boiler as a heat source, brings the
eluant up to its design temperature prior to entering the elution column. A third
exchanger is installed on the eluate line after the first exchanger and will use process
water to reduce the final eluate temperature to less than boiling, if necessary.
7.4.3.3 Smelting
The smelting operations will normally be conducted once per week, depending upon
production rates. Smelting will be done by an assayer/refiner under close supervision
from the processing manager.
When the steel wool cathodes from electrowinning are loaded with gold they will be
manually removed from the electrowinning cells and prepared for smelting. This
involves the draining of excess solutions from the cathodes, placing them in the smelting
crucible, and adding flux reagents. Fresh wool will be replaced on the cathodes, and the
electrowinning cells will be placed back into service.
In an oil fired tilting furnace, the mixture of cathodes and flux is heated until the metals
have been melted and a fluid slag has formed. At this point, the majority of the slag will
be removed by pouring it off into a graphite powder lined container. Then the remainder
of the contents of the crucible will be poured into conical, graphite powder lined mold,
where the metals will settle to the bottom with the remaining slag concentrating on top of
the metal.
When the mold has cooled, it will be emptied and the slag separated from the doré. The
doré will then be cleaned, sampled, weighed, and stored in a safe until it is shipped.
Periodically the slag will be reprocessed until most of the metals in the slag are recovered.
The remaining slag will then be crushed and taken to the ore heap, where remaining
entrained doré will be subject to leaching for final recovery.
7.4.3.4 Refining
Refining will be done off site. For this study the Handy and Harmon facility in Phoenix,
Arizona has been planned. Once every two weeks, the doré buttons will be transported
under suitable security to the Guamuchil airport then shipped by air from there to
Phoenix. The doré will be picked up there by armored vehicle and taken directly to the
refinery. Prior to shipment, the doré will be stored either in a safe at the project site, or in
the bank at Guamuchil.
Carbon regeneration is done in two steps. First is acid washing, a process in which a
dilute acid solution is circulated through the fouled carbon in an acid wash tank. This
step dissolves the carbonates and other impurities from the carbon. Each batch of carbon
will be acid washed after it has undergone elution twice.
The next step is thermal regeneration. In this process, the carbon is fed to an electric
carbon regeneration kiln, where temperatures of up to 700 degrees centigrade drive the
organics from the activated carbon. As the carbon discharges from the kiln, it is
quenched using process water. Each batch of carbon will be regenerated after three
elutions.
New carbon, as received, needs to be conditioned prior to use to remove fines and
structurally weak particles of carbon. To accomplish this, new carbon will be transferred
to a carbon attrition tank where it will be soaked with water and agitated to liberate the
fine particles.
The fines generated in the above processes will be collected by screening and filtration
and then bagged for disposal.
7.4.3.6 Reagents
Four primary reagents will be used within the process plant, sodium cyanide, acid, caustic
soda, and anti-scalant.
Sodium cyanide will be received dry in 1000 kg bulk bags. In a specially designed
mixing tank containing a measured amount of barren process solution, the cyanide will be
unloaded and agitated until a uniform solution of about 30% by weight is produced.
From this tank, a reagent pumping system will transfer a controlled amount of the
solution to the barren solution tank and to the intermediate solution pump for use in heap
leaching. Cyanide will also be able to be added to the feed to the first adsorption column,
to inhibit copper adsorption, and to the barren eluant solution, when necessary.
Acid will also be received in drums. The acid will be combined with fresh water in the
acid mix tank to produce a solution at a pH of about 2.0, from which it will be circulated
through the carbon in the acid wash tank.
The make-up barren eluant solution will be made from fresh water and dry caustic soda.
The solution will be mixed to create a solution with a pH of greater than 12.4, and then
added as required to the elution system as makeup.
Anti-scalant will be received in drums and used to retard scale formation within the
solution systems. It will be added directly from the drum, using dedicated pumps, to the
barren solution, intermediate solution, pregnant solution, and eluant solution.
These reagents will be stored in their shipment containers, normally in an outside, secured
area, until they are used. All operators will be trained in safe handling procedures, and
material safety data sheets will be available for review. Safety showers and eyewash
stations will be located in appropriate areas.
7.5.1 Water
The water system will be operated and maintained by the process department. Process
water will be required primarily for dust control and process makeup water. The water
will be supplied from a well drilled on the project site and pumped to a fresh water
storage pond for storage and distribution. Potable water for the site will be supplied by a
bottled water supplier.
7.5.2 Power
Project power will be acquired from CFE, the national utility. Emergency back-up power
to the process facilities will be provided by an installed diesel generator.
Power will be distributed throughout the property by overhead and underground lines,
with transformers located at the appropriate sites. This system will be operated and
maintained by the process department, with off-shift inspection provided by the process
shift supervisor.
7.5.3 Laboratory
The laboratory will be operated by a staff of five people, supervised by the chief chemist,
operating on a day shift basis, six days per week. Operations will include sample
preparation, sample digestion, AA analysis, fire assaying, and metallurgical testing.
Maintenance will be done using the process mechanics.
7.6 Administration
7.6.1 Management
Project management will be under the direction of a general manager, who will have site
responsibility and report directly to the corporate office in Denver.
7.6.2 Accounting
A controller will process accounts payable, maintain payroll, administer benefits, control
local accounts, prepare and maintain budgets, and prepare financial reports. The
accounting manger will be assisted by a clerk/secretary.
A total of four security personnel and a security supervisor will be employed at the
project. They will provide around the clock security for the property, including patrols
and control of the entrance gate. These personnel may be armed. A trained medical
technician, most likely a nurse, will provide medical and emergency services.
The closure and reclamation plan proposes the following actions be taken:
• The open pits will remain as permanent features, but will have berms installed
to prevent public access. The San Rafael pit will be backfilled with waste
rock from the other pits.
• The waste rock stockpiles will be constructed at their natural angle of repose,
approximately 1.3 to 1.0 (H:V), and reduced to 2.5 to 1.0 (H:V) slopes at
closure. The horizontal surfaces will be revegetated, and natural revegetation
will proceed on the slopes.
• The ore processing plants and support facilities will be removed and the land
revegetated. Any buildings left in place will be left in a safe condition.
• The heap leach ore will be neutralized, recontoured, and revegetated.
• Process solutions will be evaporated. Residual material will be evaluated for
hazardous content and appropriately treated or removed from the site.
• Exposed leach pad berms will be regraded and exposed liner will be either
removed or buried.
• The process pond retaining structures will be removed to re-establish drainage
patterns, the liners removed and buried, and the area revegetated.
• Concrete pads and foundations will be either removed or buried.
• Roads and other operating surfaces will be reclaimed and revegetated.
Table 8-1
Reclamation Costs
Activity Estimated Cost
$US
Site General and Administrative $305,000
Mine Closure and Reclamation $1,002,000
Neutralize Ore Heap $171,000
Evaporate Process Solutions $26,000
Dismantle Facilities $73,000
Recontour and Reclaim Heap $10,500
Reclaim Roads and Facilities Sites $1,000
Reclaim Process Ponds $9,000
Subtotal $1,597,500
Contingency , 15% $240,000
Total Reclamation and Closure $1,837,500
Attached in the appendix are the cost estimation spreadsheets used to calculate the costs
of heap neutralization, evaporation, and G&A cost.
It is anticipated that the buildings and structures associated with the project will be left
standing at closure and will be adapted for further beneficial use. The processing and
operations support equipment will be dismantled and eventually removed from the site.
The estimated salvage value of the equipment to be removed is $1,047,000, based upon
the original value of the equipment and an estimated percentage of the original value that
can be obtained. It is likely that mining and construction equipment of this sort will have
value in Mexico.
Allocated within the economics of the project is the accrual of money on a per tonne
mined basis for the accomplishment of these reclamation activities. A total of $0.0452
per tonne of material mined will be accrued for these costs, not including IVA tax.
The unit costs and productivity used in the estimation of the reclamation costs are
presented below. These data were obtained from a permitted mining project located in
the desert southwest US.
Table 8-2
Reclamation Unit Costs and Productivity
Activity Unit Productivity/Cost
Slope reduction, ore heap 1,900 m3 per hour
Prepare compacted surfaces for revegetation 0.45 hectare per hour
Prepare loose surfaces for revegetation 2.9 hectares per hour
Apply growth media 1.6 hectares per hour
Collect native seeds 3.5 hours per hectare to be reseeded
Apply seeds 0.4 hectare per hour
The resulting surface, an estimated 249,000 m2, will then be prepared for seeding and
seeded at an estimated cost of $3,500.
Much of the mining and process equipment will retain a value as used equipment and will
be sold for use at other operations or projects. The remaining equipment and materials
will be disposed of by recyclers who will be given the material in exchange for removing
it from the site. That which cannot be disposed of by recyclers will be buried in one of
the waste dumps or in the ore heap.
A total of 55,000 m3 of fill was used to create the ponds and can be dozed away at a rate
of about 1,500 m3 per hour at a cost of $60 per hour.
Removal of the liner should require about five days with a crew of four people and
equipment, a cost of about $5,500. It is anticipated that the liner removed will be buried
in either the ore heap or the mine waste dumps at a cost of about $1,000.
With the liner removed, the area can be prepared for revegetation and seeded for a few
hundred dollars.
The site roads and facilities sites contain the following approximate areas.
Table 8-3
Reclaim Areas – Site Roads and Facilities
Site Area Reclaimed, m2
Haul road, crusher to heap 6,400
Road from mine shop to process area 8,800
Mine shop area 7,000
Crusher area 5,000
Process plant area 5,500
Total 32,700
9.1 Summary
The capital expenditures required for the project are summarized in Table 9-1. It is
necessary to fund capital expenditures through the first quarter of Year 1 to cover the
commissioning time period until the project is generating a positive cashflow. The costs
are based on the design as outlined in this report and are considered to have an accuracy
of +/-15%. The scope of work includes the preparation of costs for all areas of the project
including mining fleet, mining support equipment, mine development, processing, and
infrastructure. Capital cost estimates are based on the purchase of used equipment for the
mining fleet, mining support equipment, transformers, crushers, the stripping and
electrowinning portions of the ADR plant, the mobile support equipment in the
processing areas, the back-up power generator, and on-site office trailers. All other
capital estimates are based on the purchase of new equipment.
PAH provided the cost estimates for the mine equipment and mine development while
KCA estimated the costs for the remainder of the project. Equipment and material
requirements are based on the design information described in previous sections. Details
on capital expenditures for mine equipment and mine development are presented in
PAH’s portion of the feasibility study. For capital estimated by KCA, budgetary quotes
were used for all major equipment items, either from a supplier or from KCA’s files.
Minor equipment item costs are based on recent quotes in KCA’s files for similar
equipment. Costs associated with constructing a power line to the site were based on an
estimate from the regional office of the Comision Federal De Electridad (CFE), the
national power company of Mexico. Geothermal Development Associates (GDA) of
Reno, NV supplied costs for electrics for each area and power distribution for the entire
site. Unit costs for project earthworks, access road construction, and relocation activities
were obtained from contractors in Hermosillo. Unit costs for local items such as concrete
and fencing were obtained from contractors in the Magistral project area.
Pre-production investment capital requirement details are shown in Table 9-4. Additional
capital for leach pad expansions is required in Year 1 and Year 2. Year 1 through Year 7
capital costs are presented sequentially in Tables 9-5 through 9-11, respectively. A major
equipment list is presented in Table 9-12. Tables 9-13 through 9-16 detail capital
requirements for EPCM, owner’s pre-production costs, and initial supply inventory. All
of these tables are located in Section 9.9. All costs are in second quarter 2000 US dollars.
Table 9-1
Capital Costs Summary
Facility Description Pre-Production Year 1 Qtr. 1
Capital Cost, Capital Cost,
US$ US$
Mine Equipment 2,382,000 1,097,000
Mine Development 587,000 5,000
Mine Shop & Warehouse 241,000
Crushing 1,088,000
Phase 1 Leach Pad 824,000
Process Pumps & Solution Application 235,000
Process Ponds 508,000
Process Plant 882,000
Laboratory 252,000
Power System 576,000
Process Water System 87,000
Infrastructure 1,057,000
EPCM 870,000
Owner’s Pre-production Costs 664,000
Total Direct Capital Cost 10,253,000 1,102,000
Contingency 1,123,000 103,000
Total Direct Capital Including Contingency 11,376,000 1,205,000
Operating Supply Inventory 282,000
Total IVA Tax (future credit to Queenstake) 821,000 8,000
Total Indirect Capital Cost 1,103,000 8,000
Total Initial Capital Required 12,479,000 1,213,000
9.2.1 Introduction
Each facility, such as crushing, leach pad, process plant, infrastructure, etc., in the capital
cost table is separated into the following categories where applicable: equipment,
earthworks, concrete, steel, piping, electrical and instrumentation, buildings and other. A
contingency factor is also included for each facility.
Each item in each category includes costs for freight, installation labor and equipment,
taxes, and import duties where applicable, in accordance with KCA’s understanding of
the Mexican tax code. Each of these cost types is briefly discussed in the following
sections.
9.2.1.1 Freight
Freight costs for equipment and supplies are primarily based on material weight and a
unit cost per tonne. Shipping costs are based on a majority of the major equipment items
being transported by overland trucking from the west central United States (Denver) to
the Mexican border (Nogales), then to the Magistral site. Freight costs are based on a
quote from a transport company, Trism Specialized Carriers, which operates on both
sides of the border. The prices quoted include all accessorial charges such as Mexican
fuel surcharge, trailer return charges, and other miscellaneous fees.
The quoted costs of transporting a truckload from Denver to Nogales, and Nogales to
Mocorito were $1,823 per load and $3,035 per load, respectively. An average weight of
15.9 tonnes per load was assumed, yielding a total unit freight cost of $306 per tonne.
Freight costs for local equipment/supplies from within Mexico were estimated through
discussions with Mexican freight companies. It was assumed that the equipment/supplies
would originate in Hermosillo and be transported by truck to the project site. An average
load weight of 20.8 tonnes was used to generate a unit freight rate of $47/tonne.
A special sub-heading of $/Unit has been placed under installation equipment. Unit rates
which appear in this column, such as unit rates for leach pad earthworks, represent total
installed costs that include all labor and equipment.
It is important to note that the 15% IVA tax will be refunded. This issue is discussed in
more detail in Section 11.0, Economics.
9.2.2 Equipment
Costs for all major items of new equipment are based on quotes from vendors or from
projects recently completed by KCA. Minor equipment items are based on supplier
quotes, or are from KCA’s in-house database.
The study has assumed that the following used equipment will be utilized by the project:
• mining fleet and mining support equipment;
• site distribution power transformers;
• primary, secondary, and tertiary crushing circuits, excluding conveyors & screen
deck;
• process mobile support equipment;
• recovery plant stripping circuit;
• recovery plant electrowinning circuit;
• back-up power generator for process solution pumping;
• three mobile trailers that will house mine management and process management.
The cost of used mining equipment and mining support equipment was developed by
PAH on the basis of a letter from D.H. Blattner & Sons Inc. (Blattner) to Queenstake
regarding the sale of used equipment. Capital costs for the used crushing facilities are
based on a price that Queenstake has negotiated with Exploraciones El Dorado, S.A. de
C.V. (El Dorado) for equipment that was previously employed at El Dorado’s La Trinidad
Mine. Costs for power transformers and half of the electrowinning circuit are also based
on a negotiated price with El Dorado. The cost of the stripping circuit equipment and the
balance of the electrowinning equipment is based on a negotiated price between
Queenstake and Decomissioning Services LLC, for items stored in Goldfield, Nevada.
Costs for other used equipment items were developed from either vendor quotes or recent
published auction prices.
A refurbishment allowance has been included for all major pieces of used equipment.
PAH has developed refurbishment costs for mining equipment based on PAH’s
inspection of part of the Blattner equipment and maintenance records provided by
Blattner. The magnitude of the refurbishment allowance for the crushing, stripping and
electrowinning equipment was estimated after inspection of the items by KCA and M.
Gleason and Company, an independent maintenance consultant. Copies of M. Gleason
and Company’s inspection reports are included in the appendices.
Installation requirements for each major piece of equipment are based upon standard
estimating guides or KCA’s in-house files. An allowance of 10% to 25% has been added
to US installation requirements to account for decreased productivity due to the use of
local labor.
9.2.3 Earthworks
Major earthwork quantities were estimated with the assistance of a computer civil design
software package from Eagle Point Software. Estimated unit rates for the project were
supplied by two potential earthwork contractors: Conservacion Y Señalamiento Vial,
S.A. de C.V. of Hermosillo, Mexico and Atotonilco Construcciones, S.A. de C.V. of
Guadalajara, Mexico. Both contractors reviewed preliminary construction drawings and
earthwork quantities prior to submitting their estimates. Conservacion Y Señalamiento
Vial included a visit to the site in their evaluation process. The unit rates estimated by
Conservacion Y Señalamiento Vial are used in the study on the basis of lowest cost and
their ability to carry out the required work.
9.2.4 Concrete
Concrete quantities are estimated based on major equipment weights and slab areas. The
installed unit rate of $314/m3 was derived from a local quote for delivered concrete at
$102/m3, estimates for form work and reinforcement at $157/m3, and installation labor at
$55/m3.
9.2.5 Steel
Structural steel requirements for the various major equipment items are based on projects
recently completed by KCA. Unit costs for steel, including installation labor and
equipment requirements, are based on information in KCA’s in-house database.
9.2.6 Piping
Piping, fittings, and valve quantities are estimated based on either material takeoffs or on
projects recently completed by KCA. Unit costs for piping were obtained from supplier
quotes. Manpower and equipment requirements for pipe installation are based on
information from KCA’s in-house database.
GDA provided equipment costs based on takeoffs and manpower requirements for major
electrical items such as the site distribution system, motor control centers, and
transformers.
Costs for items such as flowmeters, belt scales, pressure and temperature control devices,
etc. were based on quotes from suppliers or from information in KCA’s database.
9.2.8 Buildings
No capital is required for an administrative building as these functions will be housed in a
rented facility in the nearby community of Mocorito.
Mine management and engineering personnel will work out of two, 3.7 meter x 17.1
meter modular trailers at the project site. Process management offices will be contained
in a 3.7 meter x 13.4 meter modular trailer. Costs for the used trailers are based on a
quote from the El Paso, Texas office of GE Capital.
The laboratory will be comprised of three refurbished 12.2 meter by 2.3 meter shipping
containers. Costs for the modular units were developed from quotes for similar facilities
in KCA’s database.
The cost of building the truck shop & warehouse is based on an estimate from Miles
Brothers Construction, a steel building supplier located in Dayton, Nevada.
9.2.9 Other
The “other” category includes items such as spare parts, leach pad and process pond
liners, access road construction, relocation costs and miscellaneous items. Each of these
items is briefly discussed in the following sections.
9.2.10 Contingency
Contingencies of 5% to 15% were included in each facility. The degree of contingency
for each facility is based on the amount of detail available for costing the facility. Overall
contingency is approximately 11% of the direct capital costs.
The EPCM cost can be broken down into the following areas:
Table 9-2
EPCM Costs
Area Estimated Cost, $US
Services Expenses Total
Project Management $236,201 $25,070 $261,271
Engineering
Detail Engineering $184,354 $0 $184,354
Engineering Support $90,554 $7,405 $97,959
Mining Engineering $31,200 $1,790 $32,990
Procurement $28,950 $0 $28,950
Construction Management $186,165 $16,705 $202,870
Commissioning $57,698 $3,760 $61,458
Subtotal $815,122 $54,730 $869,852
Contingency, 10% $81,512 $5,473 $86,985
Total EPCM $896,634 $60,203 $956,837
The detailed EPCM cost estimate, presented in Tables 9-13, EPCM Cost Estimate, and
9-14, Detail Engineering Cost Estimate, attached to this section of the report, is based
upon the following:
• A project manager will be assigned to the project on a full time basis for the
duration of the project. In the initial stages of detail engineering, the project
manager will devote the majority of his time to the engineering effort and phase
into full time project management.
• Project accounting, procurement, and support functions will be supplied by the
project management contractor until the focus of the project moves to the project
site, after which Magistral personnel will assume most of these functions.
• The detail engineering effort will be conducted by the project management
contractor and will conclude with equipment selection and construction drawings
sufficient for contractor selection and construction. The detail engineering cost is
based upon drawing lists, specific design requirements, procurement activities
such as contract administration, inspection and expediting, and on-site
management requirements.
• The project management contractor will supply engineering support for the project
during the procurement and site construction phase.
• Final geotechnical and hydrologic studies on the site will be conducted by contract
engineers prior to the completion of the detail design effort.
• The project manager will be assisted with site activities, on an as needed basis, by
a construction supervisor, an electrical supervisor, a geotechnical engineer, and a
liner QA/QC technician. Additional construction management and construction
support will be provided by Queenstake project personnel.
• The remainder of the detailed mining engineering and mine design will be
completed by Queenstake engineering personnel, with minimal assistance from
the mining engineering consultant.
• All construction work will be undertaken by private contractors under contract to
Magistral, but directed by the project manager.
• Project training and commissioning will be done primarily by the contractor's
project manager, with assistance by a commissioning engineer, Magistral project
personnel, and vendor trainers.
As can be seen in the cost estimate worksheets attached, the cost estimate is based upon a
detailed assessment of the functions required for the project and the time required to
complete them.
Table 9-3
Owner’s Pre-production Costs - Summary
Item Estimated Cost
$US
Salaries and Wages $221,206
Benefits $98,111
Subtotal $319,322
Operating Expenses $334,067
Total $653,390
Contingency, 10% $65,339
IVA, 15% $107,809
Total $826,538
For each project employee required prior to the start of operations a cost estimate, based
upon the operating cost estimate, was made, depending upon the number of months
before production that the employee is required, the cost of the employee’s salary, wages
and benefits, the cost to recruit and hire the employee, and employment costs such as
safety and training supplies. Costs associated with telephone service, contract services
(environmental, legal, maintenance, and transportation), office expenses, travel, and
minor equipment purchases are also included for the pre-production period. Costs
associated with mine development and leach pad gravel production, which will be done
by Magistral personnel, are included in the project capital cost estimate, and are not in
owner’s costs.
Much of the equipment used in the construction of the project will be purchased by
Magistral for use during operations. The costs of using these items, including a mobile
crane and forklift, have been included as owner’s costs, not in the capital cost estimate.
Initially only two project personnel will be employed, the general manager and the
environmental manager. In month three, as the project focus moves to the site, the
mining manager arrives, and is joined in month four by the mining engineer and the
process manager. This will allow the final mining engineering to be completed prior the
beginning of mine development and will involve the process manager in the entire field
construction process.
When mine development begins, the geologist and the ore control personnel will be on
site, as will the mine maintenance superintendent and the initial staff for the laboratory.
During this same period, the remainder of the administrative staff will be hired in order to
provide construction management support to the project and to establish project practices
and procedures. There are no owner’s costs associated with the mining department
during the three month mine development period. All costs incurred during this period
are included in the mine development section of the pre-production capital cost estimates.
The mine and process supervisory personnel will be hired to direct the mine development
and leach pad gravel crushing operations, respectively. They are not shown on the
attached schedule since their costs are included in the capital cost estimates.
The estimate contains a 10% contingency and includes 15% IVA, which will be
recovered during project operations.
Initial supply quantities for consumable items are based on estimated annual usage in the
first year of the project. For the most part, the estimate is based on a two month supply of
operating consumables and a one month inventory of supplies that will be available
locally. In addition, the estimate includes two sets of liners for each crusher and three
sets of screen cloth, since the actual life of these items is difficult to accurately predict
and startup conditions can dramatically affect their consumption.
In the economic analysis, it has been assumed that the bulk of these supplies will be
consumed in the final stages of the operation.
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
MINE EQUIPMENT
Equipment
Major Equip. Purchase (used) 1 LS 1747000 1,747.00 1,747.00 1,747
Major Equip. Refurbishment 1 LS 70000 70.00 70.00 70
Service Equipment 1 LS 229000 229.00 229.00 229
Major Equip. Assembly 1 LS 2900 2.90 2.90 0.44 3
Transportation to Site
Denver to Nogales 1 LS 308.2 40.04 - - 40
Nogales to Site 1 LS 348.2 66.51 9.98 76
Other
Spare Parts Inventory 1 LS 227510 227.51 227.51 34.13 262
Contingency (applied only to equip. & refurb.) 10% - - - 204.60 204.60 - - 205
MINE DEVELOPMENT
Pre-Production Op. Costs
Drilling 1 LS 47783 47.78 47.78 7.17 55
Blasting 1 LS 68534 68.53 68.53 10.28 79
Loading 1 LS 32994 32.99 32.99 4.95 38
Hauling 1 LS 43280 43.28 43.28 6.49 50
Pits/Roads/Dumps 1 LS 55049 55.05 55.05 8.26 63
General Mine, Salaries & Wages 1 LS 149048 149.05 149.05 22.36 171
Mine Maintenance 1 LS 28690 28.69 28.69 4.30 33
EIPS Credit for Pre-Production Diesel Fuel 178,935 liters 0.139 (24.87) (24.87) (25)
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Equipment
General
Lube, diesel & waste oil pumps 6 ea. 2.0 47 3,000 18.00 0.09 50 5.31 1.59 50 1.75 0.53 2.12 3.03 23
Mobile crane - 25 tonne (used) 1 ea. 40,000 40.00 - 32 5.31 0.17 32 1.75 0.06 0.23 6.03 46
Flatbed truck (used) 1 ea. 17,000 17.00 - 16 5.31 0.08 16 1.75 0.03 0.11 2.57 20
Forklift (used) 1 ea. 10.0 47 10,000 10.00 0.47 16 5.31 0.08 16 1.75 0.03 0.11 1.59 12
Shelving & furnishings 1 lot 9.0 47 30,000 30.00 0.42 300 5.31 1.59 300 1.75 0.53 2.12 4.88 37
Computer w/ printer 1 ea. 0.1 47 2,000 2.00 0.00 8 5.31 0.04 8 1.75 0.01 0.06 0.31 2
Subtotal Equipment 21.1 117.00 0.99 3.57 1.18 4.74 18.41 141
Earthworks
General
Clear & grub 5,400 m2 0.41 2.21 2.21 0.33 3
Cut to compacted fill 6,770 m3 1.74 11.78 11.78 1.77 14
Concrete
General 60 m3 314 18.84 18.84 2.83 22
Piping
Fuel, lube, waste oil area 1 lot 8.0 47 7,000 7.00 0.38 250 5.31 1.33 250 1.75 0.44 1.77 1.37 11
Valves & fittings 1 lot 1.0 47 2,200 2.20 0.05 200 5.31 1.06 200 1.75 0.35 1.41 0.55 4
Building
General Building 401 m2 122 48.92 48.92 7.34 56
Other
Security fencing 300 m - 32.54 9.76 9.76 1.46 11
Gate 1 ea. 1.0 47 400 0.40 0.05 12.0 5.31 0.06 12.0 1.75 0.02 0.08 0.08 1
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
CRUSHING
Equipment
Primary Crushing System
Bulkhead 1 ea 16.4 47 21,600 21.60 0.77 1,000 5.31 5.31 1,000 1.75 1.75 7.06 4.41 34
Primary Crushing Plant - used 1 ea 50.2 47 124,000 124.00 2.36 700 5.31 3.72 700 1.75 1.23 4.94 0.74 132
Truck dump hopper - used 1 ea 11.0 47 10,000 10.00 0.52 75 5.31 0.40 75 1.75 0.13 0.53 0.08 11
Metal detector 1 ea. 0.1 306 8,300 8.30 0.03 60 5.31 0.32 60 1.75 0.11 0.42 0.06 9
Belt scale 1 ea. 0.1 306 9,600 9.60 0.03 60 5.31 0.32 60 1.75 0.11 0.42 0.06 10
Self-cleaning magnet 1 ea. 1.0 306 14,800 14.80 0.31 80 5.31 0.42 80 1.75 0.14 0.56 0.08 16
Secondary/Tertiary Crushing System -
Cone Crushers/Structure - used 1 ea. 45.6 47 241,000 241.00 2.14 800 5.31 4.25 800 1.75 1.40 5.65 0.85 250
Vibrating Double Deck Screen 1 ea. 10.0 306 47,000 47.00 3.06 200 5.31 1.06 200 1.75 0.35 1.41 0.21 52
Cross Belt Sampler 1 ea. 1.5 306 23,000 23.00 0.46 48 5.31 0.25 48 1.75 0.08 0.34 0.05 24
Air compressor 1 ea. 0.1 47 6,000 6.00 0.00 32 5.31 0.17 32 1.75 0.06 0.23 0.93 7
Lime Silo 1 ea. 13.0 47 45,300 45.30 0.61 60 5.31 0.32 60 1.75 0.11 0.42 6.95 53
Load Out Bin 1 ea. 25.8 47 85,000 85.00 1.21 112 5.31 0.59 112 1.75 0.20 0.79 13.05 100
Conveyors
Jaw Discharge (Included in Primary) 1 ea.
Screen Feed (CV-2) 1 ea. 1.3 47 15,750 15.75 0.06 72 5.31 0.38 72 1.75 0.13 0.51 2.45 19
Under Screen (CV-6) 1 ea. 0.4 47 4,875 4.88 0.02 24 5.31 0.13 24 1.75 0.04 0.17 0.76 6
Secondary Cone Feed (CV-3) 1 ea. 1.0 47 10,000 10.00 0.05 56 5.31 0.30 56 1.75 0.10 0.40 1.57 12
Tertiary Cone Feed (CV-8) 1 ea. 1.0 47 10,000 10.00 0.05 56 5.31 0.30 56 1.75 0.10 0.40 1.57 12
Under Cone (CV-4) 1 ea. 0.7 47 8,060 8.06 0.03 48 5.31 0.25 48 1.75 0.08 0.34 1.26 10
Screen Return (CV-5) 1 ea. 1.0 47 10,625 10.63 0.05 56 5.31 0.30 56 1.75 0.10 0.40 1.66 13
Tertiary Cone to Product (CV-9) 1 ea. 1.0 47 9,375 9.38 0.05 48 5.31 0.25 48 1.75 0.08 0.34 1.46 11
Final Product (CV-7) 1 ea. 3.6 47 45,750 45.75 0.17 208 5.31 1.10 208 1.75 0.36 1.47 7.11 54
Subtotal Equipment 184.8 750.04 11.97 20.15 6.64 26.79 45.33 834
Earthworks
General
Clear & grub 6,000 m2 - - - 0.41 2.46 2.46 0.37 3
Cut to compacted fill 800 m3 - - 1.74 1.39 1.39 0.21 2
Mine Waste to compacted fill 17,000 m3 1.74 29.58 29.58 4.44 34
Concrete
General
Primary Crushing System 44 m3 314 13.82 13.82 2.07 16
Secondary Crushing System 36 m3 314 11.15 11.15 1.67 13
Screen System - m3 314 - - - -
Conveyors 7 m3 314 2.20 2.20 0.33 3
Lime Silo 8 m3 314 2.51 2.51 0.38 3
Load Out Bin 12 m3 314 3.77 3.77 0.57 4
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Steel
General
Under Chutes 3 T 3.0 47 2,200 6.60 0.14 60 5.31 0.96 60 1.75 0.32 1.27 1.20 9
Support Steel, Screen System 3 T 3.0 47 2,200 6.60 0.14 200 5.31 3.19 200 1.75 1.05 4.24 1.65 13
Piping
Dust suppression 1 lot 2.0 47 2,000 2.00 0.09 200 5.31 1.06 200 1.75 0.35 1.41 0.53 4
Valves, fittings 1 lot 1.0 47 900 0.90 0.05 200 5.31 1.06 200 1.75 0.35 1.41 0.35 3
Other
General
Bobcat loader (used) 1 ea. 1.0 47 19,000 19.00 0.05 50 5.31 0.27 50 1.75 0.09 0.35 2.91 22
Increase Used Dump Hopper Capac. 5 T 5.4 47 2,200 11.88 0.25 120 5.31 3.44 120 1.75 1.13 4.57 2.51 19
Refurbish Used Primary Crusher 1 ea. 2.0 47 9,000 9.00 0.09 80 5.31 0.42 80 1.75 0.14 0.56 1.45 11
Refurbish Used Cone Crushers 2 ea. 3.0 47 5,300 10.60 0.14 80 5.31 0.85 80 1.75 0.28 1.13 1.78 14
Spare Parts Inventory 1 lot 30.0 47 56,141 56.14 1.41 100 5.31 0.53 0.53 8.71 67
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Piping
Heap leach pad system general
Ore drainage solution collection
Perforated pipe, 100mm 8,000 m 3.6 306 1.18 9.44 1.10 0.02 5.31 0.85 0.02 1.75 0.28 1.13 0.17 12
Perforated N-12 pipe, 300mm 950 m 4.5 306 12.95 12.30 1.38 0.04 5.31 0.20 0.04 1.75 0.07 0.27 0.04 14
Solid N-12 pipe, 300mm 2,640 m 12.6 306 12.95 34.19 3.86 0.04 5.31 0.56 0.04 1.75 0.18 0.75 0.11 39
Collection ditch drainage pipe
Solid CPT N-12, 300mm 120 m 0.6 306 12.95 1.55 0.18 0.04 5.31 0.03 0.04 1.75 0.01 0.03 0.01 2
Other
Heap leach pad system general
Liner contractor mob/demob 1 LS 2,000 2.00 2.00 0.30 2
Lining, 60 mil LLDPE smooth 70,500 m2 115.0 205 2.25 158.63 23.58 0.60 42.30 42.30 6.35 231
Geofabric Clay Liner 32,250 m2 213.0 264 2.80 90.14 56.23 1.07 34.51 34.51 5.18 186
-
Contingency 15% 48.94 12.99 0.27 61.25 61.53 9.68 - 133
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Equipment
Pregnant Solution Pond
Pregnant solution pump 1 ea. 0.1 306 5,330 5.33 0.04 40 5.31 0.21 40 1.75 0.07 0.28 0.04 6
Preg soln pump mount and slide 1 ea. 0.5 306 4,500 4.50 0.15 30 5.31 0.16 30 1.75 0.05 0.21 0.03 5
Antiscalant metering pump 1 ea. 0.1 306 1,600 1.60 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 2
Intermediate Solution Pond
Primary leach feed pump 1 ea. 0.3 306 12,110 12.11 0.10 40 5.31 0.21 40 1.75 0.07 0.28 0.04 13
Antiscalant metering pump 1 ea. 0.1 306 1,600 1.60 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 2
Prim. leach soln flowmeter 1 ea. 0.1 306 3,900 3.90 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 4
Prim. leach pump mount and slide 1 ea. 0.5 306 4,800 4.80 0.15 30 5.31 0.16 30 1.75 0.05 0.21 0.03 5
Barren Leach Solution
Intermediate leach feed pump 1 ea. 0.9 306 7,700 7.70 0.26 80 5.31 0.42 80 1.75 0.14 0.56 0.08 9
Intermediate feed soln flowmeter 1 ea. 0.1 306 3,900 3.90 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 4
Antiscalant metering pump 1 ea. 0.1 306 1,600 1.60 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 2
Excess Pond
Excess pond pump 1 ea. 0.1 306 4,630 4.63 0.03 40 5.31 0.21 40 1.75 0.07 0.28 0.04 5
Excess pond pump mount & slide 1 ea. 0.5 306 4,800 4.80 0.15 30 5.31 0.16 30 1.75 0.05 0.21 0.03 5
Excess solution flowmeter 1 ea. 0.1 306 3,900 3.90 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 4
Antiscalant metering pump 1 ea. 0.1 306 1,600 1.60 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 2
HDPE pipe welder w generator 1 ea. 0.5 47 15,400 15.40 0.02 12 5.31 0.06 12 1.75 0.02 0.08 2.33 18
Subtotal Equipment 4.1 77.4 1.1 2.0 0.7 2.63 2.71 84
Concrete
Process pump general
Process pump slides 2.1 m3 314 0.66 0.66 0.10 1
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Piping
Pregnant Solution Pump
ADR plant feed 25 m 0.6 47 6.10 0.15 0.03 2 5.31 0.27 2 1.75 0.09 0.35 0.08 1
Distribution header 1 ea. 1.0 47 3,200 3.20 0.05 30 5.31 0.16 30 1.75 0.05 0.21 0.52 4
Floating intake 1 ea. 1.0 47 2,200 2.20 0.05 30 5.31 0.16 30 1.75 0.05 0.21 0.37 3
Valves, fittings 1 lot 1.0 47 1,400 1.40 0.05 40 5.31 0.21 40 1.75 0.07 0.28 0.26 2
Primary Leach Feed Pump
Distribution header 1 ea. 1.0 47 3,200 3.20 0.05 30 5.31 0.16 30 1.75 0.05 0.21 0.52 4
Floating intake 1 ea. 1.0 47 3,200 3.20 0.05 30 5.31 0.16 30 1.75 0.05 0.21 0.52 4
Valves, fittings 1 lot 1.0 47 1,400 1.40 0.05 40 5.31 0.21 40 1.75 0.07 0.28 0.26 2
Excess Solution Pond Pump
Intermediate pond feed 300 m 0.4 47 3.49 1.05 0.14 2 5.31 3.19 2 1.75 1.05 4.24 0.81 6
Distribution header 1 ea. 1.0 47 3,200 3.20 0.05 30 5.31 0.16 30 1.75 0.05 0.21 0.52 4
Floating intake 1 ea. 1.0 47 3,200 3.20 0.05 30 5.31 0.16 30 1.75 0.05 0.21 0.52 4
Heap irrigation system
Prim. leach main, 200 mm HDPE 190 m 2.4 47 25.61 4.87 0.11 1 5.31 1.01 1 1.75 0.33 1.34 0.95 7
Int. leach main, 200 mm HDPE 190 m 2.4 47 25.61 4.87 0.11 1 5.31 1.01 1 1.75 0.33 1.34 0.95 7
Header pipes, 150 mm ymp 730 m 3.9 47 13.12 9.58 0.18 1 5.31 3.88 1 1.75 1.28 5.15 2.24 17
Drip Tubing 33,500 m 0.6 47 0.20 6.70 0.03 5.31 1.75 1.01 8
Filters stations (2 filters/station) 2 ea. 3.0 47 5,000 10.00 0.14 60 5.31 0.64 60 1.75 0.21 0.85 1.65 13
Valves, fittings 1 lot 2.0 47 10,300 10.30 0.09 130 5.31 0.69 130 1.75 0.23 0.92 1.70 13
Other
Spare parts inventory 1 lot 2.0 47 6,669 6.67 0.09 20 5.31 0.11 1.75 0.11 1.03 8
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
PROCESS PONDS
Earthworks
Ponds General
Clear & grub 45,000 m2 0.41 18.45 18.45 2.77 21
Remove & stockpile topsoil 338 m3 2.80 0.95 0.95 0.14 1
Dozer work on sub-grade 3,000 m2 0.28 0.84 0.84 0.13 1
Mine waste to compacted dam fill 55,000 m3 1.74 95.70 95.70 14.36 110
Clay/soil to compacted bedding fill 6,800 m3 5.26 35.77 35.77 5.37 41
Piping
Ponds General
Leak detection pipe, 150 mm 40 m 0.3 47 8.43 0.34 0.01 0.5 5.31 0.11 0.5 1.75 0.04 0.14 0.07 1
Other
Ponds General
Ditch lining, 60 mil LLDPE 1,800 m2 2.9 205 2.25 4.05 0.59 0.60 1.08 1.08 0.16 6
Ditch geofabric clay liner 1,430 m2 9.5 264 2.80 4.00 2.49 1.07 1.53 1.53 0.23 8
Pregnant Solution Pond
Lining, 60 mil LLDPE smooth 13,200 m2 21.6 205 2.25 29.70 4.43 0.60 7.92 7.92 1.19 43
Geofabric Clay Liner 3,300 m2 21.9 264 2.80 9.24 5.78 1.07 3.53 3.53 0.53 19
Geonet 6,600 m2 27.0 205 1.39 9.17 5.54 0.40 2.64 2.64 0.40 18
Intermediate Solution Pond
Lining, 60 mil LLDPE smooth 10,400 m2 17.0 205 2.25 23.40 3.49 0.60 6.24 6.24 0.94 34
Geofabric Clay Liner 2,600 m2 17.2 264 2.80 7.28 4.54 1.07 2.78 2.78 0.42 15
Geonet 6,400 m2 26.2 205 1.39 8.90 5.37 0.40 2.56 2.56 0.38 17
Excess Pond
Lining, 60 mil LLDPE smooth 33,300 m2 54.5 205 2.25 74.93 11.17 0.60 19.98 19.98 3.00 109
Geofabric Clay Liner 16,650 m2 109.5 264 2.80 46.62 28.91 1.07 17.82 17.82 2.67 96
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
PROCESS PLANT
Equipment
Carbon Adsorption Circuit
Safety screen 1 ea. 0.9 306 6,800 6.80 0.28 60 5.31 0.32 60 1.75 0.11 0.42 0.06 8
Barren solution tank 1 ea. 3.6 47 7,900 7.90 0.17 30 5.31 0.16 30 1.75 0.05 0.21 1.24 10
Adsorption column 5 ea. 15.0 306 16,500 82.50 4.59 50 5.31 1.33 50 1.75 0.44 1.77 0.26 89
Pregnant solution sampler 1 ea. 0.1 306 1,000 1.00 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 1
Barren solution sampler 1 ea. 0.1 306 1,000 1.00 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 1
Adsorption area sump pump 1 ea. 0.2 306 5,100 5.10 0.06 50 5.31 0.27 50 1.75 0.09 0.35 0.05 6
Antiscalant metering pump 1 ea. 0.1 306 1,800 1.80 0.03 8 5.31 0.04 8 1.75 0.01 0.06 0.01 2
Pregnant solution flowmeter 1 ea. 0.1 306 3,900 3.90 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 4
Carbon Elution System
Elution circuit package - used 1 ea. 45,000 45.00 9.80 350 5.31 1.86 350 1.75 0.61 2.47 0.37 58
Eluant flowmeter 1 ea. 0.1 306 2,900 2.90 0.02 10 5.31 0.05 10 1.75 0.02 0.07 0.01 3
Eluant solution sampler 1 ea. 0.1 306 1,000 1.00 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 1
Electrowinning
EW cell package, Goldfield - used 1 ea. 14,000 14.00 4.90 60 5.31 0.32 60 1.75 0.11 0.42 0.06 19
EW cell package, Eldorado - used 1 ea. 0.5 47 12,000 12.00 0.02 40 5.31 0.21 40 1.75 0.07 0.28 0.04 12
Electrowinning eluate sampler 1 ea. 0.1 306 1,200 1.20 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 1
Electrowinning eluant sampler 1 ea. 0.1 306 1,200 1.20 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 1
Electrowinning area sump pump 1 ea. 0.2 306 4,000 4.00 0.06 30 5.31 0.16 30 1.75 0.05 0.21 0.03 4
Electrowinning cell mag flowmeter 1 ea. 0.1 306 2,900 2.90 0.02 10 5.31 0.05 10 1.75 0.02 0.07 0.01 3
Acid Wash Circuit
Acid wash circuit package - used 1 ea. 6,000 6.00 4.90 60 5.31 0.32 60 1.75 0.11 0.42 0.06 11
Acid addition barrel pump 1 ea. 0.1 306 1,200 1.20 0.02 5 5.31 0.03 5 1.75 0.01 0.04 0.01 1
Acid wash tank recirculation pump 1 ea. 0.1 306 4,500 4.50 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 5
Carbon Transfer 1 ea.
Carbon fines screen 1 ea. 0.5 306 17,200 17.20 0.15 90 5.31 0.48 90 1.75 0.16 0.64 0.10 18
Carbon storage tank 1 ea. 1.3 47 2,400 2.40 0.06 40 5.31 0.21 40 1.75 0.07 0.28 0.41 3
Carbon transfer jib crane 1 ea. 0.1 306 4,200 4.20 0.03 30 5.31 0.16 30 1.75 0.05 0.21 0.03 4
Carbon transfer pump 3 ea. 0.4 306 5,400 16.20 0.12 30 5.31 0.48 30 1.75 0.16 0.64 0.10 17
Carbon handling area sump pump 1 ea. 0.2 306 4,000 4.00 0.06 30 5.31 0.16 30 1.75 0.05 0.21 0.03 4
Carbon regeneration
Kiln dewatering screen 1 ea. 0.5 306 17,200 17.20 0.15 90 5.31 0.48 90 1.75 0.16 0.64 0.10 18
Regeneration kiln 1 ea. 2.5 306 44,500 44.50 0.77 120 5.31 0.64 120 1.75 0.21 0.85 0.13 46
Kiln feed hopper 1 ea. 1.0 306 1,800 1.80 0.31 40 5.31 0.21 40 1.75 0.07 0.28 0.04 2
Quench tank 1 ea. 1.0 47 1,500 1.50 0.05 30 5.31 0.16 30 1.75 0.05 0.21 0.26 2
Carbon fines filter press, used 1 ea. 2.0 306 13,600 13.60 0.61 50 5.31 0.27 50 1.75 0.09 0.35 0.05 15
Carbon fines storage tank 1 ea. 1.3 47 2,400 2.40 0.06 40 5.31 0.21 40 1.75 0.07 0.28 0.41 3
Carbon regen. area sump pump 1 ea. 0.2 306 4,000 4.00 0.06 30 5.31 0.16 30 1.75 0.05 0.21 0.03 4
Carbon fines press feed pump 1 ea. 0.3 306 4,700 4.70 0.09 40 5.31 0.21 40 1.75 0.07 0.28 0.04 5
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Smelting General
Smelting furnace 1 ea. 1.0 306 22,200 22.20 0.31 40 5.31 0.21 40 1.75 0.07 0.28 0.04 23
Furnace wet scrubber 1 ea. 1.2 306 19,200 19.20 0.37 60 5.31 0.32 60 1.75 0.11 0.42 0.06 20
Refinery safe 1 ea. 1.0 306 5,800 5.80 0.31 4 5.31 0.02 4 1.75 0.01 0.03 0.00 6
ADR Circuit General
NaCN mix tank 1 ea. 1.1 47 2,400 2.40 0.05 40 5.31 0.21 40 1.75 0.07 0.28 0.41 3
NaOH mix tank 1 ea. 0.3 47 500 0.50 0.01 30 5.31 0.16 30 1.75 0.05 0.21 0.11 1
New Carbon attrition tank 1 ea. 0.6 47 1,400 1.40 0.03 40 5.31 0.21 40 1.75 0.07 0.28 0.26 2
NaCN mix tank agitator 1 ea. 0.3 306 2,300 2.30 0.09 30 5.31 0.16 30 1.75 0.05 0.21 0.03 3
NaOH mix tank agitator 1 ea. 0.2 306 2,100 2.10 0.06 30 5.31 0.16 30 1.75 0.05 0.21 0.03 2
Attrition tank agitator 1 ea. 0.4 306 6,000 6.00 0.12 30 5.31 0.16 30 1.75 0.05 0.21 0.03 6
Plant air compressor 1 ea. 0.2 306 1,900 1.90 0.06 50 5.31 0.27 50 1.75 0.09 0.35 0.05 2
Reagent area jib crane 1 ea. 0.1 306 4,200 4.20 0.03 30 5.31 0.16 30 1.75 0.05 0.21 0.03 4
NaCN addition pump 2 ea. 0.1 306 3,000 6.00 0.03 30 5.31 0.32 30 1.75 0.11 0.42 0.06 7
NaOH addition pump 1 ea. 0.1 306 1,100 1.10 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 1
Safety shower 2 ea. 0.2 306 900 1.80 0.06 50 5.31 0.53 50 1.75 0.18 0.71 0.11 3
Reagent area sump pump 1 ea. 0.2 306 4,000 4.00 0.06 30 5.31 0.16 30 1.75 0.05 0.21 0.03 4
Forklift (used) 1 ea. 10.0 47 10,000 10.00 0.47 8 5.31 0.04 8 1.75 0.01 0.06 1.58 12
Subtotal Equipment 49.6 430.50 29.67 12.77 4.21 16.98 6.96 484
Earthworks
ADR Area General 4,000 m3 3.00 12.00 12.00 1.80 14
Concrete
ADR Plant General
Slabs 115 m3 314 36.11 36.11 5.42 42
Footings 40 m3 314 12.56 12.56 1.88 14
Steel -
ADR Circuit General
Skids 2 ea. 7.0 306 8,300 16.60 2.14 20 5.31 0.21 20 1.75 0.07 0.28 0.04 19
Structural, grating & handrails 1 lot 12.0 47 20,100 20.10 0.56 500 5.31 2.66 500 1.75 0.88 3.53 3.63 28
Stacks/ductwork 1 lot 8.0 47 69 0.07 0.38 175 5.31 0.93 175 1.75 0.31 1.24 0.25 2
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Piping -
ADR Circuit General
Piping, fittings, pre-assembled 1 lot 15.0 306 56,800 56.80 4.59 400 5.31 2.12 400 1.75 0.70 2.82 0.42 65
Valves, pre-assembled 1 lot 5.0 306 38,200 38.20 1.53 400 5.31 2.12 400 1.75 0.70 2.82 0.42 43
Buildings
Protective siding & roof for kiln 1 lot 0.2 47 1,500 1.50 0.01 25 5.31 0.13 25 1.75 0.04 0.18 0.25 2
ADR Office 18 m2 200 3.50 3.50 0.53 4
Electrowinning/smelt Room 51 m3 279 14.23 14.23 2.13 16
Other
Dismantle/load used circuits 1 LS 14000 14.00 14.00 2.10 16
Refurbish used equipment 1 LS 10000 10.00 10.00 1.50 12
Security fencing 320 m - 32.54 10.41 10.41 1.56 12
Spare parts inventory 1 lot 14.0 47 26,590 26.59 0.66 60 5.31 0.32 60 1.75 0.11 0.42 4.15 32
-
Contingency 5% 34.58 2.18 1.27 6.06 7.32 1.76 - 46
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
LABORATORY
Equipment
Fire Assay
Electric furnace 2 ea. 0.8 306 5,400 10.80 0.24 40 5.31 0.42 40 1.75 0.14 0.56 0.08 12
Electric furnace (carbons) 1 ea. 0.2 306 3,000 3.00 0.06 40 5.31 0.21 40 1.75 0.07 0.28 0.04 3
Furnace exhaust fan 1 ea. 0.1 306 3,200 3.20 0.03 30 5.31 0.16 30 1.75 0.05 0.21 0.03 3
Ultramicro balance 1 ea. 0.1 306 6,100 6.10 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 6
Miscellaneous supplies, tools 1 lot 0.5 306 12,200 12.20 0.15 80 5.31 0.42 80 1.75 0.14 0.56 0.08 13
Sample Preparation
Drying oven 1 ea. 0.3 306 12,600 12.60 0.09 20 5.31 0.11 20 1.75 0.04 0.14 0.02 13
Pulverizer, ring & puck 2 ea. 0.2 306 5,300 10.60 0.06 40 5.31 0.42 40 1.75 0.14 0.56 0.08 11
Jaw crusher 1 ea. 0.3 306 7,600 7.60 0.09 40 5.31 0.21 40 1.75 0.07 0.28 0.04 8
Dust collector 1 ea. 0.3 306 13,000 13.00 0.09 50 5.31 0.27 50 1.75 0.09 0.35 0.05 13
Air compressor 1 ea. 0.1 306 1,000 1.00 0.03 30 5.31 0.16 30 1.75 0.05 0.21 0.03 1
Cone crusher 1 ea. 0.3 306 6,900 6.90 0.09 40 5.31 0.21 40 1.75 0.07 0.28 0.04 7
Miscellaneous supplies, tools 1 lot 0.4 306 8,500 8.50 0.12 60 5.31 0.32 60 1.75 0.11 0.42 0.06 9
Wet Chemistry
AA spectrophotometer 1 ea. 0.2 306 26,500 26.50 0.06 60 5.31 0.32 60 1.75 0.11 0.42 0.06 27
Fume hood 1 ea. 0.3 306 8,200 8.20 0.09 40 5.31 0.21 40 1.75 0.07 0.28 0.04 9
Water deionizer 1 ea. 0.1 306 2,300 2.30 0.03 20 5.31 0.11 20 1.75 0.04 0.14 0.02 2
Miscellaneous glassware, supplies 1 lot 0.5 306 11,700 11.70 0.15 60 5.31 0.32 60 1.75 0.11 0.42 0.06 12
Metallurgical
Sieve shaker 1 ea. 0.1 306 2,500 2.50 0.03 30 5.31 0.16 30 1.75 0.05 0.21 0.03 3
Bottle roll machine 1 ea. 0.2 306 2,000 2.00 0.06 40 5.31 0.21 40 1.75 0.07 0.28 0.04 2
PVC columns 4 ea. 0.1 306 200 0.80 0.03 10 5.31 0.21 10 1.75 0.07 0.28 0.04 1
Centrifuge unit 1 ea. 0.1 306 3,200 3.20 0.03 30 5.31 0.16 30 1.75 0.05 0.21 0.03 3
Peristaltic pump 1 ea. 0.1 306 3,000 3.00 0.03 10 5.31 0.05 10 1.75 0.02 0.07 0.01 3
Miscellaneous supplies, glassware 1 lot 0.2 306 2,100 2.10 0.06 40 5.31 0.21 40 1.75 0.07 0.28 0.04 2
Subtotal Equipment 5.5 157.80 1.68 4.99 1.65 6.64 1.00 167
Earthworks
General - Included in ADR - m3 2.30 - - - -
Concrete
Slab 27 m3 314 8.45 8.45 1.27 10
Waste solution collection sump 1 m3 314 0.16 0.16 0.02 0
Buildings
Refurbished shipping containers 3 ea. 12.3 47 15,000 45.00 0.58 120 5.31 1.91 120 1.75 0.63 2.54 7.22 55
Roofed Area 100 m2 53 5.31 5.31 0.80 6
Other
General
Spare parts inventory 1 lot 2.0 306 8,450 8.45 0.61 20 5.31 0.11 0.11 0.02 9
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
POWER SYSTEM
Equipment
CFE Charges
New 33 KV line to site 23 km 11700 269.10 269.10 40.37 309
Connection charge 1 LS 63000 63.00 63.00 9.45 72
Remove old power lines in mine area 1.5 km 7400 11.10 11.10 1.67 13
Install new lines for local connections 1.6 km 11700 18.72 18.72 2.81 22
Back-up generator for soln pumping
Diesel generator (used) 1 ea. 3.5 306 64,000 64.00 1.07 300 5.31 1.59 300 1.75 0.53 2.12 0.32 68
Switchgear 1 ea. 1.0 306 25,000 25.00 0.31 100 5.31 0.53 100 1.75 0.18 0.71 0.11 26
Site Distribution
Overhead line 2 km 8.0 47 30,900 61.80 0.38 670 5.31 7.12 670 1.75 2.35 9.46 10.75 82
Underground Dips 1 lot 3.0 47 17,300 17.30 0.14 80 5.31 0.42 80 1.75 0.14 0.56 2.70 21
Transformer Sevices 1 lot 2.0 47 5,900 5.90 0.09 90 5.31 0.48 90 1.75 0.16 0.64 0.99 8
Earthworks
General
Generation - Included in ADR m3 - - - -
Distribution 300 m3 3.00 0.90 0.90 0.14 1
Concrete
General
Generation 25 m3 314 7.85 7.85 1.18 9
Distribution 20 m3 314 6.28 6.28 0.94 7
Other
General
Spare parts inventory 1 lot 2.0 47 8,700 8.70 0.09 50 5.31 0.27 50 1.75 0.09 0.35 1.37 11
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Earthworks
General
Clear & prepare pipeline routes 6,480 m2 0.12 0.78 0.78 0.12 1
Fresh water pond
Cut 175 m3 5.00 0.88 0.88 0.13 1
Concrete
Water truck tank support 6.0 m3 314 1.88 1.88 0.28 2
Misc. 1.0 m3 314 0.31 0.31 0.05 0
Steel
General 1 T 1.0 47 2,200 2.20 0.05 40 5.31 0.21 40 1.75 0.07 0.28 0.38 3
Piping
100 mm HDPE,well to pond 1,520 m 3.4 47 2.56 3.89 0.16 0.75 5.31 6.05 0.75 1.75 2.00 8.05 1.81 14
100 mm HDPE, pond to facilities 800 m 1.8 47 2.56 2.05 0.08 0.75 5.31 3.19 0.75 1.75 1.05 4.24 0.96 7
Valves & fittings 1 lot 0.5 47 3,000 3.00 0.02 200.0 5.31 1.06 200 1.75 0.35 1.41 0.67 5
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
INFRASTRUCTURE
Equipment
Admin. complex furniture, supplies 1 lot 2.5 47 10,000 10.00 0.12 100 5.31 0.53 100 1.75 0.18 0.71 1.62 12
Mine & process trailers furnishings 1 lot 3.0 47 9,000 9.00 0.14 90 5.31 0.48 90 1.75 0.16 0.64 1.47 11
Computers 11 ea. 0.4 47 2,000 22.00 0.02 4 5.31 0.23 4 1.75 0.08 0.31 3.35 26
Printers (2), plotter (1), digitizers (1) 4 ea. 0.4 47 1,000 4.00 0.02 10 5.31 0.21 10 1.75 0.07 0.28 0.65 5
Survey equipment 1 lot 0.1 47 20,000 20.00 0.00 8 5.31 0.04 8 1.75 0.01 0.06 3.01 23
Misc. maintenance tools 1 lot 1.0 47 10,000 10.00 0.05 1.51 12
Telephone/Radio System 1 ea. 0.5 47 53,000 53.00 0.02 40 5.31 0.21 40 1.75 0.07 0.28 8.00 61
Security
Livestock fence: leach pad & ponds 2,500 m - - 6.28 15.70 15.70 2.36 18
Livestock fence: San Rafael area 3,400 m - - 6.28 21.35 21.35 3.20 25
Ambulance (used) 1 ea. 15,000 15.00 0.20 4 5.31 0.02 4 1.75 0.01 0.03 2.28 18
Environmental monitoring equipment 1 lot 1.5 47 15,000 15.00 0.07 20 5.31 0.11 20 1.75 0.04 0.14 2.28 17
Backhoe (used) 1 ea. 8.0 47 25,000 25.00 0.38 20 5.31 0.11 20 1.75 0.04 0.14 3.83 29
AC units for office trailers 6 ea. 0.3 47 600 3.60 0.01 15 5.31 0.48 20 1.75 0.21 0.69 0.65 5
Septic tanks 3 ea. 2.0 47 1,000 3.00 0.09 16 5.31 0.25 16 1.75 0.08 0.34 0.51 4
Subtotal Equipment 19.7 189.60 1.13 2.68 37.99 40.66 34.71 266
Earthworks
Waste Disposal
ADR/Lab septic system 30 m3 3.00 0.09 0.09 0.01 0
Crusher septic system 30 m3 3.00 0.09 0.09 0.01 0
Shop/warehouse septic system 30 m3 3.00 0.09 0.09 0.01 0
Buildings
Admin. office - rental in Mocorito
Security post 50 m3 3.00 0.15 0.15 0.02 0
TABLE 9-4
PRE-PRODUCTION CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Concrete
Communications 2 m3 314 0.50 0.50 0.08 1
Process management office trailer 7 m3 314 2.17 2.17 0.32 2
Mine management office trailers 17 m3 314 5.34 5.34 0.80 6
Buildings
Admin. office - rental in Mocorito - - - -
Process mgmt office trailer 1 ea. 17,600 17.60 3.04 25 5.31 0.13 25 1.75 0.04 0.18 0.03 21
Mine management office trailer 2 ea. 20,500 41.00 6.07 30 5.31 0.32 30 1.75 0.11 0.42 0.06 48
Security post 10 m2 161 1.61 1.61 0.24 2
Other
Site Access Roads
Road upgrades for mine traffic 14 km 4500 60.75 60.75 9.11 70
New access road for local traffic 10 km 6000 60.00 60.00 9.00 69
Site Roads
Construct major new roads 1.1 km 6000 6.60 6.60 0.99 8
Construct minor new roads 2.2 km 3000 6.60 6.60 0.99 8
Misc. minor improvements 1 km 1,000 1.00 1.00 0.15 1
Drill and equip. monitior wells 2 ea. 8000 16.00 16.00 2.40 18
Mine engineering software 1 lot 30,000 30.00 4.50 35
Drafting software 1 lot 5,000 5.00 0.75 6
Spare parts inventory 1 lot 1.0 47 9,505 9.51 0.05 40.0 5.31 0.21 - 0.21 1.46 11
Buy-out of landowner's royalty 1 LS 200000 200.00 200.00 200
Permitting completion 1 LS 20000 20.00 20.00 3.00 23
Relocation
Land acquisition 16 lots 1000 16.00 16.00 2.40 18
Construct houses ( 90 m2/house) 16 ea. 17200 275.20 275.20 41.28 316
Septic systems 16 ea. 1200 19.20 19.20 2.88 22
Community water supply system 1 ea. 19000 19.00 19.00 2.85 22
SUBTOTAL DIRECT CAPITAL COSTS 3,688 378 144 5,488 5,632 696 - 10,394
TABLE 9-5
YEAR 1 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
MINE EQUIPMENT
Equipment
Major Equip. Purchase (used) 1 LS 1115000 1115 1,115.00 1,115
Major Equip. Refurbishment 1 LS 65000 65 65.00 65
Service Equipment 1 LS 32000 32 32.00 32
Major Equip. Assembly 1 LS 2900 2.9 2.90 0.4 3
Transportation to Site
Denver to Nogales 1 LS 147.6 30.59 31
Nogales to Site 1 LS 266.0 50.81 7.6 58
Contingency (applied only to equip. & refurb.) 10% - - - 121.20 121.20 - - 121.20
MINE DEVELOPMENT
General Mine Development
Mine Dewatering & Sediment Control 1 lot 41697 41.70 41.70 6.25 48
Haul Road Construction 1 lot 10000 10.00 10.00 1.50 12
INFRASTRUCTURE
Livestock fence: Samaniego area 2,800 m - - - 6.28 17.58 17.58 2.64 20
Contingency 10% - - - 1.76 1.76 0.26 - 2
SUBTOTAL INFRASTRUCTURE - - - 19 19 3 - 22
TABLE 9-5
YEAR 1 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
Piping
Heap leach pad system general
Ore drainage solution collection
Perforated pipe, 100mm 1,900 m 0.9 306 1.18 2.24 0.26 0.02 5.31 0.20 0.02 1.75 0.07 0.27 0.04 3
Other
Heap leach pad system general
Liner contractor mob/demob 1 LS 2,000 2.00 2.00 0.30 2
Lining, 60 mil LLDPE smooth 35,500 m2 57.9 205 2.25 79.88 11.87 0.60 21.30 21.30 3.20 116
Geofabric Clay Liner 17,750 m2 117.0 264 2.80 49.70 30.89 1.07 18.99 18.99 2.85 102
EPCM 1 LS 17600 17.60 17.60 2.64 20
TABLE 9-6
YEAR 2 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's $1,000's 1,000's
MINE DEVELOPMENT
General Mine Development
Mine Dewatering & Sediment Control 1 lot 11407 11.41 11.41 1.71 13
Piping
Heap leach pad system general
Ore drainage solution collection
Perforated pipe, 100mm 8,500 m 3.8 306 1.18 10.03 1.16 0.02 5.31 0.90 0.02 1.75 0.30 1.20 0.18 13
Perforated N-12 pipe, 300mm 680 m 3.2 306 12.95 8.81 0.98 0.04 5.31 0.14 0.04 1.75 0.05 0.19 0.03 10
Solid N-12 pipe, 300mm 240 m 1.1 306 12.95 3.11 0.34 0.04 5.31 0.05 0.04 1.75 0.02 0.07 0.01 4
Other
Heap leach pad system general
Liner contractor mob/demob 1 LS 2,000 2.00 2.00 0.30 2
Lining, 60 mil LLDPE smooth 73,000 m2 119.0 205 2.25 164.25 24.40 0.60 43.80 43.80 6.57 239
Geofabric Clay Liner 36,500 m2 241.0 264 2.80 102.20 63.62 1.07 39.06 39.06 5.86 211
EPCM 1 LS 24600 24.60 24.60 3.69 28
TABLE 9-6
YEAR 2 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's $1,000's 1,000's
Equipment
Excess solution evaporator 1 ea. 0.8 306 17,500 17.50 0.24 20 5.31 0.11 20 1.75 0.04 0.14 0.02 18
Excess soln evaporator feed pump 1 ea. 0.2 306 4,500 4.50 0.06 20 5.31 0.11 20 5.31 0.11 0.21 0.03 5
Piping
Heap irrigation system
Sprinkler header pipe, 75 mm ymp 244 m 0.5 47 5.57 1.36 0.02 5.31 5.31 - - 0.21 2
Sprinkler distrib. pipe, 50 mm ymp 3,840 m 3.9 47 3.08 11.83 0.19 5.31 5.31 - - 1.80 14
Wobbler sprinklers 650 m 0.2 47 3.96 2.57 0.01 5.31 5.31 - - 0.39 3
TABLE 9-7
YEAR 3 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's 1,000's
MINE EQUIPMENT
Equipment
Major Equip. Purchase (used) 1 LS 161000 161 161.00 161
Major Equip. Refurbishment 1 LS 10000 10 10.00 10
Transportation to Site
Denver to Nogales 1 LS 39.2 115 4.51 5
Nogales to Site 1 LS 39.2 191 7.49 1.1 9
Contingency (applied only to equip. & refurb.) 10% - - - 17.10 17.10 - - 17.10
MINE DEVELOPMENT
General Mine Development
Mine Dewatering & Sediment Control 1 lot 41280 41.28 41.28 6.19 47
TABLE 9-8
YEAR 4 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's $1,000's 1,000's
MINE EQUIPMENT
Equipment
Major Equip. Purchase (used) 1 LS 161000 161 161.00 161
Major Equip. Refurbishment 1 LS 10000 10 10.00 10
Transportation to Site
Denver to Nogales 1 LS 39.2 115 4.51 5
Nogales to Site 1 LS 39.2 191 7.49 1.1 9
Replacement Capital 1 LS 454250 454.25 454.25 454
Contingency (applied only to equip. & refurb.) 10% - - - 17.10 17.10 - - 17.10
MINE DEVELOPMENT
General Mine Development
Mine Dewatering & Sediment Control 1 lot 46556 46.56 46.56 6.98 54
Haulroad Construction 1 lot 55000 55.00 55.00 8.25 63
INFRASTRUCTURE
Livestock fence: Sagrado Corazon area 1,400 m - 6.28 8.79 8.79 1.32 10
Contingency 10% - - - 0.88 0.88 0.13 - 1
SUBTOTAL INFRASTRUCTURE - - - 10 10 1 - 11
TABLE 9-9
YEAR 5 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's $1,000's 1,000's
MINE EQUIPMENT
Equipment
Major Equip. Purchase (used) 1 LS 322000 322 322.00 322
Major Equip. Refurbishment 1 LS 20000 20 20.00 20
Transportation to Site
Denver to Nogales 1 LS 78.4 115 9.02 9
Nogales to Site 1 LS 78.4 191 14.97 2.2 17
Contingency (applied only to equip. & refurb.) 10% - - - 34.20 34.20 - - 34.20
MINE DEVELOPMENT
General Mine Development
Mine Dewatering & Sedimentation Control 1 lot 1900 1.90 1.90 0.29 2
Haul Road construction 1 lot 60000 60.00 60.00 9.00 69
TABLE 9-10
YEAR 6 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's $1,000's 1,000's
MINE DEVELOPMENT
General Mine Development
Mine Dewatering & Sediment Control 1 lot 42635 42.64 42.64 6.40 49
Haul Road Construction 1 lot - - - -
INFRASTRUCTURE
Livestock fence: Lupita area 3,200 m - - - 6.28 20.10 20.10 3.01 23
Contingency 10% - - - 2.01 2.01 0.30 - 2
SUBTOTAL INFRASTRUCTURE - - - 22 22 3 - 25
TABLE 9-11
YEAR 7 CAPITAL COSTS
Freight Equipment/Materials Installation IVA Duties TOTAL
FACILITY Labor Equipment
Category Weight $ per Total Freight Hrs per Total Hrs per Total Total US$
Description Quant. Units Tonnes Tonne $/Unit $1,000's $1,000's Unit $/Hr. $1,000's Unit $/Hr. $/Unit $1,000's $1,000's $1000's $1,000's 1,000's
MINE DEVELOPMENT
General Mine Development
Mine Dewatering & Sediment Control 1 lot 4499 4.50 4.50 0.67 5
Haul Road Construction 1 lot - - - -
TOTAL INSTALLATION Tank Width Tank Tank Total Dynamic Installed Attached Atttached Load % KWH
Description Quantity Capacity Diameter (m) Height/Lift (m) Length (m) Head (m) Horsepower Power (Hp) Power (KW) Factor, % Availability per Year
CRUSHING & SCREENING
Vibrating Grizzly Feeder (1.1m x 5.8m) -100 mm Openings 1 450 tph 1.10 1.40 5.80 25.0 25.0 18.6 80.0% 68.0% 50,187
Primary Jaw Crusher 1 250 tph 2.47 2.80 2.56 150.0 150.0 111.9 60.0% 68.0% 226,450
Primary Crusher Discharge Conveyor 1 400 tph 0.91 0.50 6.00 5.0 5.0 3.7 80.0% 68.0% 10,064
Screen Feed Conveyor 1 816 tph 0.91 6.00 21.00 25.0 25.0 18.7 80.0% 68.0% 50,322
Self-Cleaning Magnet 1 1.80 2.80 3.0 3.0 2.2 80.0% 68.0% 6,039
Secondary Vibrating Screen 1 400 tph 2.50 1.50 6.00 40.0 40.0 29.8 80.0% 68.0% 80,515
Under Screen Conveyor 1 462 tph 0.91 0.00 6.50 5.0 5.0 3.7 80.0% 68.0% 10,064
Secondary Cone Feed Conveyor 1 362 tph 0.76 3.50 16.00 10.0 10.0 7.5 80.0% 68.0% 20,129
Secondary Cone Crusher ( 25mm C.S.S.) 1 300 tph 1.54 3.00 300.0 300.0 223.8 80.0% 68.0% 603,866
Under Cone Conveyor 1 544 tph 0.91 1.00 10.75 7.5 7.5 5.6 80.0% 68.0% 15,097
Screen Return Conveyor 1 544 tph 0.76 4.00 17.00 15.0 15.0 11.2 80.0% 68.0% 30,193
Final Product Conveyor 1 453 tph 0.76 19.00 61.00 40.0 40.0 29.8 80.0% 68.0% 80,515
Screen to Tertiary Cone Conveyor 1 362 tph 0.76 3.50 16.00 10.0 10.0 7.5 80.0% 68.0% 20,129
Tertiary Cone (12.5 mm C.S.S.) 1 190 tph 1.54 3.00 300.0 300.0 223.8 80.0% 68.0% 603,866
Tertiary Cone to Product Conveyor 1 190 tph 0.76 1.50 15.00 5.0 5.0 3.7 80.0% 68.0% 10,064
Crusher Air Compressor 1 25 cfm 7.5 7.5 5.6 80.0% 33.0% 7,326
Metal Detector 1 - - 0.0% 0.0% 0
Lime Silo (w/ Baghouse) 1 69 tonne 3.08 6.16 1.0 1.0 0.7 80.0% 68.0% 2,013
Lime Silo Rotary Feeder 1 70 kg/min 2.0 2.0 1.5 80.0% 68.0% 4,026
Sampler 1 10.0 10.0 7.5 80.0% 68.0% 20,129
Belt Scale 1 - - -
SUBTOTAL - CRUSHING & SCREENING 936.0 698.3 1,850,996
KWH/tonne ore 1.85
PROCESSING
Pregnant Solution Pump 1 188 m3/hr 33.50 40.0 40.0 29.8 85.0% 93.0% 206,635
Pregnant Solution Pump Mount & Slide 1 0
Primary Leach Feed Pump 1 155 m3/hr 107.00 100.0 100.0 74.6 85.0% 93.0% 516,589
Primary Leach Feed Pump Mount & Slide 1 0
Antiscalant Metering Pump 3 0.88 m3/hr 0.3 0.8 0.6 85.0% 93.0% 3,874
Primary Leach Solution Flowmeter 1 150 mm - - - 0
Excess Pond Distribution Pump 1 155 m3/hr 30.50 30.00 30.0 22.4 85.0% 5.0% 8,332
Excess Pond Distribution Pump Mount & Slide 1 0
Excess Solution Flowmeter 1 150 mm - - - 0
Excess Solution Evaporator Feed Pump 1 21.5 m3/hr 144 30.00 30.0 22.4 85.0% 0.0% 0
Excess Solution Evaporator 1 9.4 m3/hr 2.1 3.25 2.1 40.00 40.0 29.8 85.0% 0.0% 0
Acid Mix Tank 1 2.0 m3 1.36 1.66 0
NaCN Mix Tank 1 5.8 m3 1.8 2.3 0
NaOH Mix Tank 1 0.5 m3 0.79 1.22 0
New Carbon Attrition Tank 1 0.5 tonne 1.25 2.25 0
NaCN Mix Agitator 1 350 rpm 0.8 0.8 0.6 85.0% 93.0% 3,874
NaOH Mix Agitator 1 1750 rpm 0.5 0.5 0.4 85.0% 93.0% 2,583
Carbon Attrition Tank Agitator 1 1500 rpm 3.0 3.0 2.2 85.0% 8.0% 1,333
Plant Air Compressor 1 17.1 cfm 5.0 5.0 3.7 85.0% 40.0% 11,109
Reagent Area Jib Crane 1 2 tonne 3.0 3.0 2.2 85.0% 17.0% 2,833
NaCN Addition Pump 2 288 l/hr 15.00 1.0 2.0 1.5 85.0% 93.0% 10,332
NaOH Addition Pump 1 30 l/hr 5.00 0.3 0.3 0.2 85.0% 17.0% 236
Acid Addition Barrel Pump 1 0.45 m3/hr 0.3 0.3 0.2 85.0% 5.0% 69
Carbon Safety Screen 1 198 m3/hr 1.5 1.77 1.00 0
Barren Solution Tank 1 38.5 m3 3.66 4.12 0
Carbon Adsorption Column 5 1.4 tonnes 1.75 2.29 0
Pregnant Solution Sampler 1 - - - 0
Barren Solution Sampler 1 - - - 0
Intermediate Leach Feed Pump 1 154 m3/hr 98.00 100.0 100.0 74.6 75.0% 93.0% 455,813
Adsorption Area Sump Pump 1 20 m3/hr 9.00 3.0 3.0 2.2 85.0% 17.0% 2,833
Pregnant Solution Flowmeter 1 - - - 0
Intermediate Leach Flowmeter 1 - - - 0
TOTAL INSTALLATION Tank Width Tank Tank Total Dynamic Installed Attached Atttached Load % KWH
Description Quantity Capacity Diameter (m) Height/Lift (m) Length (m) Head (m) Horsepower Power (Hp) Power (KW) Factor, % Availability per Year
Eluant Storage Tank 1 7.9 m3 2.00 2.50 0
Elution Column 1 1.4 tonnes 1.08 4.60 0
Solution Heater 1 1.0MM BTU/hr 0
Solution Heater Recirculation Pump 1 5.0 5.0 3.7 85.0% 50.0% 13,887
Eluate Recovery Heat Exchanger 1 18 plates 0
Eluant Heat Exchanger 1 38 plates 0
Eluate Secondary Water Heat Exchanger 1 12 plates 0
Eluate Solution Sampler 1 - - - 0
Eluant Solution Sampler 1 - - - 0
Back Pressure Valve 1 0
Eluant Pump 1 6.1 m3/hr 57.00 7.5 7.5 5.6 85.0% 67.0% 27,912
Chemical Feed System with Metering Pump 1 115 liter 0.3 0.3 0.2 85.0% 93.0% 1,550
Electrowinning Cell 2 1.3 m3 1.06 1.06 1.16 0
Electrowinning Cell Ventilation Hood and Fan/blower 2 950 cfm 0.5 1.0 0.7 85.0% 93.0% 5,166
Rectifier 2 0-1500 amp 6.0 12.0 9.0 85.0% 93.0% 61,991
Electrowinning Pregnant Eluate Sampler 1 - - - 0
Electrowinning Barren Eluant Sampler 1 - - - 0
Electrowinning Area Sump Pump 1 9.1 m3/hr 4.90 1.0 1.0 0.7 85.0% 93.0% 5,166
Electowinning Cell Magnetic Flowmeter 1 - - - 0
Acid Wash Tank 1 1.5 tonnes 1.32 2.64 0
Acid Wash Tank Recirculation Pump 1 6 m3/hr 3.20 2.0 2.0 1.5 85.0% 25.0% 2,777
Kiln Dewatering Screen 1 1.22 2.50 2.5 1.9 85.0% 8.0% 1,111
Carbon Regeneration Kiln Feed Hopper/Pre-Dryer 1 2.0 tonne 1.59 1.59 1.59 25.00 25.0 18.7 85.0% 67.0% 93,041
Carbon Regeneration Kiln 1 25 kg/hr 24.00 24.0 17.9 85.0% 67.0% 89,320
Quench Tank 1 2.0 tonne 2.20 1.40 1.40 0
Carbon Regeneration Area Sump Pump 1 9 m3/hr 4.60 1.00 1.0 0.7 85.0% 17.0% 944
Carbon Fines Screen 1 1.22 2.50 2.5 1.9 85.0% 8.0% 1,111
Carbon Fines Filter Press 1 23 Plates 1.30 1.80 2.00 - - - 0
Carbon Fines Storage Tank 1 8 m3 1.70 3.60 0
Carbon Storage Tank 1 2.0 tonnes 1.80 2.61 0
Carbon Transfer Jib Crane 1 2 tonne 3.00 3.0 2.2 85.0% 8.0% 1,333
Carbon Transfer Pump 3 65 m3/hr 15.00 5.00 15.0 11.2 85.0% 8.0% 6,666
Carbon Fines Press Feed Pump 1 25 m3/hr 76.00 20.00 20.0 14.9 85.0% 17.0% 18,886
Carbon Handling Area Sump Pump 1 9 m3/hr 4.80 1.00 1.0 0.7 85.0% 8.0% 444
Smelting Furnace 1 660 kg red brass 0
Spray Water Recirculation Tank 1 1.5 m3 1.32 1.52 0.75 - - - 0
Furnace Scrubber Blower 1 141.5 m3/min 7.5 7.5 5.6 85.0% 8.0% 3,333
Smelting Furnace Burner/Blower 1 0.8MM BTU/hr 0.5 0.5 0.4 85.0% 8.0% 222
Furnace Scrubber Recirculation Pump 1 12 m3/hr 2.0 2.0 1.5 85.0% 8.0% 889
Fresh Water Well Pump 1 41 m3/hr 174.00 40.0 40.0 29.8 85.0% 88.0% 195,526
Fresh Water Distribution Pump 1 40 m3/hr 32.00 7.5 7.5 5.6 85.0% 68.0% 28,329
SUBTOTAL - PROCESSING 538.8 401.9 1,786,051
KWH/tonne ore 1.79
TOTAL INSTALLATION Tank Width Tank Tank Total Dynamic Installed Attached Atttached Load % KWH
Description Quantity Capacity Diameter (m) Height/Lift (m) Length (m) Head (m) Horsepower Power (Hp) Power (KW) Factor, % Availability per Year
MISCELLANEOUS
Crusher/ADR/Pond Area Lighting 1 lot 40.0 40.0 29.8 85.0% 50.0% 111,094
Assay Lab 1 lot 80.0 80.0 59.7 85.0% 67.0% 252,869
Administration Offices 1 lot 40.0 40.0 29.8 85.0% 50.0% 94,354
Warehouse 1 lot 20.0 20.0 14.9 85.0% 67.0% 63,217
Truck Shop 1 lot 70.0 70.0 52.2 85.0% 67.0% 221,260
SUBTOTAL - MISCELLANEOUS 250.0 186.5 742,795
KWH/tonne ore 0.74
Engineering
Procurement
Construction
Mine Development
Crushing
Stacking
Plant
On site
Expenses
KCA Management $ -
Project Manager $ -
Airline 1,000 1,000 $ 2,000 $ 2,000 $ 500 $ 500 $ 500 $ 500 $ 8,000
Personal Vehicle Provided by El Mag $ -
Housing $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 500 $ 7,500
Food $ 450 $ 465 $ 465 $ 420 $ 465 $ 450 $ 465 $ 225 $ 3,405
Hotel 200 200 400 400 $ 1,200
Meals 70 70 $ 140 $ 140 $ 420
Rental Car/Taxi $ -
Misc 45 45 $ 30 $ 20 $ 450 $ 465 $ 465 $ 420 $ 465 $ 450 $ 465 $ 225 $ 3,545
Project Accountant Visit to property to assist with accounting changeover to project $ -
Airline $ 500 $ 500
Personal Vehicle $ -
Housing $ -
Food $ -
Hotel $ 250 $ 250
Meals $ 175 $ 175
Misc $ 75 $ 75
Project Clerk $ -
$ -
Subtotal Expenses 1,315 $ 1,315 $ 2,570 $ 2,560 $ 2,400 $ 2,930 $ 2,430 $ 2,340 $ 1,930 $ 2,400 $ 1,930 $ 950 $ 25,070
5% Miscellaneous 441 $ 1,027 $ 877 $ 1,073 $ 1,085 $ 1,066 $ 941 $ 958 $ 1,149 $ 905 $ 1,149 $ 578 $ 11,248
$ 11,248
Total Costs Management 10,568 $ 22,882 $ 20,988 $ 25,096 $ 25,186 $ 25,311 $ 22,182 $ 22,466 $ 26,050 $ 21,403 $ 26,050 $ 13,089 $ 261,271
$ 261,271
Expenses
Project Engineer $ -
Airline $ 1,000 $ 1,000 $ 500 $ 2,500
Personal Vehicle $ -
Housing $ -
Food $ 90 $ 90
Hotel 400 400 $ 800
Meals 140 140 $ 280
Rental Car/Taxi 200 200 $ 400
Misc 60 60 $ 90 $ 210
Startup Engineer $ -
Airline $ 500 $ 500 $ 1,000
Personal Vehicle $ -
Housing $ -
Food $ 465 $ 450 $ 465 $ 1,380
Hotel $ -
Meals $ -
Rental Car/Taxi $ -
Misc $ 465 $ 450 $ 465 $ 1,380
Geotechnical Engineer $ -
Airline 500 $ 500
Personal Vehicle $ -
Housing $ -
Food $ -
Hotel 750 $ 750
Meals 525 $ 525
Rental Car/Taxi 1,125 $ 1,125
Misc 225.00 $ 225
$ -
Subtotal Expenses 3,125 1,800 1,800 - - - - 680 1,430 1,400 930 $ 11,165
Miscellaneous - - 192 233 233 233 233 425 1,180 963 988 - 4,679
$ 4,679
Total Costs Engineering $ 106,867 $ 95,542 $ 42,703 $ 4,885 $ 4,885 $ 4,885 $ 4,885 $ 9,597 $ 26,220 $ 21,614 $ 21,688 $ - $ 343,770
$ 343,770
Travel $ -
Expenses
Construction Supervisor
Airline $ 500 $ 500 $ 1,000
Vehicle $ -
Housing $ -
Food $ 465 $ 465 $ 420 $ 465 $ 1,815
Hotel $ -
Meals $ -
Rental Car/Taxi $ -
Misc $ 465 $ 465 $ 420 $ 465 $ 450 $ 465 $ 225 $ 2,955
Liner Technician $ -
Airline $ 500 $ 500
Vehicle $ 1,000 $ 1,000
Housing $ -
Food $ 420 $ 420
Hotel $ -
Meals $ -
Rental Car/Taxi $ -
Misc $ 420 $ 420
Geotechnical Engineer $ -
Airline $ 500 $ 500 $ 1,000
Personal Vehicle $ -
Housing $ -
Food $ 233 $ 560 $ 620 $ 1,413
Hotel $ -
Meals $ -
Rental Car/Taxi $ -
Misc $ 233 $ 420 $ 465 $ 1,118
Electrical Supervisor $ -
Airline $ 500 $ 500 $ 1,000
Vehicle $ -
Housing $ -
Food $ 233 $ 420 $ 465 $ 450 $ 465 $ 2,033
Hotel $ -
Meals $ -
Rental Car/Taxi $ -
Misc $ 233 $ 420 $ 465 $ 450 $ 465 $ 2,033
$ -
Subtotal Expenses - $ - $ - $ - $ - $ 1,430 $ 2,860 $ 5,500 $ 3,945 $ 1,350 $ 1,395 $ 225 $ 16,705
Total Costs Construction - $ - $ - $ - $ - $ 18,170 $ 42,850 $ 60,520 $ 50,910 $ 14,850 $ 15,345 $ 225 $ 202,870
Mine Engineering
Engineering $ 10,400 $ 10,400
Procurement $ -
Construction Mgmnt $ 10,400 $ 10,400
Startup $ 10,400 $ 10,400
Total $ - $ - $ - $ - $ 20,800 $ 10,400 $ - $ - $ - $ - $ - $ - $ 31,200
Expenses
Airline $ 500 $ 500
Vehicle $ -
Housing $ -
Food $ 420 $ 240 $ 660
Hotel $ -
Meals $ -
Rental Car/Taxi $ -
Misc $ 420 $ 210 $ 630
Total Expenses $ - $ - $ - $ - $ 1,340 $ 450 $ - $ - $ - $ - $ - $ - $ 1,790
Professional Services $ 112,995 $ 121,639 $ 65,500 $ 33,751 $ 54,651 $ 58,336 $ 64,627 $ 84,064 $ 95,875 $ 52,717 $ 58,828 $ 12,139 $ 815,122
Expenses $ 4,440 $ 3,115 $ 4,370 $ 2,560 $ 3,740 $ 4,810 $ 5,290 $ 8,520 $ 7,305 $ 5,150 $ 4,255 $ 1,175 $ 54,730
Subtotal $ 117,435 $ 124,754 $ 69,870 $ 36,311 $ 58,391 $ 63,146 $ 69,917 $ 92,584 $ 103,180 $ 57,867 $ 63,083 $ 13,314 $ 869,852
Contingency 10% $ 11,743 $ 12,475 $ 6,987 $ 3,631 $ 5,839 $ 6,315 $ 6,992 $ 9,258 $ 10,318 $ 5,787 $ 6,308 $ 1,331 $ 86,985
Total before IVA $ 129,178 $ 137,229 $ 76,858 $ 39,942 $ 64,230 $ 69,461 $ 76,909 $ 101,842 $ 113,498 $ 63,654 $ 69,391 $ 14,646 $ 956,837
IVA 0% $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Estimated Cost $ 129,178 $ 137,229 $ 76,858 $ 39,942 $ 64,230 $ 69,461 $ 76,909 $ 101,842 $ 113,498 $ 63,654 $ 69,391 $ 14,646 $ 956,837
Crushing
Engineering, Criteria and Specifications 8 8 16 16 4 2 8 62 $ 5,456 $ - $ - $ 5,456 -
General layout 1 8 1 4 1 1 1 16 8 $ 1,408 $ 459 $ 102 $ 1,969 $ 1,969 1
Primary crusher layout 1 1 1 1 1 2 1 7 2 $ 616 $ 115 $ 26 $ 756 $ 756 1
Sec/Ter crusher layout 1 1 1 1 1 1 5 2 $ 440 $ 115 $ 26 $ 580 $ 580 1
Screening layout 1 1 1 1 1 1 5 2 $ 440 $ 115 $ 26 $ 580 $ 580 1
Conveying layout 1 1 1 1 1 1 5 6 $ 440 $ 344 $ 77 $ 861 $ 861 1
Primary crusher sections 1 1 1 2 1 1 2 1 9 2 $ 792 $ 115 $ 26 $ 932 $ 932 1
Sec/Ter crusher sections 1 1 1 2 1 1 1 7 2 $ 616 $ 115 $ 26 $ 756 $ 756 1
Screening sections 1 1 1 2 1 1 1 7 2 $ 616 $ 115 $ 26 $ 756 $ 756 1
Conveying sections 2 1 1 2 1 1 1 7 12 $ 616 $ 688 $ 153 $ 1,457 $ 729 2
Primary crusher P&ID 1 2 1 4 2 1 10 8 $ 880 $ 459 $ 102 $ 1,441 $ 1,441 1
Sec/Ter crusher P&ID 1 2 1 4 2 1 10 8 $ 880 $ 459 $ 102 $ 1,441 $ 1,441 1
Screening P&ID 1 2 1 4 2 1 10 8 $ 880 $ 459 $ 102 $ 1,441 $ 1,441 1
Conveying P&ID 1 2 1 4 2 2 11 8 $ 968 $ 459 $ 102 $ 1,529 $ 1,529 1
Primary crusher electrical 1 1 1 4 1 7 8 $ 616 $ 459 $ 102 $ 1,177 $ 1,177 1
Sec/Ter crusher electrical 1 1 1 4 1 7 8 $ 616 $ 459 $ 102 $ 1,177 $ 1,177 1
Screening electrical 1 1 1 4 1 7 8 $ 616 $ 459 $ 102 $ 1,177 $ 1,177 1
Conveying electrical 1 1 1 4 1 7 8 $ 616 $ 459 $ 102 $ 1,177 $ 1,177 1
Earthwork 2 2 2 2 4 1 1 2 14 8 $ 1,232 $ 459 $ 102 $ 1,793 $ 896 2
Concrete 1 2 4 1 1 8 6 $ 704 $ 344 $ 77 $ 1,125 $ 1,125 1
Sampling tower details 1 3 2 - 1 1 7 8 $ 616 $ 459 $ 102 $ 1,177 $ 1,177 1
Miscellaneous 2 4 4 2 2 2 1 4 19 16 $ 1,672 $ 917 $ 204 $ 2,793 $ 1,397 2
Subtotal 24 45 31 32 38 49 18 34 247 140 $ 21,736 $ 8,027 $ 1,785 $ 31,548 24
Man-Days $ 31 $ 18
Solution Handling and Application
Engineering, Criteria and Specifications 12 2 2 2 4 2 24 $ 2,112 $ - $ - $ 2,112 -
General layout 1 4 1 1 1 2 1 10 12 $ 880 $ 688 $ 153 $ 1,721 $ 1,721 1
Piping layout 1 1 4 2 7 6 $ 616 $ 344 $ 77 $ 1,037 $ 1,037 1
Pumping P&ID 1 2 1 2 4 2 11 12 $ 968 $ 688 $ 153 $ 1,809 $ 1,809 1
Heap P&ID 1 4 1 - 4 1 10 8 $ 880 $ 459 $ 102 $ 1,441 $ 1,441 1
Earthwork 1 2 2 6 $ 176 $ 344 $ 77 $ 597 $ 597 1
Concrete 1 - - - 4 1 1 6 6 $ 528 $ 344 $ 77 $ 949 $ 949 1
Electrical 1 1 - 1 8 1 11 8 $ 968 $ 459 $ 102 $ 1,529 $ 1,529 1
Pump slide structural 1 1 1 1 4 1 8 8 $ 704 $ 459 $ 102 $ 1,265 $ 1,265 1
Miscellaneous 1 8 8 12 $ 704 $ 688 $ 153 $ 1,545 $ 1,545 1
Subtotal 9 25 6 1 10 13 23 19 97 78 $ 8,536 $ 4,472 $ 995 $ 14,003 9
Man-Days $ 12 $ 10
31 31 30 31 30 31 31 28 31 30 31 Total
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Cost
HIRING SCHEDULE
Salary
ADMINISTRATION w/o Benefits
GENERAL MANAGER 1.00 $ 100,000 100% 100% 100% 100% 100% 100% 100% 100% 100%
CONTROLLER 1.00 $ 26,000 100% 100% 100% 100%
CLERK 1.00 $ 3,944 50% 100% 100% 100%
MANAGER, HUMAN RESOURCES 1.00 $ 22,000 100% 100% 100% 100%
RECEPTIONIST 1.00 $ 3,633 50% 100% 100% 100%
INTERPRETERS/TRANSLATOR - $ -
SECURITY SUPERVISOR 1.00 $ 12,000 100% 100% 100% 100% 100%
SECURITY TECHNICIANS 4.00 $ 3,011 100% 100% 100% 100% 100%
MEDICAL TECHNICIAN 1.00 $ 3,944 50% 100% 100% 100%
MANAGER, HEALTH, SAFETY, ENVIRONMENT
1.00 $ 26,000 100% 100% 100% 100% 100% 100% 100% 100% 100%
HSE TECHNICIAN 1.00 $ 3,633 100% 100% 100%
MANGER, MATERIALS 1.00 $ 15,000 100% 100% 100% 100% 100%
PURCHASING/TRAFFIC AGENT 1.00 $ 4,256 100% 100% 100% 100%
CLERK/EXPEDITER - $ - 100% 100%
WAREHOUSEMAN 4.00 $ 3,633 100% 100% 100% 100% 100%
SITE SUPERVISOR - $ -
ELECTRICIAN - $ -
MECHANIC - $ -
CARPENTER - $ -
UTILITY - $ -
LABORER - $ -
19 2.00 2.00 2.00 2.00 12.00 16.50 19.00 19.00 19.00 - -
31 31 30 31 30 31 31 28 31 30 31 Total
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Cost
Salary
MINING w/o Benefits
MANAGER, MINING 1 $ 42,000 100% 100% 100% 100%
GEOLOGIST 1 $ 26,000 100% 100%
ORE CONTROL/SAMPLER 2 $ 4,567 100%
MINING ENGINEER 1 $ 26,000 100% 100% 100%
ENGINEERING TECHNICIAN 1 $ 4,567 100%
SURVEYOR 1 $ 15,000 100% 100%
SURVEY ASST 1 $ 3,011 100% 100%
MINE OPERATIONS SUPERINTENDENT 1 $ 36,000 100%
MINE OPERATIONS SUPERVISOR 4 $ 15,000 100%
DRILLER/BLASTER 11 $ 5,500
LOADER OPERATOR 6 $ 5,500
HAUL TRUCK OPERATOR 9 $ 4,256
DOZER OPERATOR 6 $ 4,567
GRADER OPERATOR 1 $ 4,567
WATER TRUCK OPERATOR 1 $ 3,944
UTILITY OPERATOR 2 $ 3,633
BLASTING CREW 5 $ 3,011
MAINTENANCE SUPERINTENDENT 1 $ 36,000 100%
MINE MAINTENANCE SUPERVISOR 3 $ 15,000 100%
TIREMAN 1 $ 4,567
WELDER 1 $ 5,189
LUBEMAN 3 $ 4,256
MECHANIC 14 $ 5,189
ELECTRICIAN 1 $ 5,500
LABORER 3 $ 2,700
81 - - 1.00 2.00 5.00 - - - 16.00 - -
Salary
PROCESSING w/o Benefits
MANAGER, PROCESS 1 $ 42,000 100% 100% 100% 100% 100% 100%
METALLURGIST 0 $ 21,000
MET TECH 0 $ 4,567
CHEMIST 1 $ 21,000 100% 100% 100% 100%
ASSAYER 1 $ 4,878 100% 100% 100% 100%
SAMPLE PREPARATION 2 $ 3,633 100% 100% 100% 100%
LABORER 1 $ 2,700
PROCESS SUPERVISOR 4 $ 15,000
LOADER OPERATOR 0 $ 4,878
CRUSHER OPERATOR 2 $ 5,189
CRUSHER HELPER 2 $ 3,944
LEACH OPERATOR 0 $ 4,878 50%
PLANT OPERATOR 0 $ 5,189 50%
REFINERY OPERATOR 0 $ - 50%
UTILITY OPERATOR 2 $ 3,322 50%
LABORER 1 $ 2,700
MAINTENANCE SUPERINTENDENT 1 $ 26,000 100% 100% 100%
MAINTENANCE SUPERVISOR 1 $ 15,000
ELECT/INSTR 1 $ 5,500
WELDER 0 $ 5,189
SHIFT MECHANIC 0 $ 5,189
MECHANIC/WELDER 1 $ 5,189 33%
LABORER 1 $ 2,700
22 - - - 1.00 1.00 5.00 6.00 6.00 7.33 - -
31 31 30 31 30 31 31 28 31 30 31 Total
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Cost
Salary
ADMINISTRATION w/o Benefits
GENERAL MANAGER $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ 8,333 $ - $ - $ 75,000
CONTROLLER $ - $ - $ - $ - $ - $ 2,167 $ 2,167 $ 2,167 $ 2,167 $ - $ - $ 8,667
CLERK $ - $ - $ - $ - $ - $ 164 $ 329 $ 329 $ 329 $ - $ - $ 1,150
MANAGER, HUMAN RESOURCES $ - $ - $ - $ - $ - $ 1,833 $ 1,833 $ 1,833 $ 1,833 $ - $ - $ 7,333
RECEPTIONIST $ - $ - $ - $ - $ - $ 151 $ 303 $ 303 $ 303 $ - $ - $ 1,060
INTERPRETERS/TRANSLATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
SECURITY SUPERVISOR $ - $ - $ - $ - $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ - $ - $ 5,000
SECURITY TECHNICIANS $ - $ - $ - $ - $ 1,004 $ 1,004 $ 1,004 $ 1,004 $ 1,004 $ - $ - $ 5,019
MEDICAL TECHNICIAN $ - $ - $ - $ - $ - $ 164 $ 329 $ 329 $ 329 $ - $ - $ 1,150
MANAGER, HEALTH, SAFETY, ENVIRONMENT $ 2,167 $ 2,167 $ 2,167 $ 2,167 $ 2,167 $ 2,167 $ 2,167 $ 2,167 $ 2,167 $ - $ - $ 19,500
HSE TECHNICIAN $ - $ - $ - $ - $ - $ - $ 303 $ 303 $ 303 $ - $ - $ 908
MANGER, MATERIALS $ - $ - $ - $ - $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ - $ - $ 6,250
PURCHASING/TRAFFIC AGENT $ - $ - $ - $ - $ - $ 355 $ 355 $ 355 $ 355 $ - $ - $ 1,419
CLERK/EXPEDITER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
WAREHOUSEMAN $ - $ - $ - $ - $ 1,211 $ 1,211 $ 1,211 $ 1,211 $ 1,211 $ - $ - $ 6,056
SITE SUPERVISOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
ELECTRICIAN $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
MECHANIC $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
CARPENTER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
UTILITY $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
LABORER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - -
$ 10,500 $ 10,500 $ 10,500 $ 10,500 $ 14,965 $ 19,800 $ 20,582 $ 20,582 $ 20,582 $ - $ - $ 138,512
Salary $ 138,512
MINING w/o Benefits
MANAGER, MINING $ - $ - $ 3,500 $ 3,500 $ 3,500 $ - $ - $ - $ 3,500 $ - $ - $ 14,000
GEOLOGIST $ - $ - $ - $ - $ 2,167 $ - $ - $ - $ 2,167 $ - $ - $ 4,333
ORE CONTROL/SAMPLER $ - $ - $ - $ - $ - $ - $ - $ - $ 761 $ - $ - $ 761
MINING ENGINEER $ - $ - $ - $ 2,167 $ 2,167 $ - $ - $ - $ 2,167 $ - $ - $ 6,500
ENGINEERING TECHNICIAN $ - $ - $ - $ - $ - $ - $ - $ - $ 381 $ - $ - $ 381
SURVEYOR $ - $ - $ - $ - $ 1,250 $ - $ - $ - $ 1,250 $ - $ - $ 2,500
SURVEY ASST $ - $ - $ - $ - $ 251 $ - $ - $ - $ 251 $ - $ - $ 502
MINE OPERATIONS SUPERINTENDENT $ - $ - $ - $ - $ - $ - $ - $ - $ 3,000 $ - $ - $ 3,000
MINE OPERATIONS SUPERVISOR $ - $ - $ - $ - $ - $ - $ - $ - $ 5,000 $ - $ - $ 5,000
DRILLER/BLASTER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
LOADER OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
HAUL TRUCK OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
DOZER OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
GRADER OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
WATER TRUCK OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
UTILITY OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
BLASTING CREW $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
MAINTENANCE SUPERINTENDENT $ - $ - $ - $ - $ - $ - $ - $ - $ 3,000 $ - $ - $ 3,000
MINE MAINTENANCE SUPERVISOR $ - $ - $ - $ - $ - $ - $ - $ - $ 3,750 $ - $ - $ 3,750
TIREMAN $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
WELDER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
LUBEMAN $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
MECHANIC $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
ELECTRICIAN $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
LABORER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - -
$ - $ - $ 3,500 $ 5,667 $ 9,334 $ - $ - $ - $ 25,226 $ - $ - $ 43,727
31 31 30 31 30 31 31 28 31 30 31 Total
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Cost
Salary $ 43,727
PROCESSING w/o Benefits
MANAGER, PROCESS $ - $ - $ - $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ - $ - $ 21,000
METALLURGIST $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
MET TECH $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
CHEMIST $ - $ - $ - $ - $ - $ 1,750 $ 1,750 $ 1,750 $ 1,750 $ - $ - $ 7,000
ASSAYER $ - $ - $ - $ - $ - $ 406 $ 406 $ 406 $ 406 $ - $ - $ 1,626
SAMPLE PREPARATION $ - $ - $ - $ - $ - $ 606 $ 606 $ 606 $ 606 $ - $ - $ 2,422
LABORER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
PROCESS SUPERVISOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
LOADER OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
CRUSHER OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
CRUSHER HELPER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
LEACH OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
PLANT OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
REFINERY OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
UTILITY OPERATOR $ - $ - $ - $ - $ - $ - $ - $ - $ 277 $ - $ - $ 277
LABORER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
MAINTENANCE SUPERINTENDENT $ - $ - $ - $ - $ - $ - $ 2,167 $ 2,167 $ 2,167 $ - $ - $ 6,500
MAINTENANCE SUPERVISOR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
ELECT/INSTR $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
WELDER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
SHIFT MECHANIC $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
MECHANIC/WELDER $ - $ - $ - $ - $ - $ - $ - $ - $ 143 $ - $ - $ 143
LABORER $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - -
$ - $ - $ - $ 3,500 $ 3,500 $ 6,262 $ 8,429 $ 8,429 $ 8,848 $ - $ - $ 38,968
$ 38,968
TOTAL WAGES $ 10,500 $ 10,500 $ 14,000 $ 19,667 $ 27,799 $ 26,062 $ 29,011 $ 29,011 $ 54,657 $ - $ - $ 221,206
BENEFITS 44.4% $ 4,657 $ 4,657 $ 6,210 $ 8,723 $ 12,330 $ 11,560 $ 12,868 $ 12,868 $ 24,243 $ - $ - $ 98,116
TOTAL WAGES & BENEFITS $ 15,157 $ 15,157 $ 20,210 $ 28,390 $ 40,129 $ 37,621 $ 41,879 $ 41,879 $ 78,900 $ - $ - $ 319,322
Utilities
Telephone/Mo $ 3,000 $ 500 $ 500 $ 1,000 $ 1,500 $ 2,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 17,500
Potable Water/man-mo $ 7 $ 142 $ 165 $ 165 $ 280 $ 753
Other $ -
Subtotal $ 500 $ 500 $ 1,000 $ 1,500 $ 2,000 $ 3,142 $ 3,165 $ 3,165 $ 3,280 $ - $ - $ 18,253
Employee Expenses
Recruitment/prson $ 10 $ 17 $ 17 $ 25 $ 42 $ 153 $ 182 $ 212 $ 212 $ 359 $ 1,220
Relocation/person $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Medical Exam/person $ 100 $ 170 $ 170 $ 254 $ 424 $ 1,527 $ 1,824 $ 2,121 $ 2,121 $ 3,591 $ 12,200
Drug Tests/person $ 150 $ 254 $ 254 $ 382 $ 636 $ 2,290 $ 2,736 $ 3,181 $ 3,181 $ 5,386 $ 18,300
Termination/person $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other $ - $ -
Subtotal $ 441 $ 441 $ 662 $ 1,103 $ 3,970 $ 4,742 $ 5,513 $ 5,513 $ 9,335 $ - $ - $ 31,720
Salaried
Recruitment/person $ 1,500 $ 1,500 $ 1,500 $ 2,500 $ 6,000 $ 3,000 $ 16,000
Mob/Demob/person $ 1,500 $ 1,500 $ 1,500 $ 2,500 $ 6,000 $ 3,000 $ 16,000
Storage/person/mo $ 292 $ 292 $ 292 $ 292 $ 292 $ 292 $ 292 $ 292 $ 292 $ 292 $ 2,625
Housing/person/mo $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 6,750
Rotation/person/mo $ 333 $ 333 $ 333 $ 333 $ 333 $ 333 $ 333 $ 333 $ 333 $ 333 $ 3,000
Other $ - $ -
Subtotal $ 4,375 $ 4,375 $ 4,375 $ 6,375 $ 13,375 $ 7,375 $ 1,375 $ 1,375 $ 1,375 $ - $ - $ 44,375
31 31 30 31 30 31 31 28 31 30 31 Total
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Cost
Safety
Training Materials/person/mo $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Personal Equipment/person/mop $ 8 $ 17 $ 17 $ 25 $ 42 $ 150 $ 179 $ 208 $ 208 $ 353 $ 1,199
Supplies/person/mo $ 4 $ 8 $ 8 $ 13 $ 21 $ 75 $ 90 $ 104 $ 104 $ 176 $ 599
Awards/peson/mo $ 2 $ 4 $ 4 $ 6 $ 10 $ 38 $ 45 $ 52 $ 52 $ 88 $ 300
Other $ - $ -
Subtotal $ 29 $ 29 $ 44 $ 73 $ 263 $ 314 $ 365 $ 365 $ 617 $ - $ - $ 2,098
Training
Contract Trainers/mo $ -
Vendors/mo $ -
Off Site Training/mo $ -
Other $ -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Development
Memberships & Dues/mo $ -
Seminars & Conventions/mo $ -
Subscriptions/mo $ -
Travel Expenses/mo $ -
Other $ - $ -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Employee Relations
Misc/mo $ 167 $ 167 $ 167 $ 167 $ 167 $ 667
Subtotal $ - $ - $ - $ - $ - $ 167 $ 167 $ 167 $ 167 $ - $ - $ 667
Contract Services
Environmental & Permitting/mo $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 18,750
Legal/mo $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 1,667 $ 15,000
Maintenance Agreements/mo $ 417 $ 417 $ 417 $ 417 $ 417 $ 1,667
Security, Armoured/mo $ 5,200 $ -
Transportation, Bus/mo $ 730 $ 730 $ 730 $ 730 $ 730 $ 2,920
Misc $ - $ -
Subtotal $ 3,750 $ 3,750 $ 3,750 $ 3,750 $ 3,750 $ 4,897 $ 4,897 $ 4,897 $ 4,897 $ - $ - $ 38,337
Leases
Misc Office Equipment/mo $ - $ -
Misc Vehicles & Equipment/mo $ - $ -
Concession/Land/Claims/mo $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 21,972
Rights of Way/mo $ - $ -
Other $ - $ -
Subtotal $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ 2,441 $ - $ - $ 21,972
Rent
Office/Surface rights $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 16,594
Subtotal $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ 1,844 $ - $ - $ 16,594
31 31 30 31 30 31 31 28 31 30 31 Total
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Cost
Insurance
Property/mo $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 10,000
Liability/mo $ - $ -
Dore Shipment/mo $ 2,083 $ -
Other $ - $ -
Subtotal $ - $ - $ - $ - $ - $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ - $ - $ 10,000
Office Expenses
Postage/Courier/mo $ 433 $ 108 $ 108 $ 108 $ 217 $ 217 $ 325 $ 433 $ 433 $ 433 $ 2,383
Supplies/mo $ 1,300 $ 325 $ 325 $ 325 $ 650 $ 650 $ 975 $ 1,300 $ 1,300 $ 1,300 $ 7,150
Software/mo $ 167 $ 42 $ 42 $ 42 $ 83 $ 83 $ 125 $ 167 $ 167 $ 167 $ 917
Other $ - $ -
Subtotal $ 475 $ 475 $ 475 $ 950 $ 950 $ 1,425 $ 1,900 $ 1,900 $ 1,900 $ - $ - $ 10,450
Equipment Purchase
Office/mo $ - $ -
Computers/mo $ - $ -
Other $ - $ -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other Expenses
Donations/mo $ 417 $ 417 $ 417 $ 417 $ 417 $ 1,667
Fees/mo $ - $ -
Other $ - $ -
Subtotal $ - $ - $ - $ - $ - $ 417 $ 417 $ 417 $ 417 $ - $ - $ 1,667
TOTAL OPERATING EXPENSES $ 16,522 $ 16,522 $ 18,590 $ 23,619 $ 37,009 $ 36,262 $ 58,451 $ 57,826 $ 69,265 $ - $ - $ 334,067
WAGES & BENEFITS $ 15,157 $ 15,157 $ 20,210 $ 28,390 $ 40,129 $ 37,621 $ 41,879 $ 41,879 $ 78,900 $ - $ - $ 319,322
OPERATING EXPENSES $ 16,522 $ 16,522 $ 18,590 $ 23,619 $ 37,009 $ 36,262 $ 58,451 $ 57,826 $ 69,265 $ - $ - $ 334,067
SUBTOTAL $ 31,679 $ 31,679 $ 38,800 $ 52,009 $ 77,138 $ 73,884 $ 100,330 $ 99,705 $ 148,165 $ - $ - $ 653,390
CONTINGENCY 10% $ 3,168 $ 3,168 $ 3,880 $ 5,201 $ 7,714 $ 7,388 $ 10,033 $ 9,970 $ 14,816 $ - $ - $ 65,339
SUBTOTAL $ 34,847 $ 34,847 $ 42,680 $ 57,210 $ 84,852 $ 81,272 $ 110,363 $ 109,675 $ 162,981 $ - $ - $ 718,728
IVA 15% 5,227 5,227 6,402 8,581 12,728 12,191 16,554 16,451 24,447 - - 107,809
TOTAL $ 40,074 $ 40,074 $ 49,082 $ 65,791 $ 97,580 $ 93,463 $ 126,917 $ 126,127 $ 187,429 $ - $ - $ 826,538
Table 9-16
Initial Operating Supply Inventory
INITIAL SUPPLY INVENTORY
10.1 Production
The Magistral project is expected to produce 268,500 troy ounces of gold at an average
gold recovery of 72.9%. Based upon an ore reserve of 6,156,000 tonnes, at an average
grade of 1.86 gpt of gold, the ore mining rate was set at a nominal 1,000,000 tonnes per
year, resulting in a mining life of about 6.2 years. Average gold production per year of
mining is about 43,700 troy ounces.
Based upon the mine production schedule and the gold recovery rate curve developed
from process development testing (Figure 10-1), a gold production schedule (Table 10-1)
has been developed using a production model that takes into account the time rate of gold
recovery by ore type, operational requirements for the process (e.g., the time it takes
between the stacking of the ore on the heap and when leaching first begins), heap flow
dynamics (e.g., gold that is held by residual moisture within the heap, the time it takes to
soak the ore, and the time it takes for solution to travel through the heap), and solution
pond inventory.
Gold is not projected to be recovered to doré until late in the second month of ore
stacking. The model is based upon a full month of stacking before leaching of the heap
begins. Following two weeks of leaching, operation of the gold recovery plant will begin,
with first gold production occurring two weeks later.
It is an unusual operation that reaches its design capacity early in its startup. To reflect
this in the operating schedule and project economics, mine production during the first two
months of operation has been derated from full capacity and a startup productivity factor
has been applied to projected gold recovered during the first months of operations
(Column 4 of Table 10-1). This factor assumes 60% productivity in the second month of
operation increasing linearly until 100% has been reached in month six. From that point,
100% productivity is expected. This results in the deferral of a certain amount of
potential gold recovery until the final operating year of the project.
Figure 10 - 1
Magistral Project
Recovery vs Time by Ore Type
80.00%
70.00%
60.00%
Percent Gold Recovery
50.00%
40.00%
Tailings
30.00%
San Rafael
Samaniego
20.00%
Lupita/Sagrado - Corazon
Composite
10.00%
0.00%
0 25 50 75 100 125 150 175 200 225 250
Table 10 - 1
MAGISTRAL FEASIBILITY STUDY
PROJECTED GOLD PRODUCTION SCHEDULE
100% PRODUCTIVITY PRODUCTIVITY ADJUSTED
PERIOD CUM STARTUP PERIOD CUM PERIOD CUM
OZ AU OZ AU PRODUCTIVITY OZ AU OZ AU OZ AG OZ AU PERCENT AU RECOVERY
REC'D REC'D FACTOR REC'D REC'D REC'D STACKED PERIOD CUM
YEAR 1
Month 1 - - 0% - - 4,652 0.0% 0.0%
Month 2 1,683 1,683 60% 1,010 1,010 11,700 14.3% 8.6%
Month 3 3,659 5,342 70% 2,561 3,571 17,339 45.4% 20.6%
Month 4 3,434 8,776 80% 2,747 6,318 21,263 70.0% 29.7%
Month 5 3,800 12,576 90% 3,420 9,738 26,168 69.7% 37.2%
Month 6 2,850 15,426 100% 2,850 12,589 30,092 72.6% 41.8%
Month 7 2,452 17,878 100% 2,452 15,040 34,704 53.2% 43.3%
Month 8 3,619 21,497 100% 3,619 18,660 40,470 62.8% 46.1%
Month 9 3,109 24,606 100% 3,109 21,768 45,082 67.4% 48.3%
Month 10 3,287 27,892 100% 3,287 25,055 51,018 55.4% 49.1%
Month 11 5,032 32,925 100% 5,032 30,087 58,437 67.8% 51.5%
Month 12 4,185 37,109 100% 4,185 34,272 64,372 70.5% 53.2%
YEAR 1 TOTAL 37,109 37,109 92% 34,272 34,272 64,372 53.2% 53.2%
YEAR 2 TOTAL 50,081 87,191 100% 50,081 84,353 129,918 76.4% 64.9%
YEAR 3 TOTAL 37,281 124,472 100% 37,281 121,634 181,952 71.6% 66.8%
YEAR 4 TOTAL 33,850 158,322 100% 33,850 155,484 227,085 75.0% 68.5%
YEAR 5 TOTAL 50,440 208,762 100% 50,440 205,924 307,046 63.1% 67.1%
YEAR 6 TOTAL 41,094 249,856 100% 41,094 247,018 356,465 83.2% 69.3%
YEAR 7 TOTAL 18,637 268,493 100% 21,475 268,493 368,392 180.1% 72.9%
YEAR 8 TOTAL - 100%
The project startup will be eased by the standard nature of the mining and processing
operations and the relatively small size of the project. The location and the potential lack
of experienced operators may slow startup somewhat, but the presence of a seasoned
process manager and a full compliment of professional supervisory personnel will tend to
offset this. Finally, experience in handling and processing of the various ore types will
take some time to gain. Overall, reaching full production capacity within six months
should be achievable.
The operating costs have been estimated and presented without added contingency
allowances based upon the design and operating criteria present in this report. The
processing, general and administrative operating costs are considered to have an accuracy
range of +/-10%. The direct mining operating costs are considered to have an accuracy of
+/-15%.
Operating costs have been based upon information obtained from the following sources:
• Project metallurgical testwork and process engineering;
• A detailed mining plan based upon proven and probable reserves;
• Budgetary quotations from potential suppliers of project operating and
maintenance supplies and materials;
• Mexican business practices and requirements obtained from the
PriceWaterhouseCoopers book entitled "Doing Business in Mexico;"
• Queenstake corporate experience with Mexican mining operations;
• Queenstake insurance and tax data;
• Operating experience from other area mines of a similar nature;
• Recent KCA project file data;
• Recent PAH project file data, and;
• Experience of KCA and PAH staff with other, similar operations.
Where specific data do not exist, cost allowances have been based upon consumption and
operating requirements at other similar properties for which reliable data exist. Freight
costs, where delivered prices are not available, are based upon data provided by both US
and Mexican freight carriers.
The start of the operations phase of the project has been defined as when stacking of ore
in the first lift begins. This occurs approximately two months before the anticipated first
gold production or after nine months of engineering and construction have been
completed. With respect to the start of project Year 0, the start of operations is 10
months into the year.
All costs are presented in United States currency (dollars) as of the second quarter of
2000. The exchange rate used to convert pesos to dollars is 9.42 pesos per dollar, the rate
quoted in the Wall Street Journal on 17 January 2000. All costs presented in this section
do not include IVA (the Mexican value added tax) unless specified.
10.3 Summary
The weighted average operating cost, not including the IVA and rebateable fuel taxes, for
the production of gold at the Magistral Project is $180 per troy ounce of gold, with a low
of $146 in the 2nd operating year and a high of $237 in the 4th operating year. IVA is not
included in the above unit costs because the project will export its product and the taxes
paid for supplies, materials, and services will be refunded.
Table 10-2
Average Unit Operating Costs
Operating Costs
Mining $0.68 per tonne mined
$4.49 per tonne ore
Processing $2.31 per tonne ore
Laboratory $0.24 per tonne ore
Water Supply $0.02 per tonne ore
Administration $0.89 per tonne ore
Total $7.95 per tonne ore
These costs are based upon ownership of all project production equipment and site
facilities. The light vehicles used at the site will be leased. The estimate is based upon
the owner, through a service company, employing and directing all operating,
maintenance, and support personnel.
IVA is charged at a rate of 15% and will be applied against all goods and services used
for the project including salaries and wages. For administrative purposes it is anticipated
that the Magistral project will acquire its salaried and hourly personnel from a service
company, therefore requiring IVA payments. (The service company concept is discussed
in Section 11.4.) Imported equipment, operating supplies, and maintenance supplies will
not be subject to an import duty, but an IVA of 15% will be applied to the value of any
imported items, including freight and other importation costs. The IVA, paid for imports
and domestic services, will be refunded because the project produces a product that is
exported. There is, for all intents and purposes, no value added tax for the project.
Attached in the Appendix of this report are the operating cost estimation spreadsheets
used to develop the costs presented above. The spreadsheets contain the details of
operating cost estimation procedures including the unit consumption of materials and
supplies, the unit costs of materials and supplies, and the cost allowances for items not
subject to unit consumption.
Operating costs for years 2 through 6 are calculated on individual spreadsheets for each
year. Since operating Year 1 consists of three phases, four weeks of mining, crushing and
stacking only, two weeks of mining, crushing, stacking, and leaching, and 46 weeks of
full operation, the operating costs for each phase is calculated separately on an annualized
basis (taking into account the ramp up of solution application) and prorated to produce a
total cost for the year. Similarly, Year 7, the last year of operations, consists of 11.86
weeks of full operation followed by 34.29 weeks of leaching and gold recovery only, so
these costs are estimated separately and also prorated.
Operating costs by year by area, in total dollars and cost per tonne of ore, are presented in
Tables 10-3a and 10-3b below.
Table 10 - 3a
Operating Cost Overview
PRODUCTION DATA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total
Tonnes Ore Mined 923,000 1,021,000 1,009,000 1,005,000 1,007,000 877,000 228,000 6,070,000
Total Tonnes Mined 7,003,000 5,824,000 7,286,000 7,216,000 7,541,000 4,769,000 513,904 40,152,904
Strip Ratio 6.59 4.70 6.22 6.18 6.49 4.44 1.25 5.61
Tonnes Ore Crushed 963,000 1,021,000 1,009,000 1,005,000 1,007,000 877,000 228,000 6,110,000
Oz Gold Recovered 34,272 50,081 37,281 33,850 50,440 41,094 21,475 268,493
Total Revenue $ 10,281,600 $ 15,024,300 $ 11,184,300 $ 10,155,000 $ 15,132,000 $ 12,328,200 $ 6,442,502 $ 80,547,902
Table 10 - 3b
Operating Cost per Tonne of Ore
PRODUCTION DATA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total
Tonnes Ore Mined 923,000 1,021,000 1,009,000 1,005,000 1,007,000 877,000 228,000 6,070,000
Total Tonnes Mined 7,003,000 5,824,000 7,286,000 7,216,000 7,541,000 4,769,000 513,904 40,152,904
Strip Ratio 6.59 4.70 6.22 6.18 6.49 4.44 1.25 5.61
Tonnes Ore Crushed 963,000 1,021,000 1,009,000 1,005,000 1,007,000 877,000 228,000 6,110,000
Oz Gold Recovered 34,272 50,081 37,281 33,850 50,440 41,094 21,475 268,493
Total Revenue $ 10,281,600 $ 15,024,300 $ 11,184,300 $ 10,155,000 $ 15,132,000 $ 12,328,200 $ 6,442,502 $ 80,547,902
Process Management $ 0.45 $ 0.42 $ 0.42 $ 0.42 $ 0.42 $ 0.49 $ 1.32 $ 0.469
Crushing/Stacking $ 0.50 $ 0.50 $ 0.50 $ 0.51 $ 0.52 $ 0.53 $ 0.56 $ 0.511
Leaching $ 1.11 $ 1.20 $ 1.07 $ 0.77 $ 1.09 $ 0.67 $ 1.51 $ 1.011
Recovery $ 0.18 $ 0.23 $ 0.20 $ 0.19 $ 0.23 $ 0.24 $ 0.62 $ 0.227
Smelting & Refining $ 0.07 $ 0.09 $ 0.07 $ 0.06 $ 0.09 $ 0.08 $ 0.17 $ 0.080
Metallurgical Laboratory $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.010
Process Subtotal $ 2.33 $ 2.44 $ 2.27 $ 1.96 $ 2.36 $ 2.02 $ 4.18 $ 2.308
Assay Laboratory $ 0.25 $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.24 $ 0.35 $ 0.240
Water Supply $ 0.01 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.06 $ 0.018
General & Administrative $ 0.86 $ 0.78 $ 0.79 $ 0.79 $ 0.79 $ 0.91 $ 2.84 $ 0.894
Total Project $ 7.89 $ 7.19 $ 7.82 $ 7.97 $ 8.87 $ 7.38 $ 10.04 $ 7.945
The wages and salaries for project personnel were based upon wage and salary
information acquired for two other similar Mexican operations, one in Sonora, the other
in Sinaloa. Rates near the high end were used, especially for the professional personnel,
in an attempt to project the salaries necessary to attract experienced people.
A 44% factor on annual pay has been used to take into account Mexican benefits that are
mandated by law. These include Sunday “bonus day” pay, a 15-day bonus each year,
vacation, social insurance, health insurance, disability insurance, housing contributions,
and a termination provision. The sample benefits rate computation is presented with the
operating cost spreadsheets in the Appendix. A 30% benefits provision has been used for
expatriate employees, in addition to an allocation for housing, rotation home, etc.
Table 10 - 4
Wage/Salary Schedule
Grade Job Description $/Year Grade Job Description $/Day
Salaried Employees Hourly Employees
20 General Manager $ 100,000 10 Driller/Blaster $ 17.58
18 Manager, Mining $ 42,000 10 Loader Operator $ 17.58
18 Manager, Processing $ 42,000 10 Electrician $ 17.58
17 Mine Operations Superintendent $ 36,000 9 Welder $ 16.59
17 Mine Maintenance Superintendent $ 36,000 9 Mechanic $ 16.59
16 Contoller $ 26,000 9 Crusher Operator $ 16.59
16 Process Maintenance Superintendent $ 26,000 9 Plant Operator $ 16.59
16 Mining Engineer $ 26,000 8 Leach Operator $ 15.59
16 Manager, Health, Safety, Environment $ 26,000 7 Dozer Operator $ 14.60
16 Geologist $ 26,000 7 Grader Operator $ 14.60
15 Manager, Human Resources $ 22,000 7 Tireman $ 14.60
14 Chemist $ 21,000 6 Haul Truck Operator $ 13.60
13 Materials Manager $ 15,000 6 Lubeman $ 13.60
13 Surveyor $ 15,000 5 Accounting clerk $ 12.61
13 Mine Operations Supervisor $ 15,000 5 Water Truck Operator $ 12.61
13 Mine Maintenance Supervisor $ 15,000 5 Crusher Helper $ 12.61
13 Process Supervisor $ 15,000 4 Receptionist $ 11.61
13 Process Maintenance Supervisor $ 15,000 4 HSE Technician $ 11.61
12 Security Supervisor $ 12,000 4 Ore Control Sampler $ 11.61
8 Assayer $ 4,878 4 Mine Utility Operator $ 11.61
6 Purchasing/Traffic Agent $ 4,256 4 Sample Prep Technician $ 11.61
5 Medical Technician $ 3,944 3 Warehouseman $ 10.62
3 Plant Utility Operator $ 10.62
2 Security Technicians $ 9.62
2 Survey Assistant $ 9.62
2 Blasting Crew $ 9.62
1 Laborer $ 8.63
Figure 10 - 2
Queenstake Resources Ltd.
Magistral Project Organization Chart
Year 3
General Manager
Magistral Project
(Expatriate)
Maintenance
Survey Assistant Superintendent
Mine Operations
Expatriate Position Electrician/Inst
Superintendent Maintenance Mechanic (3)
Supervisor Laborer
Salaried Position
Driller Blaster (11)
Mine Operations Loader Operator (6)
Supervisor (4) Haul Truck Operator (15)
Dozer Operator (6)
Grader Operator (2)
Water Truck Operator (3)
Utility Operator (2)
Blasting Crew/ Labor (5)
Mine Maintenance
Superintendent
Electrician
Mine Maintenance Welder
Supervisor (3) Mechanic (18)
Tireman
Lubeman (3)
Laborer (3)
10.5.1 Mining
Mine operating costs are discussed in general in this section. A summary of the mining
costs and their basis can be found in Section 4, Mine Plan, Reserve Estimate, and Mine
Cost Estimate Review; details can be found in PAH’s report which is attached as an
appendix.
Mining will be done by project personnel, using primarily project owned equipment. It is
expected that the bulk of the deposit will be able to be mined using standard drill, blast,
load, and haul open pit mining methods.
10.5.1.1 Fuel
Projected diesel fuel consumption for the mining fleet is presented in the individual
operating cost spreadsheets. The bulk of the diesel fuel used on the project will be used
in mining. Overall, an average of 0.46 liters of diesel will be consumed by mining
operations per total tonne of material mined. At a unit cost of $0.39 per liter ($0.25
without IEPS tax) the net diesel fuel cost per tone mined is $0.114 per tonne. Diesel fuel
will be obtained from local suppliers, from whom price quotations for this study were
obtained.
Table 10-5
Mining Unit Operating Costs
Operation Cost per Tonne Mined
$US
Drilling $0.10
Blasting $0.14
Loading $0.07
Hauling $0.15
Pits/Roads/Dumps $0.09
General Mine $0.03
Mine Maintenance $0.03
Salaried and Support Personnel $0.07
Total Mining Operations $0.68
Based upon liner wear information from both Nordberg and Svedala, liner wear has been
projected to be as follows:
• Jaw crusher: 0.015 kg/tonne at an average cost of $2.39 per kg delivered (Gator
Equipment)
• Secondary and tertiary cone crusher: 7.7 secondary liner sets per year and 10.3
tertiary liner sets per year at a delivered cost of about $5,274 per set (Svedala)
10.5.2.2 Screens
Based upon input from Svedala and experience with other, similar mines, it is estimated
that 8 screen decks will need to be replaced per year at a delivered cost of $562 per screen
(Svedala).
10.5.3 Leaching
10.5.3.2 Lime
A unit consumption of lime will vary depending upon the ore being processed, based
upon process development testing. The detailed cost spreadsheets indicate the unit lime
consumption by year as the source of ore varies. The unit cost of lime, delivered, will be
$75 per tonne. The lime will be supplied locally and was quoted by Cal San Lorenzo, a
Sinaloa based lime producer.
10.5.3.3 Cyanide
Cyanide consumption will vary with the ore type being treated. The project design criteria
and the detailed cost spreadsheets indicate the unit cyanide consumption by year as the
source of ore varies. The unit delivered cost of cyanide, from DeGussa, is $1.175 per kg.
10.5.4 Processing
10.5.4.1 Carbon
An evaluation of carbon consumption published for 16 different heap leach gold
producers determined that a reasonable figure for carbon consumption is 27.8 kg of
carbon per ton of carbon stripped. Converted for use at Magistral, a base consumption of
0.293 kg per ounce of gold has been used. Great Western has quoted a delivered price of
$2.13 per kg.
10.5.5 Laboratory
According to PAH calculations, 14,000 samples of mined material will require assaying
each year, since a certain portion of the material will be able to be identified as waste
without analysis. Based upon an analysis of the cost of fire assays ($4.22 per sample),
copper assays ($0.75 per sample) and solution assays, and considering the number of
samples to be analyzed per year, a supplies cost averaging $0.125 per tonne of ore was
calculated and used.
10.5.6 Fuel
10.5.6.1 Diesel
Diesel fuel, which is used at a number of locations in the project, has been quoted by a
local suppliers at $0.39 per liter, delivered, including the fuel tax (IEPS) of about $0.139
per liter. IEPS is refundable as discussed in Section 11.9.4
Other mobile equipment requiring significant amounts of diesel fuel include the crusher
loader, the cleanup loader, and the light plants.
The primary plant power supply will be from the national power grid. A backup
generator will be in place but only used when line power fails.
Diesel fuel will also be required for carbon stripping and gold smelting in the ADR plant.
An estimated consumption of about 4.4 liters per ounce of gold produced for stripping
and 0.11 liters per ounce for smelting is based upon fuel requirements for the stripping
boiler and the smelting burner. This is an average of about 200,000 liters per year in the
process plant.
10.5.6.2 Gasoline
Based upon a quotation from a local supplier, gasoline will be delivered to the project site
for $0.531 per liter. The study anticipated the use of little gasoline at the project, since all
vehicles have been assumed to be diesel powered.
10.5.6.3 Propane
No propane, natural gas or LPG, in significant quantities, is planned for use at the site.
The laboratory requirements for propane are covered in the blanket cost estimate
allowance for the laboratory.
In general a cost for fuel, lubrication, tires, parts, and maintenance of $4.47 per hour
(about $5,800 per year for each of 15 vehicles) has been used for each small vehicle and
pickup. The remainder of the mobile units, except for an ambulance, are also estimated
based upon an allocation of operating hours per year. These unit costs are intended to
include the cost of fuel, lubrication, tires, parts and maintenance. The unit cost per hour
used for each type of vehicle is presented below:
Table 10-6
Support Equipment Hourly Operating Costs
Vehicle or Equipment Cost per Operating Hour
Pickup $4,000/yr rental allowance
$4.47
Maintenance Truck $8.87
Electrician Truck $4.47
Mobile Crane $4.27
Backhoe $3.00
Forklift $3.09
Bobcat Loader $3.51
Flatbed Truck $6.87
Ambulance $1,000/yr allowance
Table 10-7
Maintenance Supplies – Process Area Cost Basis
Operating Area Cost Estimate Basis
Crushing Based upon 3% of installed cost and actual data from the an
operating mine, increased by 50%.
Solution Application and Leaching Factored based upon operating mine data
Gold Recovery Plant Allowance $0.03 per tonne of pregnant solution based upon
experience with similar operations. This is equivalent to the
3% factor mentioned above.
Smelting Factored from operating mine data
10.8.3 Laboratory
An allowance of $0.0033 per tonne mined, exclusive of equipment maintenance
contracts, has been made for incidental maintenance parts and supplies in the laboratory,
based upon operating mine data.
The unit cost of power has been calculated using the power rate schedule provided by
Comision Federal de Electricidad, CFE, the Mexican power authority. The rate schedule
takes into account two general billing periods, summer and winter, the days of the week,
and three demand-periods within each day, periods of peak, intermediate, and base
demand. Monthly rates are calculated based upon kW demand and the kWh consumed
within each of the sub-periods, and are then modified based upon power factor.
For this estimate the demand was estimated as the installed power times a percentage
representing the actual power draw of a motor related to its rated power draw capacity.
This demand figure was then multiplied by the running hours to yield kWh consumed.
With these data, the average power cost per kWh was calculated to be $0.067 per kWh
and used on an area by area basis to estimate power costs. The calculation sheet for the
average power cost is attached in the operating cost section of the appendix.
Table 10-8
Power Demand, Consumption and Unit Costs
Area Demand Consumption Consumption Cost per
kW kWh per Year Unit kWh Tonne Ore
Crushing 592.5 1,851,000 1.85 /tonne ore $0.124
Process Plant 319.6 1,562,200 1.56 /tonne ore $0.105
Leaching 159.5 735,400 0.33/tonne leach solution
Recovery/Smelting 160.1 826,800 0.74/tonne preg solution
Water Supply 31.5 223,900 0.22/tonne ore $0.015
Office & Laboratory 79.5 347,300 0.35/tonne ore $0.023
Shop & Warehouse 59.6 284,500 0.28/tonne ore $0.019
Site Lighting 26.5 111,100 0.11/tonne ore $0.007
Total 1,109.2 4,380,000 4.38/tonne ore $0.293
10.10.1 Utilities
Utilities costs include those costs associated with communications, potable water, and,
where applicable, power.
10.10.1.1 Telephone
Site communications needs will be met by the national telephone grid from the general
office in Mocorito. Cell phones will be used when calls from the site are necessary. It is
estimated that the annual telephone bill will total approximately $36,000 which is
consistent with KCA experience at other operations, particularly since many of the calls
will be international.
10.10.2.1 Recruitment
It is anticipated that hourly will be about 5% per year, at a recruitment cost of $10 per
person.
10.10.2.4 Termination
As people are terminated, a notification and severance payment amounting to 12 days pay
per year of employment must be paid. This estimate is based upon one year’s service for
each person involved in the turnover estimate, about $150 per person.
10.10.3 Expatriates
One expatriate employee has been budgeted. Expenses associated with hiring and
maintaining this person have been estimated as shown below. It has been assumed that
one expatriate replacement will be made during the life of the project.
10.10.3.1 Recruitment
A $3,000 per year allowance has been made.
10.10.3.2 Relocation
$2,000 per year has been allocated.
10.10.3.3 Storage
An allocation of $3,500 per person per year has been made for storage of personal items.
10.10.3.4 Housing
An allocation averaging $9,000 per person per year has been used to provide for renting
housing in the area.
10.10.3.5 Rotation
A provision of $4,000 per person per year for travel to the point of hire has been used,
assuming it will apply to a family of four.
10.10.4 Safety
10.10.4.4 Awards
An allocation of $25 per person per year to provide for safety performance awards has
been budgeted.
10.10.5 Training
No provision has been made for an ongoing training program beyond the training that
each person will receive from the management and staff of the operation as an ongoing
process and that received from engineers and vendors during commissioning of the
operation.
10.10.6 Development
10.10.6.3 Subscriptions
An allocation of $500 per year has been made for subscriptions to newspapers and
professional publications.
10.10.7.2 Entertainment
A provision of $200 annually has been made for company and business entertainment.
10.10.7.3 Clubs
No allowance has been made for club memberships.
Metallurgical Services
A provision of $15,000 annually has been included in the process management operating
cost estimate to provide for independent review and evaluation of process oriented
activities such as metallurgical testing, process performance evaluation, production
projections, and operating efficiency.
Legal
An allowance of $20,000 has been made for ongoing legal assistance for the project. This
work may include tax law consultation, mining law interpretation, permitting, and
contract preparation and review.
Maintenance Agreements
An allocation of $5,000 per year has been made for the maintenance and repair of office
and miscellaneous office equipment such as computers, printers, copiers, fax machines
and the like.
Armored Security
Once every two weeks, the doré buttons will be transported under suitable security to the
Guamuchil airport then shipped by air from there to Phoenix. The doré will be picked up
there by armored vehicle and taken directly to the refinery. An estimate of $2,400 per
trip, 26 trips per year has been included for a flight service to pick up and transport doré
from Guamuchil to the Phoenix, Arizona, airport. A quotation from a Tucson based
service who provides similar services to other Mexican gold mines is the basis for the
estimate, along with a $100 per trip estimated fee for transport of the doré from the
Phoenix airport to the refinery.
Bus Transportation
Transportation of employees to and from the project is expected to be done using a
contract bus service. An allowance of $0.40 per kilometer for three 10 kilometer round
trips per day has been used.
10.10.10 Leases
10.10.11 Rent
10.10.12 Insurance
10.10.12.1 Property
An annual insurance cost of $30,000 per year has been estimated by Queenstake
personnel based upon similar insurance for Santa Cruz's Lluvia de Oro Operation.
10.10.12.2 Liability
Included with the property insurance costs above.
10.10.13.1 Property
No property taxes are expected to be levied against this project. Other taxes, such as the
minimum tax based upon assets, generally cover this area.
10.10.14.3 Software
An annual administrative allowance of $2,000 has been made for the purchase and
updating of office and administrative software. In addition, $5,000 per year has been
allocated for similar costs associated with mining engineering and surveying software in
the mine management area.
10.10.16.1 Donations
It will be necessary to participate in community activities and to provide funding for an
ongoing amount of community development projects. To this end a total of $5,000 per
year has been estimated to meet these important needs.
10.10.16.2 Fees
No provision for other fees has been made.
10.11 Royalties
Royalties due against operation of the project and production from the project are not
included within the operating cost calculation. They are discussed in the Economics
section of this report.
11.0 ECONOMICS
11.1 Summary
The capital and operating costs generated for the development, operation, and closure of
the Magistral Project have been evaluated using cash flow analysis as a means of
determining the financial aspects and economic indicators for the project. The cashflow
analyses have been done based upon data from PriceWaterhouseCoopers, Queenstake,
and discussions with Eldorado La Colorada personnel and KPMG in Hermosillo, Mexico.
For the purposes of the cash flow analysis, it is assumed that all pre-production costs
occur in Year 0, mining and processing operations commence in Year 1, mining and
crushing operations are completed the first quarter of Year 7, processing operations are
completed in Year 7, and reclamation is completed in Years 7 and 8.
The economic analysis spreadsheet entitled “Base Case Cash Flow Analysis and
Sensitivities”, which is attached at the end of this section, presents the details of the base
case analysis.
The economic indicator chosen for sensitivity evaluation is the discounted cash flow rate
of return (DCFROR). The results of the sensitivity analysis are presented in tabular and
graphical form on the next page. This analysis indicates the project is, as most projects
are, most sensitive to revenue, that being gold price, ore grade, and/or recoveries.
Table 11-1
Economic Comparison - $300/oz vs. $280/oz
Gold Price $300 per Ounce $280 per Ounce
Discounted Cash Flow Rate of Return
Before Tax 20% 13%
After Tax 18% 12%
Project Payback, after start-up
Before Tax 3.2 years 4.0 years
After Tax 3.2 years 4.0 years
Cash Operating Costs, per Oz Gold $180 $180
Total Cash Flow, undiscounted
Before Tax $13,297,000 $8,103,000
After Tax $10,463,000 $7,044,000
Project NPV, 10% discount*
Before Tax $4,669,000 $1,252,000
After Tax $3,158,000 $703,000
Break-even Gold Price
Before Tax $249 $249
After Tax $250 $250
* Net present value is at the start of the project, approximately three months into Year 0, nine months from the
start of operations, or eleven months from first gold production.
Table 11-2a
DCFROR Sensitivity, before Tax
PCT OF DCFROR (PRE-TAX)
BASE REVENUE OP COST CAP COST
CASE
75% -11.3% 37.9% 32.8%
90% 8.9% 27.6% 24.7%
100% 20.48% 20.48% 20.48%
110% 31.3% 13.1% 16.9%
125% 46.5% 1.2% 12.5%
Figure 11-1a
SENSITIVITY ANALYSIS
DCFROR (PRE-TAX)
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
DCFROR
20.0%
15.0%
10.0%
5.0%
0.0%
70% 75% 80% 85% 90% 95% 100% 105% 110% 115% 120% 125% 130%
-5.0%
-10.0%
-15.0%
REVENUE
OP COST
CAP COST
Table 11-2b
DCFROR Sensitivity, after Tax
PCT OF DCFROR (AFTER TAX)
BASE REVENUE OP COST CAP COST
CASE
75% -12.0% 31.1% 28.8%
90% 8.5% 23.4% 21.4%
100% 17.68% 17.68% 17.68%
110% 26.1% 11.8% 14.6%
125% 37.3% 0.7% 10.8%
Figure 11-1b
SENSITIVITY ANALYSIS
DCFROR (AFTER TAX)
40.0%
35.0%
30.0%
25.0%
20.0%
DCFROR
15.0%
10.0%
5.0%
0.0%
70% 75% 80% 85% 90% 95% 100% 105% 110% 115% 120% 125% 130%
-5.0%
-10.0%
-15.0%
REVENUE
OP COST
CAP COST
Figures 11-2a and b, below, present the net present value of the project at the beginning
of Year 0 calculated for different discount rates, both before and after taxes.
$12,000
Net Present Value, $000's
$10,000
$8,000
$6,000
$4,000
$2,000
$- Discount Rate, %
0% 5% 10% 15% 20% 25% 30%
$(2,000)
$(4,000)
$8,000
Net Present Value, $000's
$6,000
$4,000
$2,000
$-
Discount Rate, %
0% 5% 10% 15% 20% 25% 30%
$(2,000)
$(4,000)
11.2 Revenue
Project revenue is based upon the gold production schedule presented earlier in this
report. The base case gold revenue has assumed an average realized gold price of $300
per ounce over the life of the project. Silver is expected to be produced from the
property, but it will be a small amount, and its effect on project economics will be
insignificant.
Common practice within the mining industry in Mexico is to acquire all salaried and
hourly personnel on a contract basis from a service company. The service company,
which needs to be carefully constructed, is an independent company in which the mining
company usually has an interest. Personnel are contracted to the mining company at a
premium, say 10% of wages and benefits, and profit sharing is paid to the employees
based upon the profit margin the service company realizes from the 10% margin. Since
the mining company usually has an interest in the service company, the mining company
receives a share of the profit resulting from the transaction, effectively reducing the
amount of profit sharing paid to the employees.
For the purposes of this study, a profit sharing of 1% of the cost of personnel has been
used (10% of 10% of the total wages and benefits). In many companies the actual
amount is less than this, or essentially nothing.
11.6 Royalties
Two royalty obligations are attached to the project. The Repadre Capital Corporation net
smelter return royalty is based upon the quantity of gold produced by the project. For
production up to 30,000 ounces, a 1.5% royalty is due. For production between 30,000
and 350,000 ounces, a royalty of 3.5% is required. Above 350,000 ounces the royalty
drops to 1%. The amount of royalty paid is calculated by deducting $2.83 per ounce of
royalty gold produced to account for transportation, security and refining costs.
For this project, the capital costs of mine development, leach pad, and process ponds
were depreciated based upon the tonnes of ore stacked onto the leach pad, since the value
of these installations diminish in direct proportion to the tonnage of ore mined. The
remainder of the capital assets were depreciated at 12% per year, with the remaining
depreciation claimed in the final operating year of the project. This approach to
depreciation was applied following discussions with KPMG in Hermosillo, Mexico.
Project non-depreciable expenses include the initial operating supply inventory, the initial
maintenance supply inventory, working capital, and IVA (value added taxes). The initial
operating and maintenance supply inventories are consumed during the final year of the
project's operating life. Working capital will be recouped within the first year of project
operations. The IVA is refundable since the project will produce products for export.
This amount is the result of losses at Compania Minera Pangea SA de CV, the operating
company for Magistral, and IRI de Mexico, a Queenstake subsidiary, combined with the
estimated deductible expenses incurred by Queenstake for the Magistral project. Minera
Pangea losses that can be applied to the project have been calculated by KPMG in
Hermosillo, Sonora, Mexico and total $7,537,796 through 1998. Queenstake has
estimated the remainder, $472,973 of the deductible amount, $812,938 is attributed to IRI
de Mexico.
The following table and resulting graph uses the estimated first year monthly operating
costs, including IVA, and the cash received from the sale of gold at $300 per ounce to
generate a pre-tax cash flow. It assumes that 95% of the value of the gold produced is
received in the month of production with the remainder being received in the following
month. The amount of working capital required for the project is then determined as that
amount which will keep the cumulative cash flow for the period above zero until revenue
can cover operating expenses. In this case, $923,000, entered in the revenue line for
Month 1, established the minimum cumulative cash flow in Month 3. Beginning in
Month 4, and continuing in subsequent months, revenue from gold sales outstrips
operating expenses.
The cash flow model projects that the amount of working capital will be recouped in Year
1, although a capital infusion to the project is also required in that year.
Table 11-3
Working Capital
Figure 11-3
$3,000
CUMULATIVE OPERATING CASH,
$2,500
$2,000
$1,500
$000's
$1,000
$500
$-
0 2 4 6 8 10 12 14
$(500)
OPERATING MONTH
An annual sustaining capital amount of $35,000 has been used in the analysis, with
$50,000 budgeted in the first year of operation and $20,000 budgeted in the last year and
one-quarter of mine life.
This estimate expects that there currently exists, or will exist within Mexico, a mining
and heavy industry base that will be able to use much of this equipment. Certainly the
mobile equipment, crushing, conveying, and screening equipment should find wide
application in the country. Of the total depreciable capital investment in the project of
$15,441,000, a total of $1,047,000 is taken as the sales value at the end of the project,
less than 7% of the capital invested.
For cash flow calculation purposes, the cash resulting from the sale of this equipment was
credited to the project as pre-tax cash flow, since all of the project capital is ultimately
depreciated in the study.
11.9 Taxes
There are four taxes that will be applied to the project that are of primary concern: the
tax on corporate profits, the net assets tax, the value added tax (IVA using the Spanish
acronym), and the diesel fuel tax.
The tax procedures allow for the carry-forward of losses for a period of up to 10 years,
which, for this study is important, due to the prior losses applicable to the project
discussed above. These losses will be inflation indexed to assure that the value of the
losses is not lost due to inflation. Since this analysis is a constant dollar evaluation, this
potential advantage to the project is not recognized, although, when in operation the
project may actually benefit if peso inflation is not compensated for by the dollar
exchange rate.
There are two important programs for which Magistral should qualify and will need to
enter, the ALTEX and PITEX programs. Basically, these programs allow a project such
as Magistral, because it produces a product that will be primarily exported, to import
services, materials, and supplies duty free and without incurring IVA charges. It also
provides for a refund of the IVA paid to obtain domestic services, supplies, and
equipment.
However, the duty free materials and equipment, at the end of their use (if not consumed),
must be exported from Mexico, or else duties will have to be paid. In this study, no
provision has been made for the export of those items which have remaining life. It is
expected that these items will be transferred to another entity, which will re-establish the
duty free status of the equipment.
11.9.1 Corporate
The Mexican general tax rate applicable to this project is 35%.
In the economic analysis of the Magistral project, IVA has been applied to all materials,
equipment, and services acquired in Mexico. IVA has not been applied to those goods
and services that are imported, since, under the ALTEX and PITEX programs, neither
IVA nor duty will be applied. Examination of the annual operating cost worksheets will
indicate those items on which IVA is not directly paid.
On balance, however, the exact amount of IVA paid and a detailed determination of
which items should be included are not extremely important to the cash flows of the
project, since all IVA paid is refunded.
Determining the exact amount of the total cost of diesel fuel that is comprised by the tax
is difficult, since the method of calculation seems to be a closely guarded procedure. The
Magistral staff has determined, though talks with Pemex and local diesel fuel suppliers,
that the current rate in the project region is $0.139 per liter, or about 35% of the total cost
of fuel. This is comparable to the rate given by a mining contractor for his work in
Sonora.
In this study, a credit of $0.139 per liter of diesel fuel consumed by the project has been
incorporated into the cash flow model.
% GOLD RECOVERY 58.4% 76.4% 71.6% 75.0% 63.1% 83.2% 180.1% #DIV/0! 72.9%
CUM % GOLD RECOVERY 53.2% 64.9% 66.8% 68.5% 67.1% 69.3% 72.9% 72.9%
OZ GOLD RECOVERED 34,272 50,081 37,281 33,850 50,440 41,094 21,475 - 268,493
CUM OZ GOLD RECOVERED 34,272 84,353 121,634 155,484 205,924 247,018 268,493 268,493
OZ GOLD SOLD 34,272 50,081 37,281 33,850 50,440 41,094 21,475 - 268,493
REVENUE
$ 300 GOLD PRICE $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300
GOLD REVENUE $ 10,281,600 $ 15,024,300 $ 11,184,300 $ 10,155,000 $ 15,132,000 $ 12,328,200 $ 6,442,500 $ - 80,547,900
TOTAL REVENUE $ 10,281,600 $ 15,024,300 $ 11,184,300 $ 10,155,000 $ 15,132,000 $ 12,328,200 $ 6,442,500 $ - 80,547,900
ROYALTIES
REPADRE 178,159 520,890 387,758 352,072 524,624 427,417 223,360 - 2,614,280
0.0% LANDOWNER $ - $ - $ - $ - $ - $ - $ - $ - -
ROYALTY COST $ - $ 178,159 $ 520,890 $ 387,758 $ 352,072 $ 524,624 $ 427,417 $ 223,360 $ - 2,614,280
$/OZ AU $ 5.20 $ 10.40 $ 10.40 $ 10.40 $ 10.40 $ 10.40 $ 10.40 #DIV/0! $ 9.74
SALARIES AND WAGES (incl ABOVE) $ 1,715 $ 1,729 $ 1,775 $ 1,813 $ 1,860 $ 1,734 $ 820 $ - $ 11,446
DIESEL FUEL CONSUMPTION, LITERS 3,198 2,953 3,378 3,906 4,512 2,718 573 21,239
CAPITAL COSTS
MINING
1 EQUIPMENT $ -
1A OFF-ROAD VEHICLES & EQUIP $ 2,251 $ 1,333 $ 177 $ 631 $ 354 $ 4,746
1B VEHICLES $ -
6 INSTALLATION $ 108 $ 85 $ 23 $ 23 $ 46 $ 285
7 SPARE PARTS INVENTORY $ 228 $ 228
SUBTOTAL $ 2,587 $ 1,418 $ - $ 200 $ 654 $ 400 $ - $ - $ - $ 5,259
TAX $ 45 $ 8 $ 1 $ 1 $ 2 $ 57
8 DUTY $ -
TOTAL $ 2,632 $ 1,426 $ - $ 201 $ 655 $ 402 $ - $ - $ - $ 5,316
MINE SHOP
1 EQUIPMENT $ 82 $ 82
1A OFF-ROAD VEHICLES & EQUIP $ 58 $ 58
1B VEHICLES $ 20 $ 20
6 INSTALLATION $ 63 $ 63
3 BUILDING $ 56 $ 56
7 SPARE PARTS $ -
SUBTOTAL $ 278 $ - $ - $ - $ - $ - $ - $ - $ - $ 278
TAX $ 42 $ 42
8 DUTY $ -
TOTAL $ 320 $ - $ - $ - $ - $ - $ - $ - $ - $ 320
MINE DEVELOPMENT
1 EQUIPMENT $ 21 $ 21
1A OFF-ROAD VEHICLES & EQUIP $ -
1B VEHICLES $ -
6 DEVELOPMENT $ 594 $ 59 $ 13 $ 48 $ 116 $ 72 $ 49 $ 5 $ 956
3 BUILDING $ -
7 SPARE PARTS $ -
SUBTOTAL $ 615 $ 59 $ 13 $ 48 $ 116 $ 72 $ 49 $ 5 $ - $ 977
0% TAX $ 96 $ 9 $ 2 $ 7 $ 18 $ 10 $ 7 $ 1 $ 150
8 DUTY $ -
TOTAL $ 711 $ 68 $ 15 $ 55 $ 134 $ 82 $ 56 $ 6 $ - $ 1,127
CRUSHING
1 EQUIPMENT $ 987 $ 987
1A OFF-ROAD VEHICLES & EQUIP $ 22 $ 22
1B VEHICLES $ -
6 INSTALLATION $ 178 $ 178
7 SPARE PARTS $ 65 $ 65
SUBTOTAL $ 1,251 $ - $ - $ - $ - $ - $ - $ - $ - $ 1,251
TAX $ 97 $ 97
8 DUTY $ -
TOTAL $ 1,348 $ - $ - $ - $ - $ - $ - $ - $ - $ 1,348
SOLUTION HANDLING
1 EQUIPMENT $ 222 $ 43 $ 266
1A OFF-ROAD VEHICLES & EQUIP $ 17 $ 17
1B VEHICLES $ -
6 INSTALLATION $ 12 $ 1 $ 13
7 SPARE PARTS $ 7 $ 7
SUBTOTAL $ 258 $ - $ 44 $ - $ - $ - $ - $ - $ - $ 303
0% TAX $ 21 $ 3 $ 24
8 DUTY $ -
TOTAL $ 279 $ - $ 47 $ - $ - $ - $ - $ - $ - $ 327
PROCESS PONDS
1 EQUIPMENT $ 250 $ 250
1A OFF-ROAD VEHICLES & EQUIP $ -
1B VEHICLES $ -
6 INSTALLATION $ 334 $ 334
7 SPARE PARTS $ -
SUBTOTAL $ 584 $ - $ - $ - $ - $ - $ - $ - $ - $ 584
TAX $ 38 $ 38
8 DUTY $ -
TOTAL $ 622 $ - $ - $ - $ - $ - $ - $ - $ - $ 622
PROCESS PLANT
1 EQUIPMENT 686.25 $ 686
1A OFF-ROAD VEHICLES & EQUIP $ 11 $ 11
1B VEHICLES $ -
6 INSTALLATION $ 200 $ 200
3 BUILDING $ 2 $ 2
7 SPARE PARTS $ 28 $ 28
SUBTOTAL $ 926 $ - $ - $ - $ - $ - $ - $ - $ - $ 926
TAX $ 37 $ 37
8 DUTY $ -
TOTAL $ 963 $ - $ - $ - $ - $ - $ - $ - $ - $ 963
POWER SYSTEM
2 EQUIPMENT $ 200 $ 200
1A OFF-ROAD VEHICLES & EQUIP $ -
1B VEHICLES $ -
2 INSTALLATION $ 452 $ 452
7 SPARE PARTS $ 10 $ 10
SUBTOTAL $ 662 $ - $ - $ - $ - $ - $ - $ - $ - $ 662
TAX $ 84 $ 84
8 DUTY $ -
TOTAL $ 746 $ - $ - $ - $ - $ - $ - $ - $ - $ 746
WATER SYSTEM
2A EQUIPMENT $ 52 $ 52
1A OFF-ROAD VEHICLES & EQUIP $ -
1B VEHICLES $ -
2A INSTALLATION $ 40 $ 40
7 SPARE PARTS $ 8 $ 8
SUBTOTAL $ 100 $ - $ - $ - $ - $ - $ - $ - $ - $ 100
TAX $ 13 $ 13
8 DUTY $ -
TOTAL $ 113 $ - $ - $ - $ - $ - $ - $ - $ - $ 113
INFRASTRUCTURE
1 EQUIPMENT $ 213 $ 213
1A OFF-ROAD VEHICLES & EQUIP $ 29 $ 29
1B VEHICLES $ 17 $ 17
6 INSTALLATION 888 $ 19 $ 10 $ 22 $ 939
3 BUILDINGS $ 67 $ 67
7 SPARE PARTS $ -
SUBTOTAL $ 1,214 $ 19 $ - $ - $ 10 $ - $ 22 $ - $ - $ 1,265
TAX $ 136 $ 3 $ 1 $ 3 $ 143
8 DUTY $ -
TOTAL $ 1,350 $ 22 $ - $ - $ 11 $ - $ 25 $ - $ - $ 1,408
OWNERS COSTS
5 LOCAL $ 719 $ - $ - $ - $ - $ - $ - $ - $ - $ 719
TAX $ 108 $ - $ - $ - $ - $ - $ - $ - $ - $ 108
8 DUTY $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
5 CORPORATE $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TAX $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
8 DUTY $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
5 SUBTOTAL $ 719 $ - $ - $ - $ - $ - $ - $ - $ - $ 719
TAX $ 108 $ - $ - $ - $ - $ - $ - $ - $ - $ 108
8 DUTY $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TOTAL $ 827 $ - $ - $ - $ - $ - $ - $ - $ - $ 827
WORKING CAPITAL $ -
4 W/O TAX & DUTY $ - $ 923 $ - $ - $ - $ - $ - $ - $ - $ 923
TAX $ - $ - $ - $ - $ - $ - $ - $ - $ - -
8 DUTY $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TOTAL $ - $ 923 $ - $ - $ - $ - $ - $ - $ - $ 923
TOTAL EXPENDITURE
SPARES $ 355 $ - $ - $ - $ - $ - $ - $ - $ - $ 355
CAPITAL COSTS $ 11,303 $ 2,814 $ 828 $ 283 $ 815 $ 507 $ 91 $ 5 $ - $ 16,646
TAX $ 821 $ 41 $ 50 $ 8 $ 20 $ 12 $ 10 $ 1 $ - $ 963
DUTY $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TOTAL $ 12,479 $ 2,855 $ 878 $ 291 $ 835 $ 519 $ 101 $ 6 $ - $ 17,964
DEPRECIABLE CAPITAL
1 PLANT EQUIP & MACHINERY $ 3,022 $ 202 $ 410 $ 35 $ 35 $ 35 $ 20 $ - $ - $ 3,759
1A OFF-ROAD VEHICLES & EQUIP $ 2,386 $ 1,333 $ - $ 177 $ 631 $ 354 $ - $ - $ - $ 4,882
1B VEHICLES $ 37 $ - $ - $ - $ - $ - $ - $ - $ - $ 37
2 POWER SUPPLY $ 200 $ - $ - $ - $ - $ - $ - $ - $ - $ 200
2A WATER SUPPLY $ 92 $ - $ - $ - $ - $ - $ - $ - $ - $ 92
3 BUILDINGS $ 175 $ - $ - $ - $ - $ - $ - $ - $ - $ 175
5 OWNERS COSTS $ 719 $ - $ - $ - $ - $ - $ - $ - $ - $ 719
6 INSTALLATION $ 4,390 $ 356 $ 418 $ 71 $ 149 $ 118 $ 71 $ 5 $ - $ 5,578
8 DUTY $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
100% TOTAL $ 11,021 $ 1,891 $ 828 $ 283 $ 815 $ 507 $ 91 $ 5 $ - $ 15,441
TOTAL DEP & NONDEP CAPITAL $ 12,479 $ 2,855 $ 878 $ 291 $ 835 $ 519 $ 101 $ 6 $ - $ 17,964
MINING EQUIPMENT 12.0% WITH FULL DEPRECIATION AT END OF USEFUL EQUIPMENT LIFE
TOTAL $ 2,251 $ 1,333 $ - $ 177 $ 631 $ 354 $ - $ - $ - $ 4,746
YEAR 0 &1 $ 376 $ 376 $ 376 $ 376 $ 376 $ 376 $ 876 $ 3,130
EQUIP REPLACED IN YEAR 4 $ 54 $ 54 $ 54 $ 291 $ 454
YEAR 2 $ - $ - $ - $ - $ - $ - $ -
YEAR 3 $ 21 $ 21 $ 21 $ 21 $ 92 $ 177
YEAR 4 $ 76 $ 76 $ 76 $ 404 $ 631
YEAR 5 $ 43 $ 43 $ 269 $ 354
YEAR 6 $ - $ - $ -
YEAR 7 $ - $ -
YEAR 8 $ -
OTHER MINE, CRUSHING, & STACKING 12.0% WITH FULL DEPRECIATION AT END OF PROJECT
TOTAL $ 1,594 $ 85 $ - $ 23 $ 23 $ 46 $ - $ - $ - $ 1,771
YEAR 0 &1 $ 201 $ 201 $ 201 $ 201 $ 201 $ 201 $ 470 $ 1,679
YEAR 2 $ - $ - $ - $ - $ - $ - $ -
YEAR 3 $ 3 $ 3 $ 3 $ 3 $ 12 $ 23
YEAR 4 $ 3 $ 3 $ 3 $ 15 $ 23
YEAR 5 $ 6 $ 6 $ 35 $ 46
YEAR 6 $ - $ - $ -
YEAR 7 $ - $ -
YEAR 8 $ -
YEAR 0 &1 $ 614 $ 614 $ 614 $ 614 $ 614 $ 614 $ 1,434 $ 5,120
YEAR 2 $ 10 $ 10 $ 10 $ 10 $ 10 $ 32 $ 79
YEAR 3 $ 4 $ 4 $ 4 $ 4 $ 18 $ 35
YEAR 4 $ 5 $ 5 $ 5 $ 29 $ 45
YEAR 5 $ 4 $ 4 $ 27 $ 35
YEAR 6 $ 5 $ 37 $ 42
YEAR 7 $ -
YEAR 8 $ -
TOTAL DEPRECIATION $ - $ 1,660 $ 1,823 $ 1,857 $ 2,212 $ 2,009 $ 1,970 $ 3,910 $ - $ 15,441
TOTAL UNDEPRECIATED $ 11,021 $ 11,251 $ 10,256 $ 8,682 $ 7,286 $ 5,784 $ 3,905 $ - $ - 0.0%
TOTAL DEPRECIATION/DEPLETION $ 8,824 $ 1,660 $ 1,823 $ 1,857 $ 2,212 $ 2,009 $ 1,970 $ 3,910 $ - $ 24,265
SALVAGE VALUE
100% MINE, CRUSH, AGGLOM, STACK $ 693 $ 693 $ 693
SHOP/WAREHOUSE $ 28 $ 28 $ 28
LEACH PAD/PONDS/SOLN APP $ 40 $ 40 $ 40
PROCESS PLANT $ 139 $ 139 $ 139
LABORATORY $ 46 $ 46 $ 46
POWER SYSTEM $ 40 $ 40 $ 40
WATER SYSTEM $ 10 $ 10 $ 10
INFRASTRUCTURE $ 50 $ 50 $ 50
TOTAL $ 1,047 $ - $ - $ - $ - $ - $ - $ 721 $ 326 $ 1,047
CASH FLOW
100% REVENUE $ - $ 10,282 $ 15,024 $ 11,184 $ 10,155 $ 15,132 $ 12,328 $ 6,443 $ - $ 80,548
OPERATING COSTS W/O IVA
MINING - 4,498 4,161 4,970 5,490 6,070 4,007 643 - 29,838
PROCESSING - 2,190 2,540 2,334 2,010 2,426 1,815 982 - 14,296
LABORATORY - 229 232 236 235 236 211 79 - 1,458
WATER - 13 16 16 16 16 16 14 - 107
GENERAL & ADMINISTRATIVE - 801 802 803 805 806 802 651 - 5,470
TOTAL OPERATING COST,incl IEPS; w/o IVA - 7,730 7,752 8,358 8,556 9,554 6,850 2,370 - $ 51,170
100% NET OPERATING COSTS w/o IEPS & IVA - 7,287 7,342 7,890 8,014 8,929 6,473 2,290 - $ 48,226
DEDUCT RECLAMATION ACCRUAL 0 $ 338 $ 263 $ 330 $ 326 $ 341 $ 216 $ 23 $ - $ 1,838
DEPLETION & LOSS CARRY-FORWARD $ 8,824 $ 8,824 $ 7,828 $ 2,250 $ 1,159 $ 1,575 $ - $ - $ -
GROSS PROFIT $ (8,824) $ (7,828) $ (2,250) $ (1,159) $ (1,575) $ 2,260 $ 3,651 $ 1,496 $ 318
TAXES
35.00% CORPORATE TAX $ - $ - $ - $ - $ - $ 791 $ 1,278 $ 524 $ 111 $ 2,704
NET ASSET VALUE $ 11,021 $ 11,251 $ 10,256 $ 8,682 $ 7,286 $ 5,784 $ 3,905 $ - $ -
1.8% NET ASSETS TAX $ - $ - $ - $ 131 $ 104 $ 70 $ - $ - $ 306
TOTAL TAXES PAID $ - $ - $ - $ - $ 131 $ 791 $ 1,278 $ 524 $ 111 $ 2,835
FUEL TAX PAID,IEPS - 443 409 468 541 625 377 79 - $ 2,944
FUEL TAX REFUND (IEPS) $ - $ 443 $ 409 $ 468 $ 541 $ 625 $ 377 $ 79 $ - $ 2,944
NET PROFIT $ (8,824) $ (7,828) $ (2,250) $ (1,159) $ (1,706) $ 1,469 $ 2,373 $ 972 $ 206
CASH SPENDING
ROYALTY $ - $ 178 $ 521 $ 388 $ 352 $ 525 $ 427 $ 223 $ - $ 2,614
PROFIT SHARING $ - $ 17 $ 17 $ 18 $ 18 $ 19 $ 17 $ 8 $ - $ 114
IVA PAID $ 821 $ 1,026 $ 1,003 $ 1,070 $ 1,159 $ 1,248 $ 921 $ 462 $ 107 $ 7,819
RECLAMATION $ - $ - $ - $ - $ - $ - $ - $ 1,121 $ 717 $ 1,838
100% CAPITAL (w/o IVA) $ 11,658 $ 2,814 $ 828 $ 283 $ 815 $ 507 $ 91 $ 5 $ - $ 17,001
CASH FLOW (START W/ NET PROFIT) $ (12,479) $ 1,424 $ 6,621 $ 2,606 $ 824 $ 4,362 $ 4,041 $ 3,565 $ (502) $ 10,463
CASH FLOW (ADD CASH FLOWS) $ (12,479) $ 1,424 $ 6,621 $ 2,606 $ 824 $ 4,362 $ 4,041 $ 3,565 $ (502) $ 10,463
C/F POST FINANCING (EXC DEBT SERVICE) $ - $ 3,560 $ 6,621 $ 2,606 $ 824 $ 4,362 $ 4,041 $ 3,565 $ (502) $ 25,077
CUM CASH FLOW $ (12,479) $ (11,054) $ (4,434) $ (1,828) $ (1,004) $ 3,358 $ 7,399 $ 10,964 $ 10,463
PRE-TAX CASH FLOW $ (12,479) $ 1,424 $ 6,621 $ 2,606 $ 955 $ 5,153 $ 5,319 $ 4,089 $ (391) $ 13,297
C/F POST FINANCING (EXC DEBT SERVICE) $ - $ 3,560 $ 6,621 $ 2,606 $ 955 $ 5,153 $ 5,319 $ 4,089 $ (391) $ 27,912
CUM PRE-TAX CASH FLOW $ (12,479) $ (11,054) $ (4,434) $ (1,828) $ (873) $ 4,280 $ 9,599 $ 13,688 $ 13,297
$12,000
Net Present Value (After Tax)
$10,000 vs. Discount Rate
$8,000
Net Present Value, $000's
$6,000
$4,000
$2,000
$-
Discount Rate, %
0% 5% 10% 15% 20% 25% 30%
$(2,000)
$(4,000)
$16,000
Net Present Value (Pre-Tax)
$14,000 vs. Discount Rate
$12,000
Net Present Value, $000's
$10,000
$8,000
$6,000
$4,000
$2,000
$- Discount Rate, %
0% 5% 10% 15% 20% 25% 30%
$(2,000)
$(4,000)
SENSITIVITY ANALYSIS
DCFROR (AFTER TAX)
40.0%
35.0%
30.0%
25.0%
20.0%
DCFROR
15.0%
10.0%
5.0%
0.0%
70% 75% 80% 85% 90% 95% 100% 105% 110% 115% 120% 125% 130%
-5.0%
-10.0%
-15.0%
REVENUE
OP COST
CAP COST
SENSITIVITY ANALYSIS
DCFROR (PRE-TAX)
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
DCFROR
20.0%
15.0%
10.0%
5.0%
0.0%
70% 75% 80% 85% 90% 95% 100% 105% 110% 115% 120% 125% 130%
-5.0%
-10.0%
-15.0%
REVENUE
OP COST
CAP COST
PERCENT OF BASE CASE
$10,000
Cumulative Cash flow,
$7,500
$5,000
thousands
$2,500
$-
$(2,500) 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8
Cum Cash Flow
$(5,000)
Cash Flow
$(7,500)
$(10,000)
$(12,500)
Project Year
$(15,000)
$10,000
$7,500
thousands
$5,000
$2,500
$-
$(2,500) 0 0.5 1 1.5 2 2.5 3 3.5 4 Cum Cash
4.5 5 Flow 5.5 6 6.5 7 7.5 8
$(5,000) Cash Flow
$(7,500)
$(10,000)
$(12,500)
Project Year
$(15,000)
The Magistral project will require about eleven months of engineering, procurement,
construction management, and commissioning activities (EPCM) from the time detailed
engineering begins until the first production of gold from the project. Attached at the end
of this section is the projected schedule for the development of the project, Figure 12-1.
The EPCM schedule for the project is attached at the end of this section. It has been
created using the start of leach pad and process pond construction at the beginning of
January as the critical constraint, given that none of the earthworks will begin earlier than
October. During the dry season all access road construction, earthworks, and site grading
should be completed, pad and pond liners installed, and concrete poured. Following the
completion of this work, the remainder of the construction should be able to be
successfully carried out regardless of whether it occurs in the wet or dry season, although
the more work that can be done in the dry season the better.
The schedule was created by adjusting the start of pad/pond construction so that the start
of the site access road construction and site grading occurs in mid-November. Then the
schedule was worked both forward and backward from that date to establish the required
start of engineering and to establish the date of first gold production. Completion of the
dry season construction activities (earthworks, pad and pond liners, concrete) is forecast
to be in late March, allowing the possibility of a grace period before the wet season starts.
However, the earliest possible completion gives the best possibility for completion of the
project on time and within budget.
Table 12-1
Project Milestones
Activity Start Date End Date
Project Start Early July
Engineering, Design, and Equipment Selection Early July Late August
Contractor Selection Early August Late September
Equipment Procurement Late August Mid December
Shipping to Site Mid November Late December
Civil Construction
Site Access Mid November Early December
Leach Pad and Ponds Early January Early March
Mechanical Construction Mid January Mid April
Electrical Construction
Power Line Mid December Mid March
Site Distribution Early January Mid March
Mine Development Early January Mid February
Leach Pad Gravel Crushing and Placement Mid March Mid April
Ore Mining and Stacking Early April
(Beginning of operating costs)
Leach Commissioning Early May
Recovery Plant Commissioning Mid May
Gold Production Early June
The contractors required, the start time for selection, and the date they are required on site
to begin work are shown on the attached schedule.
The anticipated procurement lead times for the primary facilities are:
Table 12-2
Procurement Lead Times
Facility/Equipment Procurement Lead Time
Mine Shop and Warehouse 6 weeks
Mining and Mobile Equipment 9 weeks
Crushing Plant (used equipment) 3 weeks
Pad/Pond Liners 4 weeks
Solution Management 9 weeks
Process Plant (portions used) 16 weeks
Power Line 8 weeks
Power Distribution 13 weeks
Water Supply 9 weeks
Laboratory 9 weeks
12.1.4 Shipping
The project is located near a major regional highway, so shipping times are expected to be
short. Overall, a three week shipping period has been allowed for the delivery of plant
equipment and materials to the site. Virtually all of the required equipment for the
project will originate within either Mexico or the United States.
It is anticipated that all construction and erection will be done using local or regional
Mexican contractors, and that concrete, aggregate, steel, tankage, building materials and
supplies, and pipe can be acquired through local sources. Lining installation will be done
by the liner supplier, using his own personnel for installation supervision and quality
control.
The engineering, procurement and construction management for the project will be led by
the EPCM contractor's project manager. This person will provide management continuity
for the project from the beginning of engineering through commissioning and first gold
production. He will be supported by the project engineering and design staff at the
engineering home offices, a construction supervisor, an electrical supervisor, a
geotechnical engineer, and a liner QA/QC technician. Each of the field supervisory
personnel will be on site only during the critical portions of the construction period,
except for the electrical supervisor, who will be present throughout nearly all of the site
construction effort. Details for these activities can be found within the EPCM cost
estimate worksheets in Section 9 of this report.
12.3 Commissioning
Commissioning of the project will be done in phases as portions of the project become
ready for operation. Training for the project will be done by experienced project
management personnel, the EPCM contractor, and certain equipment vendors.
Mine development work will be the first activity on site. During this period it will be
possible to train the core contingent of mine operating and maintenance personnel before
ore stacking begins at the pad in earnest. As the installation of the leach pad is
completed, the crushing plant will be started to produce leach pad cover gravel. During
this period the core operating and maintenance contingent for crushing will be trained.
When sufficient ore is stacked on the pad, leaching will begin with training personnel for
solution application. Nearly concurrent with solution application will be training in the
operation of the process recovery plant and gold smelting, culminating with the first
production of gold and continuing operations for the following seven years.