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MDO, Codelco likely to decide Purén start-up in March

Bnamericas Published: Wednesday, January 12, 2005
The board of Chilean gold miner Mantos de Oro ( MDO), a 50:50 joint venture held by Canada's Placer Dome (NYSE: PDG) and Kinross Gold (NYSE: KGC), is likely to discuss in March whether to approve a project to develop its 65%-owned Purén gold-silver deposit, a Placer Dome spokesperson told BNamericas. It is probable the project will also be presented the same month to the board of Chile's state copper miner Codelco, which holds the other 35% of open pit Purén, said Placer Dome director investor relations Greg Martin. If given the greenlight, Purén would take roughly one year to develop. The project capital has not yet been released but is anticipated to come in at less than US$30mn split between the three partners, said Martin. Chile's environmental authorities Conama approved at the end of December the Purén environmental impact study (EIS), presented in July 2004. The project lies at an elevation of 4,200-4,800m, 160km northeast of regional capital Copiapó. The EIS outlines a plan to mine 12.2Mt of mineral over four years and two months providing a daily mining rate of 8,149t. The ore would be taken in 150t trucks to MDO's La Coipa gold-silver mine 8km away for processing under a toll treatment arrangement, according to Martin. "It is planned that Purén ore will be blended with existing ore sources over a number of years. [La Coipa's] mine life will be extended by about two years based on what is currently known at Purén," said Martin. Minimum infrastructure requirements include the rehabilitation of a road that previously connected the Chimberos deposit, depleted in 1999, to La Coipa. The project also envisages two waste material dumpsites, offices, warehouses, repair workshops and a domestic water treatment plant. The project considers a workforce of 60 in the construction stage and 50 once in operation. Martin said the Purén resource was included in La Coipa resources and reserves reported at the end of 2003 and has not been separately released. Placer Dome's 50% share of La Coipa's proven and probable reserves at December 31, 2003 stood at 16.0Mt grading 1.1g/t gold and 74.1g/t silver for 590,000oz of gold and 38.2Moz of silver. The company's 50% share of La Coipa measured and indicated resources at December 31, 2003 stood at 15.8Mt grading 1g/t gold and 25.1g/t silver for 516,000oz of gold and 12.5Moz silver. La Coipa has capacity to treat approximately 17,500t/d and was expected to produce in the region of 175,000oz of gold and 7.6Moz of silver in 2004. Placer Dome is the project operator.

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