Projects

San Juan Gold Mine

The San Juan mine is a 273km² property located in the San Juan village in Rio Grande district, Peru. Discovered in

Mine Type

Underground

Location

Peru

Size of the Property

273km²

Owner

Century Mining (82.6%)

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The San Juan mine is a 273km² property located in the San Juan village in Rio Grande district, Peru. Discovered in pre-Incan times, the underground mine was exploited by several mining companies during the 1900s and 1970s.

Century Mining acquired the mine in May 2006 and gradually increased its stake to 82.6% by the end of the year. The company’s stake in the mine is held through its two subsidiaries, Century Mining Peru and Century Finance. Accionariado Difundido, a syndicate of mine workers, owns the remaining 17.4% stake. The mine has an estimated life of more than eight years.

The mine consists of 35 known veins, however, mining took place only at the San Juan and Mercedes veins until 2009. Since ownership has changed, good mining practices have not been adopted at San Juan. A fall in gold (Au) prices during the past decade has additionally led to a point of minimal ore development at the mine.

In an attempt to bring the mine and mill capacity back to full production, Century Mining initiated plans to increase the operating capacity of San Juan to 700tpd by 2011.

“Century Mining acquired the mine in May 2006.”

Workers at the mine initiated an indefinite strike on 2 February 2010, demanding for wage and other benefits indebted by the company. However, the strike lasted only five days as the Peru Ministry of Work declared it to be illegal and mining operations returned to normal.

San Juan mine reserves

The mine holds 186,316t of proven and probable reserves graded at 8.87g/t Au. Measured and indicated resources are estimated at 16,475t, graded at 2.53g/t Au. Inferred resources at the mine stood at 175,125t at 9.25g/t Au grade as of April 2008.

Mine exploration

Exploration at San Juan began in late 2006 and covered the San Juan Mine Proper, Golden Champune, Veta Clara, Santa Clarita, Erika and San Juan Regional properties until 2010.

The first drilling permit was obtained in October 2006. Surface diamond drilling conducted on the San Juan and Mercedes vein, its extensions and 35 veins that run parallel or diagonally to them have revealed excellent mineralisation.

San Juan geology and mineralisation

The mine lies within the Nazca-Ocoña metallogenic gold belt in the mining district of San Juan de Chorunga. The area is dominated by metamorphic, igneous, volcanic and sedimentary structures belonging to the Precambrian as well as to the recent times.

Precambrain-aged metamorphic rocks in addition to sedimentary and volcanogenic sedimentary rocks of the mid-tertiary period make up the stratigraphic column.

“The mine has an estimated life of more than eight years.”

The bottom of the column is composed of the Precambrian-aged metamorphic rocks that were pushed upwards in a horst block and left exposed due to the erosive effect of the Ocona River.

The upper portion of the sequence includes mid-tertiary to quaternary aged volcanic and volcanic-sedimentary rocks.

Veins at San Juan are of the mesothermal type, which fill unclosed structures found in the granodiorite host. The veins are often hosted within the same structures with andesitic dikes. Gold mineralisation is found along with quartz and pyrite that fill microfractures as well as fractures that thicken up to 4m.

San Juan mining

Mining at San Juan has been restricted to the veins that outcrop in granodiorite cliffs up to 800m in height. Modern exploration and drilling had not been carried out over the area until November 2006. From the surface, the veins have been mined to a depth slightly below the river bed. Mining at depth or at the full strike extent has never been carried out, leaving a substantial potential for further mineralisation along the strike and dip.

Mining has been carried out only up to 1,000m horizontally and to a depth of 1,000m. Several ore blocks remain to be extracted in this zone.

“The mine has produced 1.2 million ounces of gold in its 35 years of existence.”

Mine processing

The processing plant at the mine site includes five small mills, Merrill Crowe zinc precipitation and CIP circuits. The plant that can operate at an average capacity of 700tpd also has two milling and two flotation circuits. Free gold is recovered in gold jig machines post milling. Gold left in the tailings is recovered from the primary mill circuit via the CIP circuit.

San Juan mine production

The mine has produced 1.2 million ounces of gold in its 35 years of existence. In 2009, San Juan achieved a record production of 17,036 ounces of gold. Production reached 14,252oz and 12,270oz of Au in 2008 and 2007 respectively. Century Mining has set a production target of 18,000oz to 20,000oz of Au for 2010.

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