Gualcamayo Gold Mine, Argentina

Gualcamayo gold mine is an open-pit heap-leach mine 270km from San Juan, Argentina. It consists of Quebrada del Diablo (QDD), Magdalena and Amelia Ines satellite deposits (AIM) and QDD Lower West underground zone mineral deposits.

Drilling has found Gualcamayo could also have an underground mining operation. The expected minimum life of Gualcamayo is nine years and is expected to increase to 13 years as QDD Lower West reserves start contributing.

Yamana Gold is the owner and operator of the mine. Construction of Gualcamayo was substantially completed in less than 20 months following the receipt of a positive feasibility study and the start of construction in August 2007.

Processing of ore began in late December 2008 and Yamana declared commercial production on 1 July 2009.

Gualcamayo employs about 1,200 people, including contract and direct workers from local communities. In September 2009 the mine was officially inaugurated, which coincided with its first quarter of commercial production.

Geology and reserves

The main QDD open pit deposit, the AIM satellite open pit deposits and the potential QDD Lower West underground zone deposit are the three main mineral deposits at Gualcamayo.

The total measured and indicated mineral resources of the mine are 98.6Mt at an average grade of 1.10g/t, totalling 3.5Moz of gold, an increase of 66% over mid-2006 estimates.

They also include proven and probable reserves of 83.7Mt at an average grade of 1.08g/t, totalling 2.9Mt of gold. The inferred resources of the mine are 12.8mt at an average grade of 1.04g/t, totalling 0.42Moz of gold.

The cut-off grades of mineral resources at Gualcamayo are expected to be 0.3g/t Au for QDD open pit, 0.5g/t Au AIM open pit and 1g/t Au underground QDD Lower West.

Production

After commissioning in 2008, the first gold bullion was produced in early 2009. The mine produced over 135,000oz of gold in the first year of operations. Production is expected to reach 190,000oz of gold in 2013 with QDD ramp-up.

Gualcamayo is expected to produce 150,000-170,000oz of gold in 2011 at cash costs ranging between $460-500/oz.

Mining and processing

Open-pit mining activities began at Gualcamayo in 2008. The ore is transported through haul trucks to the crusher.

The crushed ore is then sent for trituration, where the size of the ore is reduced by grinding. Crushed powder from the trituration is then sent for processing.

Ore processing activities at the mine started in early 2009. The processing process includes ore processing, leaching, carbon columns, dessorption, electrorefination and smelting.

The primary ore pass, primary and secondary crushing facilities, conveyor system and ADR plant were commissioned by April 2009.

Future developments

The third mineral deposit of the mine, QDD Lower West, is under exploration. In 2009 Yamana allocated $5m for advanced exploration activities at this deposit. Yamana discovered a new mineral zone known as Rodado during exploration activities. Development of Radado tunnel will allow for additional drilling of up to 1km of QDD Lower West. The aim is to expand the known orebody and total mineable reserves towards the western area of the deposit.

Salamanca is another mineralisation area which is being explored as a part of the Gualcamayo exploration programme. Salamanca is 10km north of Gualcamayo and within the mine area. Around 15 holes have been drilled to test the northern extension of Salamanca.

It could add resource ounces to the mine. Drilling results in this area suggest an important source of further gold ounces.