Brazil Mining 2011 - GBR

BRAZIL MINING
Colossus Minerals’ first of many planned projects is unique in Brazil in that the company has negotiated a cooperative
working alongside the garimperos' union COOMIGASP in order to complete underground exploration of the Mina Nova Serra
Pelada site. (Photo courtesy of Colossus Mining)
cant exploration capacity in four greenstone
belts in Brazil. We have made construction
decisions at C1 Santa Luz,
Ernesto/Pau-a-Pique and Pilar. This will
create significant organic production
growth after two years in construction. We
have made a new exploration discovery at
Suruca, which will add only gold production
to our existing Chapada mine.
According to IBRAM (Brazil’s Mining
Institute), Brazilian gold production will
increase 50% by 2014.”
Canadian-based Kinross accounts for
the third element of Brazil’s tripartite of
leading gold producers. The company’s
flagship Paracatu mine is of particular
interest as the world’s lowest grade gold
mine with just 0.4 g/mt of ore. “From the
beginning we thought the Paracatu mine’s
potential was very high,” said Regional
Vice President Jose Freire. “However, after
conducting a drilling campaign and an
exploration campaign to re-evaluate the
potential of the operation, we realized the
potential was three or four times higher
than previously anticipated. Kinross invested
$500 million in 2006 and expanded
Paracatu’s production by three times from
18 million to 61 million tons of ore. The
Paracatu operation is relatively cheap,
because the amount of hard rock in relation
to the amount of ore is low. The deeper
we go however, the more costs increase
as our efficiency drops. Kinross’ goal is to
continuously strive to find the best extraction
methods, with the aim of maximizing
our profitability. Our total recovery is determined
by a combination of our floatation
and magnetic recovery technologies.
Flotation is currently around 82% and iron
metal recovery is around 96%. Total overall
recovery stands at about 79%. This year
Kinross’ current production of gold from
Paracatu will be around 490,000 oz.
Kinross’ Brazilian operations account for
around 22% of Kinross International’s production.
Right now the current cost of production
is about $500oz; on the whole this
is competitive, even if the ore grade is as
low as it is. At full capacity, Paracatu will
be the largest gold producing mine in
Brazil. Kinross is currently building a new
processing mill and we have just approved
the construction of a fourth mill. Next year
we will finish construction of a new tailings
dam, which is a huge investment, but will
suffice for the entire duration of the life of
the mine. Next year we will also increase
production to between 492,000 to
550,000 oz; while in 2012 production will
reach about 575,000 oz. Kinross expects
the life of Paracatu mine to endure for
approximately 30 years.”
Walter De Simoni, CEO Nickel Business
of Anglo American Brazil. (Photo courtesy
of Anglo American)
Stephan Weber, CEO Iron ore Business
of Anglo American Brazil. (Photo courtesy
of Anglo American)
Three emerging gold miners of particular
interest in Brazil are Jaguar, Colossus
and Eldorado Gold, whose relatively
recent entries into Brazil underline the
country’s immense potential for gold production.
“Jaguar Mining started its operations
in Brazil in 2006 and is currently
producing gold at its Turmalina,
Paciência and Caeté operations, which
combined produce about 220,000 oz of
gold,” said COO Lucio Cardoso. “Jaguar’s
gold operations are located in the Iron Ore
Quadrangle region, near the city of Belo
Horizonte in the state of Minas Gerais,
Brazil. Belo Horizonte serves as the commercial
center for Brazil’s mining industry,
and has excellent infrastructure to
support world-class mining operations.
The Iron Quadrangle, where Jaguar controls
93,000 acres, is a prolific greenstone
belt that has produced significant
quantities of gold at competitive costs per
ounce from open-pit and large-scale
underground mining operations for more
than 300 years. However, it remains relatively
under-explored compared to the
other great greenstone belts around the
world, with a relative absence of active
junior mining and exploration companies.
An encouraging fact about the Iron Ore
Quadrangle is the existence of multiple
examples of gold resources running to
depths exceeding 2,000 m, with similar
widths and grades to those seen at shallower
depths. This is important to Jaguar
because the average depth of its
resources is less than 400 m from the
surface. The bulk of these resources are
open at depth and laterally, giving the
potential for substantial discoveries.
“In addition to its activities in the Iron
Quadrangle, Jaguar also has plans to
develop the Gurupi Project in the state of
Alfredo Tranjan Filho, President of INB
- Industrias Nucleares do Brasil. (Photo
courtesy of INB)
72 E&MJ • JANUARY/FEBRUARY 2011 www.e-mj.com