The Metates project is one of the largest, undeveloped disseminated gold and silver deposits in the world. Metates is located in Durango state about 175 kilometers northeast of Mazatlan. During the mid 1990’s Cambior completed a major work program at Metates which included 49,000 meters of reverse circulation and diamond drilling, process development and metallurgical work.
The Metates deposit is hosted in an erosional window of Mesozoic basement rocks. The host Mesozoic sedimentary sequence is over 1,000 meters thick and consists of a series of interbedded sandstones, shales and argillites capped by a 100 meter thick conglomerate. These sediments have been intruded by an ellipoidal quartz latite body in the form of a sub-volcanic to extrusive volcanic dome and is up to 300 meters thick and 1,500 meters long.
Mineralization occurs in two zones: the Main Zone which is within the intrusive and its underlying sediments and the North Zone, within the conglomerate and adjacent sediments. Gold occurs primarily as micron to submicron particles generally enclosed within pyrite and other sulfides in both the sedimentary and intrusive host rocks. In 1996, predating NI 43-101 requirements, Independent Mining Consultants of Tuscon, Arizona using a 0.50 equivalent cut-off grade, calculated a tonnage and grade estimate of 786 million tonnes at a grade estimate of 0.81 g/t gold, 15.6 g/t silver and 0.16 % zinc for a resource inventory of 20 million ounces of gold, 394 million ounces of silver and 2.8 billion pounds of zinc.
Chesapeake is undertaking a comprehensive analysis of the exploitation potential of Metates including mineralogical analysis, metallurgical testing, mine planning, flow sheet development and project design. Development work is underway in two phases. Phase I includes updating Cambior Inc.’s 1997 pre-feasibility study based on mining the upper portion of the intrusive mineralization in the Main Zone which estimated to host 122 million tonnes at a grade of 0.87 g/t gold, 15.32 g/t silver and 0.29% zinc and an additional 162 million tonnes at 0.21% zinc (previously classified as waste).
Phase I will include Cambior’s same pit geometry with technological improvements in mine engineering and mineralogical processing, current metal prices and costs and a revised flow sheet plan including a zinc recovery circuit. Chesapeake’s evaluation currently includes the following modifications.
Inclusion of the new proven solvent extraction/electro-winning technology for the recovery of zinc concurrently leached during the oxidation of the sulfidic materials
A valley-fill cyanide leach design approach which improves geotechnical containment
Improved design for load/unload bio-oxidation pads
Replacement of truck haulage and stacking with automated conveyor systems
Inclusion of cyanide recovery
Engineering work to date suggests the modifications could have the following positive impact on Cambior’s 1997 estimated project economics:
Substantial benefit from the inclusion of zinc at current prices
Increase in gold and silver recovery
Lower strip ratio
Reduction in net cyanide consumption
Simplified permitting process
Elimination of long term treatment of acid produced from waste piles
Lower operating costs
Chesapeake expects to complete the mine planning, mineralogical analysis, flow sheet development and economic analysis for a NI 43-101 pre-feasibility level report on Phase I in 2008. The production schedule is based on supplying approximately 24 million tonnes of ore per year to the primary crusher at the rate of 70,000 tonnes per day.
Chesapeake has signed a five year agreement with the local community around Metates. A 10,000 meter (HQ core) diamond drill program is underway in the Main Zone to confirm and expand the known resource. Selected core is also being utilized for detailed metallurgical testwork.
The Phase II development will incorporate new drill data and metallurgical results into a thorough evaluation of treatment approaches for the remaining mineral inventory hosted in the sediment rock types. Phase II evaluations will include newly developed technologies in mineralogical and chemical analysis that can be utilized to identify treatment approaches that will improve the economics of metal recovery of the intrusive and sediment rock types. Heap bio-oxidation followed by heap cyanidation of both the upper and lower intrusive zones will be compared to all other viable treatment options with the appropriate updates of costs and technological advances. A Phase II pre-feasibility level report is scheduled to be completed towards the end of 2009 - early 2010.
