Name of the Project
Miraflores silver/gold project.

Location
The Miraflores property is located in the municipality of Quinchía, Department of Risaralda, in Colombia.

Client
Metminco.

Project Description
A scoping study on an underground-only mining project at Miraflores has determined that it is financially robust and represents a viable development option.

The study envisions a mining schedule producing 4.03-million tonnes at a mined grade of 3.51 g/t gold and 2.84 g/t silver, including a low-grade stockpile material feed over a mine life of nine years, producing an estimated 50 000 oz/y of recovered gold at steady state.

Mining will be conducted using underground long-hole stoping methods with structural (cemented) and nonstructural (uncemented) backfill using development rock and filtered tailings.

An elevated cutoff grade of 2.2 g/t gold has been determined to be optimal, with the addition of 2 g/t gold stope areas, which are immediately adjacent to the 2.2 g/t gold areas and require limited additional development.

A production rate of about 1 300 t/d has been targeted from the underground operation to produce an estimated 50 000 oz/y. The mine will meet the 1 300 t/d plant feed, with a 365-days-a-year, 24/7 schedule of 12-hour shifts.

The plan includes some low-grade marginal material that is stockpiled and then fed into the plant at the end of the life-of-mine. The mine plan includes only measured and indicated mineral resources. Mineralised tonnage larger than 1.2 g/t gold comprises 61% measured resources and 39% indicated resources. All inferred material has been treated as waste with zero grade when mined during the development process or adjacent to a stope.

Access to the mine will be through two portals, with 4 m × 5 m drifts used for the main ramps and primary haulage drifts. The veins and mineralised zones between veins will be accessed through a two-ramp system and all material will be truck-hauled to surface.

The overhand mining sequence will advance in each stope block by mining from lower to upper levels. Metallurgical studies have shown that the Miraflores material can be effectively processed using a flowsheet that includes gravity concentration. This is followed by cyanidation of the gravity tailings or by a flowsheet that includes gravity concentration, and the flotation and cyanidation of the flotation concentrate.

The latter flowsheet has been selected because of its slightly better overall recovery and a much smaller footprint for the cyanidation circuit, which offers significant advantages regarding capital cost and disposal of cyanide leach residues.

Tailings material from the concentrator mill will be filtered to generate two distinct tailings streams consisting of flotation and leached residue tailings. The larger fraction of flotation tailings will be stored in a dry stack tailings management facility (TMF) and used for mine backfill.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $73.4-million and $96-million at a 5% discount rate. The internal rate of return has been estimated at 26%.

Payback is estimated at 2.6-years.

Value
The project will require $81-million, including $14-million in contingencies, in initial capital.

Duration
The company is targeting the first gold pour for the first quarter of 2019.

Latest Developments
Metminco has received approval from the Colombian environmental agency in the Department of Risaralda to conduct underground development at its Miraflores gold project.

The development approval will enable the company to expose the previously defined orezones on multiple levels, up to 2 000 m, and to complete infill diamond drilling for stope definition ahead of a final decision to construct the processing facilities and infrastructure.

The company will also assess the possibility of trucking ore from the mine to a processing facility nearby to gain large-scale bulk processing information ahead of a decision to build the processing facilities at Miraflores.

A feasibility study on Miraflores is due by the third quarter of this year, with Metminco hoping to produce an estimated 50 000 oz/y from the project, over an initial mine life of nine years.

The project currently has a measured and indicated resource of 9.27-million tonnes grading 2.82 g/t gold and 2.77 g/t silver, and an inferred mineral resource of 500 000 t grading 2.36 g/t gold and 3.64 g/t silver.

Key Contracts and Suppliers
SRK Consulting (underground mining study).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Metminco, tel +61 2 9460 1856, fax +61 2 9460 1857 or email info@metminco.com.au.