The Peruvian Ministry of Energy and Mines approved a permit related to Camino Minerals' (TSXV: COR) environmental impact assessment for the Chapitos copper-gold project.
The permit allows for the expansion of drilling activities along the Diva Trend at Chapitos. Drilling is expected to commence during the latter half of 2019.
Camino's 2019 exploration program is ongoing and includes geological mapping and structural analysis, chip/channel and trench sampling, and road building, all in preparation for geophysics and drilling
In a press release, Camino explained that the 200-drill pad permit allows for a maximum of 908 drill holes or 445,200 metres of drilling over a 3.6-year period.
According to the miner, the drilling will further define and potentially expand on the copper mineralized zones at the Adriana, Katty, and Vicky targets, but also includes drilling designed to evaluate the potential for additional zones of copper mineralization along the Diva Trend.
"Camino is excited to have received the EIA permit to continue drilling the Diva Trend copper mineralization along strike and down dip allowing for potential expansion of the mineralized footprint," the firm's CEO, John Williamson, said in the media brief. "The permit will allow the company to better locate drill collars in optimum locations to both test the Diva structure and other structural and stratigraphic copper opportunities while potentially minimizing drill costs."
Camino informed that the exploration program will also include follow-up work on the Atajo Trend where exploratory drilling intersected 0.83 % copper over 16.3 metres, including 2.09 % copper over 5.0 metres.
The Chapitos project is a 22,000-hectare land pack near Chala in southern Peru.
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Canada's New Energy Metals (TSXV: ENRG) announced that it entered into a letter of intent with certain arm’s length vendors to be granted the exclusive right and option to acquire an initial 70% royalty-free interest in and to certain exploration and exploitation mineral concessions known as the “Exploradora North project.”
The 84,750-hectare project is located in the II and III Regions of northern Chile along the prolific West Fissure fault system between the open-pit Escondida mine, the largest copper mine in the world which is owned by BHP and Rio Tinto, and Codelco’s El Salvador underground copper mine.
In a press release, New Energy explained that Exploradora North is also located immediately north and east of Codelco’s Exploradora deep drilling project, where near-surface resource reported 100 Mt of 0.3 Cu and 0.2 g/t gold.
According to New Energy, Minera Activa, a private Chilean company, recently announced positive results in the Exploradora district, and Brazil’s Vale is also actively drilling to the west of Exploradora North.
To move forward with the acquisition, New Energy Metals, through a wholly-owned Chilean subsidiary, will enter into a formal option to purchase agreement which contemplates that the Vancouver-based firm has to incur in exploration expenditures on the project of at least $15 million within 48 months of the effective date. The company will also have to pay $8.5 million an issue an aggregate of 11,500,000 common shares of New Energy Metals, all of which will be done in different installments or phases.
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A paper published in the journal Resources Policy states that bonus schemes for middle management employees in mining companies play a role in tailings dams failures.
According to the research article, such compensation packages actively encourage managers to cut costs and increase production, as the material decisions that put into motion such measures lay in their hands and positive results would increase their annual bonuses.
Although most mining companies don’t make public the compensation packages they give their middle management personnel, such incentives are known to be a common practice in the industry. Thus, using the information provided by the two companies that do report them, Newmont Goldcorp (NYSE: NEM, TSX: NGT) and AngloGold Ashanti (JSE:ANG, NYSE:AU), the authors of the study found that some schemes are equivalent, in financial terms, to an equity payment plus a put option.
The number of tailings dam failures has doubled in recent years from 8 in the period 1999–2003 to 16 in 2014–2018
“So the bonus is highly leveraged. Like investment bankers, the person stands to gain a lot if his/her performance is above target, but loses little, if it falls below target,” the study reads. “Year after year, managers keep taking risks with a low probability of occurrence but with potentially catastrophic consequences. These risks are compounded by shortages of experienced staff due to the cyclic nature of the industry and the retirement of the baby-boomer generation.”
Authors Margaret Armstrong, Renato Petterd and Carlos Petterd connected their observations to those in earlier research papers that analyzed certain cases of tailings dams failures and found that either production was increased or costs were significantly reduced in the years leading to the accidents.
The academics report that, for example, prior to the collapse of the tailings facility at the gold and copper Mount Polley mine in British Columbia in August 2014, which resulted in 24 million cubic meters of contaminated sludge and mine waste going into nearby lakes and rivers, Canada’s Imperial Metals (TSX: III) had grown its production by 23% in Q2-2014 from the previous quarter.
Boliden Apirsa, on the other hand, had flat revenues from 1995 to 1997, just before the tailings dam crashed at the Los Frailes lead and zinc mine in Aznalcóllar, Spain, in April 1998. But capital expenditures doubled during this period from $55.4 million to $112.3 million and operating income increased spectacularly from $2.3 million to $84.9 million. “So production costs must have dropped significantly over the period.”
In Brazil, production at Vale’s (NYSE:VALE) Samarco iron ore mine had increased by almost 40% in the five quarters just before the accident there in 2015, which killed 19 people and became the country’s worst-ever environmental disaster. Similarly, at the Paraopeba subsection of the Southern System where the Corrego do Feijão dam was located, production was risen by 12% in the five quarters before the Brumardinho catastrophe where almost 300 people died.
“The next question we asked ourselves was: Had an extra tailings dam been constructed to handle this additional quantity of rejects, or was it being pumped into existing tailings facilities? Alternatively, had filter presses or high capacity thickening been introduced to reduce the quantity of water?”, the authors of the paper ask.
After reviewing Vale’s quarterly reports for investors, which list all the major projects in progress, they found that there is no mention of building a new tailings dam or of filter presses. “This means that the existing ones had to cope with the waste from the extra production.”
Off the hook
Except for $42.5 million for the initial clean-up, the paper in Resources Policy highlights the fact that Boliden Apirsa succeeded in avoiding paying for the pollution caused by the tailings dam breach.
“Boliden's legal team and expert witnesses convinced a Spanish court of law that the tailings dam failure was due to geotechnical problems, thereby transferring the responsibility to the companies that had designed and built the dam. An epic legal battle ensued in which the Spanish Ministry of the Environment and the local government of Andalusia attempted to get Boliden to pay for the damage, but failed due to loopholes in the Spanish legal system,” the document reads.
In the case of the Mount Polley mine, Armstrong and her colleagues bring to the forefront the fact that the Independent Expert Engineering Investigation and Review Panel established after the accident found that the failure was caused by the design, which did not take into account the complexity of the sub-glacial and pre-glacial geological environment associated with the Perimeter Embankment foundation.
This has meant that no one has been held responsible for the disaster and, on top of this, the 3-year deadline to lay charges under British Columbia laws passed in 2017, while there is only one year left to lay charges under federal environmental and fisheries law.
The authors of the study refrained from commenting on the legal proceedings involving Vale’s tailings dam failures as they are still in progress.
In their recommendations of what would be needed to stop tailings dam failures, the researchers suggest, besides changes in the processing technology and wider adoption of the Mining Association of Canada’s guidelines issued in 2017, heavier fines and penalties.
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Sweden’s Deputy Minister of Foreign Trade and Promotion Niklas Johansson said this week that his country is interested in helping Peru develop its lithium mining industry.
According to Johansson, Sweden has become lithium-thirsty due to an increase in demand for electric cars, bolstered by government efforts to reduce carbon emissions and promote clean energy solutions.
EVs’ batteries have an intercalated lithium compound as one electrode material.
Experts predict that the mining industry will need to invest $12 billion within five years to meet the global demand for lithium
Even though Peru is not part of the so-called ‘Lithium Triangle’ formed by Bolivia, Chile and Argentina, just a year ago Macusani Yellowcake, the Peruvian subsidiary of Canada’s Plateau Energy Metals (TSX-V: PLU), found 2.5 million tonnes of high-grade lithium resources at its Falchani hard rock deposit in the southern Puno region.
According to Reuters, companies such as US-based Albemarle, the world’s No. 1 producer of the metal, and China’s Tianqi Lithium, the No. 3, may be waiting for Plateau to confirm the size of its reserves before showing their interest in Peru.
Sweden doesn’t seem to be waiting, though. Speaking in Lima at a conference called “Mining for the future: The Swedish experience,” which was organized by the embassy of the European country and the mining division of the Engineers College of Peru, Johansson said that the lithium demand from companies such as Volvo and Scania is in an upward trend and that Swedish miners are eager to develop responsible and sustainable lithium projects.
The Vice President of Ecuador, Otto Sonnenholzner, and the Minister of Energy and Non-renewable Natural Resources, Carlos Pérez, presented the country’s new Public Mining Policy, whose focus will be on supporting large-scale operations and investments, and eradicating illegal mining.
The announcement was made during a visit to the southern Zamora Chinchipe province, where Lundin Gold’s (TSX:LUG) flagship Fruta del Norte gold project is located. Both Sonnenholzner and Pérez stopped by the mine site and met with representatives of the Canadian company, who said 50% of the construction phase is completed.
The government officials said they expect first exports from large-scale mining to be delivered before year-end and that the national treasury foresees royalties, taxes, patents, and earnings generating some $836 million between 2019 and 2021. By 2021, the Lenín Moreno administration wants the mining sector to account for 4% of the GDP.
Besides focusing on large investments, the new policy gives relevant authorities six months to update a National Mining Development Plan so that it incorporates a strategy to combat unregulated mining operations and severe penalties for those extracting mineral resources illegally.
The policy also requires authorized mining projects to comply with mining safety and environmental and social sustainability standards, which will be outlined in new regulatory and auditing mechanisms.
The new protocol calls for the establishment of specific targets related to the updating of applicable regulations for the mining industry, as well as goals associated to economic development, research and development, and management and administration.
The presentation of these guidelines took place on the same week the Ecuadorian Constitutional Court is scheduled to receive arguments from those who have put forward a mining referendum in the northern Imbabura province, where SolGold’s (LON, TSX:SOLG) flagship Cascabel copper-gold project is located.
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The Venezuelan Ministers of Mining Ecological Development, Víctor Cano, and Indigenous Peoples, Aloha Núñez, met with 15 captains from the Pemón tribe and, according to state media, reiterated that it is illegal to carry out mining activities in national parks.
According to official outlets, the Indigenous leaders from the southeastern Gran Sabana municipality presented Cano and Núñez with complaints regarding environmental debts that have been dragged for decades and concerns regarding the boundaries of the Orinoco Mining Arc.
“The Pemón people ratified their commitment to boost the reorganization process of mining operations south of the Orinoco river and rejected the environmental debt that illegal mining has created. They also agreed on doubling efforts to protect nature,” Cano is quoted as saying.
According to the mining minister, the Orinoco Mining Arc was created to confine mining activities to a specific area and safeguard national parks and other protected areas.
His words, however, contradict a recent report by human rights group Kapé-Kapé who denounced that illegal mining is rampant in and around the controversial Mining Arc of the Orinoco River National Development Strategic Zone, which is a 111,843 square-kilometre concession area that is equivalent to 12.2% of the country’s landmass and where gold, diamond, iron ore, copper, bauxite, coltan, among other resources are allowed to be mined.
Such artisanal and unregulated operations -Kapé-Kapé reports- are polluting the Carrao river and its tributaries within the Canaima National Park, in the southern Bolívar state and which is the traditional territory of the Pemón. They are also affecting the Imataca forest reserve, the biosphere reserve of the High Orinoco, the Yapacana National Park and El Caura National Park.
Kapé-Kapé said that even though artisanal gold mining has been taking place in the Bolívar state for at least three decades, the practice is experiencing a revival due to the presence of dissident guerrilla men from Colombia, who create alliances and gangs with the miners.
“Indigenous and non-Indigenous communities in the region have denounced this problem many times. They estimate that there are up to 2,000 gangmen carrying out criminal activities related to the exploitation of mineral resources in the southern part of the country,” the group said.
Protest against the Mining Arc
As the meeting between the ministers and the Pemón was being reported, activists protested in Caracas at the Supreme Justice Tribunal against the inaction related to an appeal they submitted three years ago to repeal the decree that created the Orinoco Mining Arc.
Members of the Platform Against the Mining Arc, the Observatory of Political Ecology, and the Citizen Platform in Defense of the Constitution gathered before the country’s top court to denounce that their legal request has fallen on deaf ears. This, despite the fact that in their view and in that of many other conservation organizations, the creation of the Mining Arc through decree 2248 published in the Official Gazette No. 40.855 did not take into consideration any relevant studies related to the environmental impacts of such a massive development.
“With this decree, the President unconstitutionally assumes popular sovereignty belongs to him and awards himself supra-constitutional powers by making decisions related to the fragmentation of the national territory, the creation of new authority structures, special mechanisms related to public contracts, and easier routes for imports, while at the same time setting up tax privileges for those operating in the Orinoco Mining Arc,” the activists said in a statement made public via social media.
According to the protesters, the creation of the Arc has only caused more violence in Venezuela’s southeastern states, where hundreds of Indigenous people have been killed in the past three years, where organized crime is rampant and where the “law of the strongest” prevails.
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Jersey-based Royal Road Minerals (TSXV: RYR) announced the closing of the acquisition of Northern Colombia Holdings from Compañía Kedahda, an affiliate of AngloGold Ashanti (JSE:ANG) (NYSE:AU).
In a press release, Royal Road explained that NC Holdings, through its subsidiaries, owns Exploraciones Northern Colombia, which holds or has rights to a title package comprised of mining concession agreements covering approximately 35,747 hectares of land, and the rights with respect to applications that have been made to acquire mining concessions over approximately 168,841 hectares of land, in prospective mineral belts in the Nariño, Cauca and Antioquia departments of Colombia.
Royal Road's initial focus will be on granted titles containing targets that can be moved to the drilling-stage as soon as possible
The titles are grouped into two blocks, the Southern Block, which is located contiguous with Royal Road's existing 3500 square kilometers of exploration rights in the western Nariño province and the Northern Block, which covers the Middle Cauca Belt.
“There are 16 currently identified individual gold project areas located within the title package and numerous underexplored areas which management believes host significant geologic potential,” the media statement reads.
Royal Road said its initial focus will be on granted titles containing targets that can be moved to the drilling-stage as soon as possible. Some of these targets are the La Llanada project area in Nariño, characterized by very high stream sediment sample results and comprising several currently known high-grade vein-gold systems; the El Tambo intrusion-related gold project in the western Cauca province, where AngloGold Ashanti reported an area of steep-moderate dipping quartz-veins, up to 3 meters wide, over 3 kilometers in strike length and 600 meters in total zone-width and with rock chip results returning up to 77 grams per tonne gold; and the Güinter sheeted quartz-calcite-sulfide vein project area in Antioquia, a system that has been mapped over 6 square kilometers and where AngloGold Ashanti drilled 10 scout diamond drill holes for a total of 5662 meters at the project and reported best intersections of 56 meters at 1.1, 14 meters at 1.8 and 20 meters at 1.8 grams per tonne gold.
Under the terms of the stock purchase agreement, Royal Road purchased from Compañía Kedahda all of the issued and outstanding shares of NC Holdings and paid $4,655,462.
Upon completion of a NI43-101 report, a feasibility study, and commencement of commercial production on any of the projects that has an inferred mineral resource of not less than one million gold equivalent ounces, Royal Road would have to pay the seller $5 million in each stage.
Once commercial production has started in such million-ounce project, Royal Road would have to pay an aggregate amount equal to $20 million payable in four installments of $5 million on the date that is 90 days following the end of each of the company's four consecutive fiscal quarters.
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A worker at Codelco’s El Teniente operation was hit by a rock and died on Sunday, Chile’s state miner informed.
In a media statement, the world’s No.1 copper producer lamented the passing of 58-year-old Pedro Enrique Mena Bolvarán, who belonged to the company’s Mining Division.
According to Codelco, the causes that prompted the rock to fall down at the Pilar Norte mine are under investigation.
“As soon as the accident took place, activities in the area were halted and emergency protocols were activated. First aid personnel came to the rescue and practiced CPR for over 30 minutes. However, their efforts were unsuccessful and they ended up confirming the worker’s passing. Authorities were also informed about the incident,” the miner’s statement reads.
The company emphasized that it maintains its commitment to improving safety measures and occupational health standards in its different operations.
El Teniente is the world’s biggest underground copper mine and the sixth largest by reserve size. It is located 80 kilometres south of Santiago in the Andes mountain range.
At present, the facility is undergoing an extensive $3.4 billion-expansion project called El Teniente New Mine Level project to extend its productive life by 50 years.
Community leaders from the district of Chilcaymarca in the southwestern Castilla province are threatening Peru’s Compañía de Minas Buenaventura (NYSE: BVN) with a general strike due to the company’s decision to fire 40 workers from its Orcopampa gold-silver operation.
The activists say the workers’ dismissal constitutes a breach of an agreement that Buenaventura and the community signed back in 2004. According to the deal, the company should prioritize people in Chilcaymarca when it comes to jobs as long as the mine is operative, given that it is located in the town’s area of influence and that the community gave the miner 1,000 hectares of terrain.
People in Chilcaymarca are asking the company to participate in a roundtable where the issue can be discussed and resolved.
However, Buenaventura told local media that it was forced to fire some workers because gold and silver reserves at Orcopampa have gone down and so has production. In fact, during the first quarter of 2019, the company reported an 85% YoY decrease in the mine’s gold output and a 96% decline in its silver output. Overall, the miner suffered a sharp 22.2% YoY plunge in gold production in Q1-2019.
Buenaventura also said that it is planning on keeping only essential personnel at Orcopampa, that it will dismiss external contractors, and that the focus for the rest of the year will be on an exploration campaign in the area.
Peru’s largest publicly-traded precious metals company started operating the underground Orcopampa mine back in 1967. Mine reserves in 2018 were estimated in 306,000 ounces of gold, while resources were estimated in 187,000 ounces of the yellow metal.
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