For the fourth quarter and year ending December 31, 2014, the Yauricocha Mine produced the following:
||3 Months Ended
||12 Months Ended
|Dec 31, 2014
||Dec 31, 2013
||Dec 31, 2014
||Dec 31, 2013
|Copper (000 lb)
|Lead (000 lb)
|Zinc (000 lb)
(A detailed summary of production is presented in the Company's Jan 27, 2015 press release.)
MINERAL RESERVES AND RESOURCES
On Mar 31, 2015, the Company released an updated NI 43-101 compliant reserve and resource estimate for the Yauricocha Mine completed by Gustavson Associates, LLC of Lakewood, Colorado.
|Proven & Probable
|Measured & Indicated
- The effective date of the mineral reserve and resource estimate is Dec 31, 2014.
- Details of the estimate are provided in the Company’s Mar 31, 2015 press release. A NI 43-101 compliant technical report supporting the estimate will be filed on SEDAR by May 15, 2015.
- Measured and Indicated Resources include Proven and Probable Reserves.
- Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Sierra Metals owns 82% of Sociedad Minera Corona who in return owns 100% of the Yauricocha Mine. Yauricocha is an underground polymetallic mine using the sublevel block caving and cut-and-fill mining methods. It has been in continuous operation since 1948, then under the direction of Cerro de Pasco. The mined ore is hoisted through the Mascota production shaft to the 720 haulage level and then transported by rail through the Klepetko tunnel to the Chumpe processing plant. The daily mining rate is approximately 2,250 tonnes and the Chumpe plant has a daily capacity of 2,500 tonnes. Five different types of ore concentrates are produced, transported to Lima and then sold.
The company is currently sinking a new internal shaft to hoist ore from deeper levels of the mine from the different orebodies to the 720 haulage level and a new service raise from the 720 level to surface. The new access will serve the Mascota, Cuye, Catas, Antacaca, Rosaura and Antacaca Sur orebodies in the Central Mine area. In addition, the internal shaft servicing the Cachi Cachi orebody is being deepened.
Based on current proven and probable mineral reserves and current throughput rates, Yauricocha has an expected mine life of approximately five years. However, extensive deep drilling was done to expand the mine life and an updated NI 43-101 compliant reserve and resource estimate will be published in 2015.
The Yauricocha Mine is located in the Alis district, Yauyos Province, Department of Lima, approximately 12 km west of the Continental Divide and 60 km south of the Pachacayo railway station. The active mining area within the mineral concessions is located at coordinates 421,500 m east by 8,638,300 m north on UTM Zone 18L on the South American 1969 Datum, or latitude and longitude of 12.31050 S and 75.72190 W. It is geographically in the high zone of the western Andean cordillera, very close to the divide and within one of the major sources of the River Cañete, which discharges into the Pacific Ocean. The mine is at an average altitude of 4,600 masl.
The principal access to the mine is the main Lima – Huancayo – Yauricocha highway. The highway is paved for the first 420 km, along the Lima – Huancayo – Chupaca interval. From Chupaca to the mine the road is unpaved. Another important access route is along the southern Pan-American Highway from Lima through Cañete to Yauricocha, through the valley of the Rio Cañete, for a distance of 370 km. The road is paved from Lima to Pacarán, and from Pacarán to the mine it is unpaved.
Although there are closer villages, the closest population center is Huancayo, approximately 60 km east or 90 km by a paved 2 lane road. Supplies and material for the mine are sourced out of Lima, Peru. All personnel and materials are supplied to the mine via normal highway transport. On-site personnel live in camps at the mine.
Grid power is available at the site and water wells are on the property. Paved roads extend to the property boundary, and internal travel is on improved gravel roads. Worker camp facilities are provided on site, with internal worker transport and transport to and from the camp provided by contractors.
The silver of Yauricocha was initially documented by Alexander von Humboldt in the early 1800s. In 1905, the Valladares family filed the claims of what is today the Yauricocha Mine. The Valladares family mined high grade silver ore for 22 years and in 1927, Cerro de Pasco Corporation acquired the Yauricocha claims.
In 1948, Cerro de Pasco commenced mining operations at Yauricocha until the Peruvian Military Government nationalized Cerro de Pasco Corporation and Yauricocha became a production unit of State-owned Centromin Peru S.A. for 30 years. In 2002, the Yauricocha unit was privatized and purchased by Sociedad Minera Corona. Sierra Metals acquired 82% of the total equity of Corona in May, 2011.
Prior to the 1970s detailed production records are unavailable. Since 1973, Yauricocha has produced 13.6 million tonnes of mineralized material containing 63 million ounces of silver as well as 378 thousand tonnes of lead, 117 thousand tonnes of copper and nearly 618 thousand tonnes of zinc. Since 1979 Yauricocha has averaged 413,000 tonnes of production per year.
GEOLOGY AND MINERALIZATION
Yauricocha is a carbonate-replacement ore deposit. This type of deposit is found on continental margins of orogenic belts and on the inner side of principal arcs where carbonate rocks representing miogeoclinal or stable platform depositional environments are widespread. The deposits are associated with magmatic intrusions that are believed to be a result of subduction.
The carbonate-replacement ore deposits of the Yauricocha district are spatially and genetically related to the Yauricocha stock, a composite intrusive body of granodioritic to quartz monzonitic composition that has been radiometrically dated at about 7.5 million years old. The stock intrudes tightly folded limestone and lutite beds of the Late Cretaceous Jumasha and Celendín Formations, and the overlying Casapalca Formation.
Mineralization of the Yauricocha deposit is formed principally of pyrite, quartz, enargite, chalcopyrite, bornite and covellite in the core and central parts of the bodies. Loose masses of friable pyrite, galena, sphalerite and minor amounts of chalcopyrite in a gangue of limestone, clay and quartz occur in the periphery of the bodies. Native gold is associated with the sulfide minerals. Mineralogical zoning of the district is marked, with the core of the central part consisting of enargite located within the Jumasha limestone near the contact with the France Chert. Next to the west are rich bodies of bornite and chalcopyrite with predominance of enargite. Further to the west occur rich bodies of lead, zinc, silver and gold. The same zoning is observed at a smaller scale inside the ore body.
Mining at Yauricocha is accomplished by various extraction methods; principally sublevel caving and overhand cut-and-fill stoping. The larger mineralized bodies are both thicker (10-60 m) and longer along strike and down dip and the ore minerals are held in semi consolidated rocks which ravel easily with minor provocation by blasting. The smaller bodies are also in poor rock, however can be of quite high metal grades, averaging over 10 oz/tonne silver and 10% lead. During cut-and-fill stoping the mine uses timber in square sets to maintain the level open for safe access (mostly through breasting) and then fills the lower level after mining the upper level.
Approximately 93% of the ore and waste material is extracted through the Klepetko Tunnel located at Level 720. The tunnel has a section of 3 m x 3 m, is 4 km long and is equipped with 20 tonne trolley locomotive hauling ore cars of 110 to 160 ft3 capacity.
Because of the potential of the orebodies at depth, the company is currently sinking a hoist raise to hoist ore from deeper levels of the lead oxide, copper and polymetallic orebodies to the 720 haulage level. The new access will serve the Mascota, Cuye, Catas, Antacaca, Rosaura and Antacaca Sur orebodies in the Mina Central. Given the depth of current production below the surface, development drilling to convert the mineral resource to a mineable reserve is performed on an ongoing basis from underground workings.
METALLURGY AND PROCESSING
The Chumpe Mill treats ore produced by the Yauricocha Mine using crushing, grinding and flotation. The ores are complex, carrying zinc, lead, copper, silver and gold values.
Three types of ore have been historically treated: polymetallic (PM), containing payable silver, lead, copper and zinc; copper ore, containing payable copper and silver; and lead oxide (PbOx), containing payable silver and lead. Gold occurs in the ores and is partially recovered; until recently it has not been tracked in the mill. Impurity elements such as arsenic and antimony are not routinely monitored. Currently the mine is processing limited quantities of copper ore. The Chumpe mill is operating two milling circuits only, one treating polymetallic ore and one treating lead-oxide ores. Current production of copper ore is being processed through the PM circuit.
The plant produces five concentrates: lead, copper and zinc concentrate in the polymetallic plant; copper and lead oxide concentrate in the lead oxide circuit. The sulfide lead concentrate from the oxide plant is combined with the sulfide lead in the polymetallic circuit.
Underground drilling in 2014 led to the expansion and upgrading of mineralization at both the Central Mine and Cachi Cachi Mine. In addition, five mineralized chimney breccias were discovered through geologic mapping in an area 400 meters west of the Central Mine. Initial drill testing of one of the chimneys in 2014 intersected multiple mineralized bodies and returned grades of up to 181 g/t silver and 10% zinc.
The 2015 exploration program for Yauricocha includes over 16,000 meters of drilling with over 8,700 meters allocated toward resource expansion and over 7,500 meters for exploration. The program will continue to delineate the extension of mineralization on the various orebodies of the Central Mine and further explore the potential extension of mineralization at both the southeastern and northwestern extents of the mine. Drilling in 2015 will also follow up on the success of expanding mineralization to depth at Yauricocha's Cachi Cachi Mine. Exploration drilling from both surface and underground will also follow up on the chimney breccias discovered in 2014.
In a continuous effort to improve efficiencies, lower the costs and to allow access to mine the lower portion of the orebodies at the Central mine area, the construction of a larger and new internal shaft and a new haulage tunnel was initiated in 2013. The new and larger haulage tunnel will replace the existing Klepetko tunnel which has a small section and passes through sections of bad ground conditions.
Infrastructure enhancements currently in progress:
- Construction of a new 500 meter deep internal shaft starting on Level 720, called the Yauricocha shaft - completion date scheduled for mid-2016.
- Deepening of the Mascota production shaft.
- Excavation of a 5.5 km long new haulage tunnel on 720 level from the new Yauricocha internal shaft to the Chumpe processing plant – completion date scheduled for Q2 2016.
- Deepening of the Cachi Cachi shaft to access newly discovered mineralized areas.
A production permit to increase the capacity of the Chumpe plant from 2,500 tpd to 3000 tpd is expected to be issued by the Ministry of Energy and Mines mid-2016.
In addition, the Company expects to continue the following initiatives:
- Cost reduction to keep Yauricocha one of the best-performing underground mines in Peru.
- Optimization of the sublevel block caving operation.
- Continuous improvement at the Chumpe plant to keep costs low and improve recoveries.
- Metallurgical studies to improve the recovery rates from the lead oxide complex ores.