“Ore Reserve conversion, Mineral Resource growth, advancement of development studies a focus”
Productora Copper Project
The Productora project is Hot Chili’s flagship project in Chile. The project is located 15km south of the town of Vallenar, at low altitude, in Chile’s Region III. The project benefits greatly from its proximity to existing infrastructure including the Pan-American Highway, rail, grid power, and established port facilities (40km distance) as shown in Figure 1.
Over 275,000m of drilling has been completed by the Company since exploration commenced in 2010, with a large-scale, bulk tonnage copper-gold-molybdenum deposit amenable to open pit mining successfully defined, and a large geotechnical and metallurgical drill programme completed as part of the well advanced Pre-feasibility Studies.
Resource & Reserve Growth in Parallel with PFS Advancement
A comprehensive exploration targeting exercise was undertaken early in 2015 which included integration of results from a large soil geochemical campaign which successfully identified a +6km-long porphyry footprint at Productora.
A drill programme with three key objectives was completed during the year:
- Ore Reserve growth- targeting extensions to the planned central pit and satellite oxide pit areas, and classification upgrades in areas of lower confidence,
- Mineral Resource growth- drill testing of priority exploration targets within the larger Productora project, and
- Pre-feasibility study (PFS) completion- Diamond drilling to complete scheduled metallurgical and geotechnical work streams.
Mineral Resource growth drilling proved extremely successful with the discovery of the Alice copper porphyry deposit, just 400 metres west of the planned central pit design. Alice was discovered as part of the first exploration drilling to be completed in almost two years at Productora, and highlights the potential for further similar discoveries at the project.
Productora's entire Mineral Resource of more than 1Mt of copper and 675,000 ounces of gold is a breccia style deposit hosted within a structural corridor known as the Main Zone.
The Company's confirmation of Alice as a porphyry-style copper deposit adjacent to the breccia hosted Main Zone is an exciting development in the growth of Productora into a multi-deposit copper project, and demonstrates the exploration potential of the wider project.
The Alice discovery strengthens further resource additions into the PFS and highlights the potential for Productora to elevate into a new class of much larger emerging copper developments.
Hot Chili is now reviewing its exploration and drilling results over other potential porphyry footprints identified at Productora. The Company believes there is strong evidence to suggest that Productora may host a cluster of deposits, as is the case at other known copper porphyry systems globally and within Chile.
Generative exploration efforts during 2014 identified three large-scale, multi-element surface geochemical footprints typical of zoned copper porphyry deposits. First pass drilling completed late on 2014 over two of these footprints in the western extent of the project have confirmed extensive distal alteration zones associated with large porphyry deposits.
Late in the year an Induced Polarisation (IP) and Magnetotelluric (MT) geophysical survey was commissioned at Productora. The IP and MT survey will assist in refining exploration targets in advance of drill testing, as the company continues to pursue Mineral Resource and Ore Reserve growth in parallel with development of the Productora project.
The use of a “Deep penetrating IP” geophysical technique at Productora will provide a valuable additional dataset to assess the overall potential of the large porphyry system that has been identified.
Productora Pre-feasibility Study Nearing Completion
Productora Development Strategy
Hot Chili’s strategy of project development and de-risking in parallel with resource and reserve growth at Productora is shaping towards another significant uplift as the Company progresses closer to a decision to mine.
On March 31st 2014, Hot Chili announced that Productora’s Mineral Resources had grown to over 1 Mt of copper, 675,000 ounces of gold and 29,000 tonnes of molybdenum. In addition, the Company also announced a first Probable Ore Reserve estimate for Productora of 90.5Mt grading 0.48% copper, 0.11g/t gold and 172 ppm molybdenum containing 433,000t of copper, 308,000oz of gold and 15,500t of molybdenum.
The open pit Ore Reserve estimate was stated as conservative at the time and only estimated for the planned central pit at Productora. Owing to the level of advancement of certain PFS work streams, the estimate was based on conservative assumptions and inputs including:
- All oxide Mineral Resource material was treated as waste.
- No transitional ore was used to drive pit optimisations ensuring the pit design process was considered robust against fresh sulphide ore types only.
- Metallurgical recoveries applied to gold, molybdenum and transitional copper ore types were conservatively applied considering both benchmarking of other similar Chilean copper operations and limited test work results available at that time.
Pit modelling as part of the final stages of PFS will now contemplate the optimisation of both oxide and sulphide Mineral Resources at Productora, which is expected to deliver a significant reduction to overall mining strip ratio and lower pre-strip related start-up capital.
Given Hot Chili’s PFS advancements and Scoping study confirmation that the addition of a copper oxide project is robust, the Company expects to report significant growth in open pit Ore Reserves and Mineral Resources with the Productora PFS. This expanded metal inventory will also include the addition of the Alice Porphyry copper discovery, 400m west of the planned central pit.
Hot Chili is confident of delivering a strong PFS result in advance of commencing a Definitive Feasibility Study (DFS) for Productora in 2015.
Oxide project set to boost scale of Productora
The Productora Mineral Resource estimate contains copper oxide resources of 25.6Mt grading 0.52% copper, for 132,000 tonnes of copper metal from surface. The in-pit portion (currently treated as waste and not considered in the current Ore Reserve) represents 15.4Mt grading 0.58% copper.
Positive results of a copper oxide Scoping Study have confirmed that a substantial copper oxide project may be economically exploitable at Productora. The independent Scoping Study, completed by EPCM Group Mintrex, found the addition of an oxide operation to be attractive as a complement to the existing Productora copper sulphide project, indicating the potential to increase the scale of copper production, further boosting Productora’s economics.
In light of the Scoping Study findings, the PFS has been expanded to include the study of a heap leach operation followed by a Solvent Extraction Electrowinning (SX-EW) circuit with the potential to produce 8,000 to 10,000 tonnes of cathode copper production annually for six to eight years, in addition to the targeted annual copper-in-concentrate production of approximately 45,000 to 55,000 tonnes.
Development Drilling Activities
Development drilling undertaken during the year supported continuing metallurgical and geotechnical work streams. Metallurgical diamond holes were directed into the high-grade Habanero zone of the central pit area, and also the newly discovered Alice porphyry deposit and will be used to facilitate sulphide flotation variability testwork for the project as part of the PFS. Diamond drilling was also focussed toward a nine-hole geotechnical programme to further refine the Productora central pit design's slope angle model.
Geometallurgy Study to Refine Ore Reserve for PFS
A significant geometallurgical study has been initiated at the Productora project, with the key objectives of the study being to investigate relationships between alteration patterns, geochemical zonation and ore textures, and to assess the impact on liberation behaviour and recovery response.
Quantitative and predictive geometallurgical models integrating a range of geological and geometallurgical data are being developed to reflect variability across the deposit, and will allow for quantification of and modelling of process behaviour. Proxies have been developed which allow for ore classification to be extrapolated across the deposit, in turn allowing predictive models for comminution and recovery parameters to be assigned to the Productora Mineral Resource.
The results of this geometallurgical study will be used to refine the PFS Mineral Resource and Ore Reserve estimates.
Click to Enlarge
- Location and existing infrastructure surrounding the Productora copper project, Region III Chile.
- Schematic cross section across the Productora Project displaying Alice and Productora Main Zone, looking north
- Schematic cross section of the Alice copper porphyry deposit looking north
- Central pit design displaying Ore Reserve blocks (pink) against oxide Mineral Resource blocks (yellow) and the +0.2% copper mineralisation interpretation at the Alice porphyry discovery