Pulacayo Project Feasibility Study - Apogee Silver

Pulacayo 1 000 t/d Phase I Feasibility Study - NI 43-101 Technical Report
090644-3-0000-20-IFI-100
Patacayama for packaging before being onward shipped to China. However, if the concentrates
need to be blended and suitable facilities do not exist in Bolivia, trucking to Callao, Peru where
they will either be blended for export or shipped ‘as is’ in containers, again with destination China
(or parity) may be an option. This movement may actually prove to be competitive based on
estimated trucking, port costs and ocean freight rates and would offer a greater degree of
commercial flexibility due to the number of traders operating out of this port.
In addition to the various trucking alternatives, FCAB (owned by the Luksic Group in Chile)
operates a rail line from which runs relatively near to the project to Antofagasta. Early indications
were that rates for concentrate movements to the port may potentially be very low. However, it is
understood that this line is already operating at capacity and may not be able to handle any
additional concentrates.
As noted earlier, any costs associated with these movements will either be borne directly by
Pulacayo or be charged back to the mine via a freight allowance imposed by the buyer. In either
case, the net cost is assumed to be the equivalent.
19.5.2 Additional Logistics Issues
19.5.2.1 Handling Losses
During the transportation of concentrates from the mine to the customer, it is inevitable that some
losses will occur due to spillage and exposure to the elements. While there is no exact figure as
to what handling losses can be expected, common industry practice suggests losses of 0.1 to
0.2% at each handling point. Based on the movement of concentrate from the mine to the
receiving smelter the handling points would be as follows:
1. Storage shed at mine loaded into truck
2. Truck discharged into storage shed at port
3. Storage shed at port conveyed into container/onto vessel
4. Vessel discharged onto quay/into trucks
Depending on the handling procedures prior to weighing and sampling at the receiving end, there
could be an additional handling point (or points) after discharge. Based on the above noted rule
of thumb, handling losses could be in the order of 0.3% to as much as 1.0%. In order to minimize
handling losses, precautions should be taken at each transfer point (e.g. aprons on the sides of
vessels at loading and discharge) and during transit (e.g. covered trucks).
19.5.2.2 Insurance
Ocean marine cargo insurance can be obtained for all concentrates shipped by vessel. Under
CIF contracts, marine insurance is taken out by the seller in the name of the buyer for 110% of
the estimated value of the concentrates in each shipment. Risk of loss, excluding normal handling
losses, passes to the buyer as concentrates are progressively loaded onto the carrying vessel.
Insurance rates typically average around 0.05 to 0.065% of the estimated invoice value (adjusted
to 110%) i.e. the payable metal value, less all treatment and refining charges, as well as any
penalties and escalators/de-escalators which may apply (equivalent to the “Net Invoice Value”, or
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