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Salares Norte is Gold Fields' primary exploration project this year - Northern Miner

Monday, 17 August 2015

The downturn in the mining industry isn’t generating very many good news stories these days, but the promise of untold riches from an undeveloped high-grade deposit in Chile still elicits excitement in even the gloomiest of markets.

Talk on the street is that Gold Field’s (NYSE: GFI) Salares Norte high-grade deposit in the Andes is probably one of the best undeveloped deposits—if not the best undeveloped deposit—in the world today.

Some even venture to say that it has the potential to rival Chile’s legendary El Indio mine, which between 1981 and 2002 produced 4.5 million ounces of gold at about 8.33 grams gold per tonne, along with 25 million ounces of silver and 472,000 tonnes of copper.

During a presentation in February at the BMO conference, Gold Fields chief executive officer Nick Holland noted that Salares Norte is “probably the only project that we’ve retained from the greenfields portfolio which has graduated through to an advanced drilling project.”

“This is something that’s quite exciting because it’s high grade,” he said. “It’s oxides and it’s fairly shallow. It’s still some ways off, but one to watch for in the future.”

The company’s US$23.5 million exploration budget this year for Salares Norte is funding infill and step-out drilling on the high-grade portion of the main ore body, as well as resource delineation drilling at Agua Amarga, an extension contiguous to the main mineralised zone.

So far Salares Norte has an inferred resource of 23.3 million tonnes grading 4.15 grams gold per tonne and 44.8 grams silver per tonne, for 3.1 million oz. of contained gold and 33.6 million oz. of silver.

Gold Fields discovered the mineralization through reverse circulation drilling in March 2011, and owns 100% of the project.

During his presentation, Holland estimated that if the company could convert all of the inferred resource that it has now into a mineable reserve, it would probably meet the company’s hurdle rate.

“We’ve got 3.5 million ounces of inferred resource,” he said. “That would probably translate into possibly an eight- or nine-year life. That’s probably enough and if there’s upside beyond that then that would give us more incentive to do it.”

But the mining executive also emphasized that he was not going to "rush" it.  

“We’re going to drill this out properly and we’re going to make sure we really understand—not just what we have and that we can join the dots between the high-grade sections—but how big this could be.”

Depending on the success of this year’s 40,000-metre drill program, Holland said the project could move into the prefeasibility study stage later in the year.   

“We really want to understand what we’ve got here and then we’ll decide on: Do we start small, do we start medium, or do we start bigger? It’ll give us all of the information to make a better informed decision.”  

Salares Norte is in northern Chile’s Atacama region and in the northern part of the Maricunga Belt, an area with a predominance of Cenozoic volcanic rocks, made up of eroded strato-volcanos, volcanic domes and pyroclastic rocks.

Mineralisation is contained in a high sulphidation epithermal system, hosted mainly by breccia. Most of the mineralization known to date is oxidised and the sulphide mineralisation contains mainly pyrite.

The company notes that preliminary metallurgical tests on samples of oxidised material have shown extraction in the order of 90% using a conventional carbon-in-leach process.

In January 2014 Chilean authorities approved an environmental impact declaration (DIA) for the next phase of exploration, and Gold Fields completed 8,223 metres of drilling (at a cost of US$8.21 million) and completed a scoping study.

The downturn in the mining industry isn’t generating very many good news stories these days, but the promise of untold riches from an undeveloped high-grade deposit in Chile still elicits excitement in even the gloomiest of markets.

Talk on the street is that Gold Field’s (NYSE: GFI) Salares Norte high-grade deposit in the Andes is probably one of the best undeveloped deposits—if not the best undeveloped deposit—in the world today.

Some even venture to say that it has the potential to rival Chile’s legendary El Indio mine, which between 1981 and 2002 produced 4.5 million ounces of gold at about 8.33 grams gold per tonne, along with 25 million ounces of silver and 472,000 tonnes of copper.

During a presentation in February at the BMO conference, Gold Fields chief executive officer Nick Holland noted that Salares Norte is “probably the only project that we’ve retained from the greenfields portfolio which has graduated through to an advanced drilling project.”

“This is something that’s quite exciting because it’s high grade,” he said. “It’s oxides and it’s fairly shallow. It’s still some ways off, but one to watch for in the future.”

The company’s US$23.5 million exploration budget this year for Salares Norte is funding infill and step-out drilling on the high-grade portion of the main ore body, as well as resource delineation drilling at Agua Amarga, an extension contiguous to the main mineralised zone.

So far Salares Norte has an inferred resource of 23.3 million tonnes grading 4.15 grams gold per tonne and 44.8 grams silver per tonne, for 3.1 million oz. of contained gold and 33.6 million oz. of silver.

Gold Fields discovered the mineralization through reverse circulation drilling in March 2011, and owns 100% of the project.

During his presentation, Holland estimated that if the company could convert all of the inferred resource that it has now into a mineable reserve, it would probably meet the company’s hurdle rate.

“We’ve got 3.5 million ounces of inferred resource,” he said. “That would probably translate into possibly an eight- or nine-year life. That’s probably enough and if there’s upside beyond that then that would give us more incentive to do it.”

But the mining executive also emphasized that he was not going to "rush" it.  

“We’re going to drill this out properly and we’re going to make sure we really understand—not just what we have and that we can join the dots between the high-grade sections—but how big this could be.”

Depending on the success of this year’s 40,000-metre drill program, Holland said the project could move into the prefeasibility study stage later in the year.   

“We really want to understand what we’ve got here and then we’ll decide on: Do we start small, do we start medium, or do we start bigger? It’ll give us all of the information to make a better informed decision.”  

Salares Norte is in northern Chile’s Atacama region and in the northern part of the Maricunga Belt, an area with a predominance of Cenozoic volcanic rocks, made up of eroded strato-volcanos, volcanic domes and pyroclastic rocks.

Mineralisation is contained in a high sulphidation epithermal system, hosted mainly by breccia. Most of the mineralization known to date is oxidised and the sulphide mineralisation contains mainly pyrite.

The company notes that preliminary metallurgical tests on samples of oxidised material have shown extraction in the order of 90% using a conventional carbon-in-leach process.

In January 2014 Chilean authorities approved an environmental impact declaration (DIA) for the next phase of exploration, and Gold Fields completed 8,223 metres of drilling (at a cost of US$8.21 million) and completed a scoping study.


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