Monday, 18 November 2019
Chile Mining: Project Pipeline Update
Austmine Limited

Chile Mining: Project Pipeline Update

This was originally published online by Harris Gómez Group.

The project pipeline continues to grow in Chile. 

It is projected by Chile’s state copper commission Cochilco that the pipeline will grow from US$65.7bn to more than US$72bn.

According to the Economy Ministry, almost US$34bn will be invested in the Chilean mining sector in the next five years. The ministry’s sustainable project management office (GPS) said in a report that 43 mining projects will be built and/or start production by the end of 2023.

This may be wishful thinking but given the quality of projects and the long term view of copper, there is no other market in the world that provides METS companies with the potential growth that Chile does.

Existing Project Pipeline

The biggest project is Vancouver-based Teck Resources’ Quebrada Blanca phase II, which involves US$4.2bn in investment in the next five years to extend the life of the copper mine in Tarapacá region, including building a concentrator to process sulfide ore.

Antofagasta Minerals, meanwhile, will invest US$3.7bn to expand its Centinela copper mine, the GPS office said, with construction starting in 2021.

The third biggest project due to be developed in the next five years is Nueva Unión, a JV between Teck and fellow Canadian GoldCorp, which needs US$3bn over the five years for construction of a copper-gold mine.

New Projects/Expansions Being Added

1.- Los Bronces

Belonging to Anglo American, the project involves an investment of US$3bn to extend the mine life until 2036. It will include a water recirculation process and will not increase processing plant capacity. 

2.- Collahuasi

Operated by Anglo American and Glencore, the project will need US$3.2bn to extend the mine life to 2040. Once finished, Collahuasi will produce at a rate of 210,000t/d. Earlier this year, the two companies submitted the environmental impact assessment and started the indigenous consultation process.  

3.- Proyecto Blanco

Owned by Minera Salar Blanco, this lithium project located within the Salar de Atacama is valued at US$527mn and will produce 20,000t/y of lithium carbonate and 58,000t/y of potassium chloride. 

The company has identified 2.15Mt of lithium carbonate at a depth of up to 200m of the salar’s 600m total. A month ago, Minera Salar Blanco and state copper miner Codelco signed an agreement to negotiate a JV to develop the project. 

4.- Nueva Victoria

In 2018, SQM presented the environmental assessment for its US$350mn Nueva Victoria iodide and iodine project, which seeks to expand the mine site by 43,586ha and the caliche extraction rate from 28Mt/y to 65Mt/y. The project also includes two new iodide production plants of 6,000t/y each and one iodine production plant of 12,000t/y.

5.- El Peñón

With a US$132mn investment, Canada’s Yamana Gold seeks to expand the underground operation. Last week the environmental evaluation service approved the environmental impact assessment and gave the green light to the gold-silver project. 

Don’t Forget about Gold – Low Cost Chilean Projects Moving Forward

During the Denver Gold Forum in September, companies such as Gold Fields, Kinross, and Rio2 noted that their projects were also moving forward.

GoldFields – Salares Norte

Over the next six months, Gold Fields hopes to receive approval for its Salares Norte environmental permits, 

“That [the approval of environmental permits] would be the catalyst to develop what the company thinks is the best discovery in the gold industry,” Gold Fields CEO Nick Holland said during his presentation in Denver.

Salares Norte was discovered in 2011. Project capex is US$834mn and it is estimated to host 5.2Moz of gold, 39.3Moz of silver and 695Mlb of copper. 

Gold Fields’ focus for 2H2019 is to work on the advanced and detailed engineering, the environmental impact assessment process and its funding strategy. 

Rio2 – Fenix Gold

Comprising 22,000ha and a 2.4km strike length mineralized to depth of 600m, the Fenix project is a large undeveloped oxide gold deposit with no sulfide mineralization.

The company hopes to have the environmental impact assessment approved by 1Q21 and construction permits approved by 4Q21. With capital costs of US$111mn, first gold production is targeted for 4Q22.  

Rio2 is currently evaluating a smaller starter project with lower capex and higher grades. The company points to a 16-year mine life at an initial mining rate of 20,000tpd with expansion potential subject to additional water options and changes to the gold price. 

Recently, the company reached an agreement with a local water company to guarantee supply to the project using 30t tankers. Some 25 tankers will transport water to the mine three times a day. 

During his presentation, Black said that Chilean authorities see Fenix as a model project, in terms of a junior company coming to the country and three years later building a mine. 

Kinross – La Coipa and Lobo Marte

La Coipa Restart and Lobo Marte, which are approximately 80km apart and have potential to share resources and synergies. 

CEO Paul Rollinson said at the Denver Gold Forum that they are proceeding with a pre-feasibility study for a potential mine life of over 10 years at Lobo Marte, while expecting to release the results of La Coipa Restart feasibility study in February 2020. The La Coipa study considers refurbishments of current infrastructure. 

Lobo Marte has more than 7Moz of gold in estimated, measured and indicated mineral resources with a grade of 1.2g/t, and its initial capex is put at US$750mn. 

Harris Gomez Group is a Common Law firm, with offices in Santiago, Bogotá, and Sydney. We also have legal teams in Peru, Bolivia, Ecuador, Brazil, and Argentina. Over the last 18 years, we have been supporting foreign companies with their growth in Australia and Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets.

To better understand how we can support your management team in the Region, please contact Cody Mcfarlane at cmm@hgomezgroup.com.

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