Los Helados

Los Helados Map

Core Assets Quick Summary

Project NameLos HeladosJosemaria
Interest62.2% (37.8% Pan Pacific) 
as of December 31, 2017
100%
LocationChile (Andes near border)Argentina (Andes near border)
Elevation4,500 m4,300 m
CommodityCopper/Gold/SilverCopper/Gold/Silver
TypePorphyryPorphyry
StatusPEA CompletePEA Complete
Development OptionsStand-alone or combined development with JosemariaStand-alone or combined development with Los Helados
PEABased on combined development called “Project Constellation”. Please see technical report for full details
MiningOpen pit at Josemaria followed by block cave underground mine at Los Helados.The two deposits are located approximately 10 km apart, and material from both deposits will be processed at a centralized facility.
Pre-Tax NPV (8%) & IRR$4.43 billion NPV, 20.7% IRR 
After-Tax NPV (8%) & IRR$2.61 billion NPV, 16.6% IRR 
Payback Period3.6 years 
Metals Prices Assumed$3.00/lb Cu, $1,275/oz Au, $20.00/oz Ag 
Initial Capital Expenditures$3.08 billion 
LOM C-1 Cash Costs (net of by-product credits)$1.05/lb Cu payable 
Nominal Mill Capacity150,000 t/d 
Mine Life48 Years 
Average Metal ProductionLife of Mine
150,000 t Cu
180,000 oz Au
1,180,000 oz Ag
First 5 years
185,000 t Cu
345,000 oz Au
1,310,000 oz Ag
LOM Average Process Recovery88.3% Cu, 72.7% Au, 61.4% Ag 

Los Helados Executive Summary

The geological model for the Los Helados deposit consists of a Miocene porphyry/breccia system emplaced at the contact between a Permo-Triassic dacite porphyry intrusion and late Paleozoic granite. Core drilling indicates that the magmatic-hydrothermal breccia system and dacite porphyries host the largest part of the Los Helados Cu and Au mineralization. Both breccias and porphyries intrude a coarse-grained granite pluton that is locally cut by a swarm of mafic dykes. Copper and Au mineralization extends into the granite country rock.

The granite is interpreted to be of late Palaeozoic age and part of the regionally extensive Chollay event. The magmatic-hydrothermal breccia is Miocene in age, indicated by alteration–mineralization–lithology relationships and Re–Os dating on molybdenite (13.13 ± 0.32 Ma; Kapusta, 2012). Mafic-poor dacite or rhyolite porphyries are assigned to the Permo-Triassic, whereas dacite porphyries with euhedral plagioclase phenocrysts, scarce quartz phenocrysts, and prominent biotite ‘books’ are grouped with the Tertiary magmatic rocks.

The Los Helados area experienced minor post-mineral fault displacement, with only three major faults being mapped to date on the logged sections. The faults are steep and appear to have undergone minor sub-horizontal motion, interpreted by slickenside development.

Lithologies

Granite crops out mostly in the south and east of the mapped area. It is the oldest unit and forms the basement to the Cenozoic magmatic units. The main rock types are coarse-grained granite and granodiorite. The rhyodacite is primarily an intrusive body, centered near the same area as the much younger Los Helados breccia body. The felsic intrusive rocks are assigned to the Choiyoi Group and Pastos Blancos Formation.

Permo–Triassic Andesite Dykes - a suite of mafic dikes that have a northeast trend, and are vertical to steeply northwest dipping, are also included in the Permo‐Triassic sequence.

An intrusive complex of tonalitic composition pre‐dates the Los Helados breccia body; clasts of the intrusive complex are entrained within the breccia. The main mass of the intrusive complex is situated in the north of the Los Helados area.

Mineral Zones

Four mineral zones are recognized within the deposit based on sulphide occurrence. Zone definition does not include late pyrite veinlets or the total volume of sulphides present in the rock. In order of increasing depth, the zones are: pyrite-only (Py); pyrite>chalcopyrite (Py>Cpy); chalcopyrite>pyrite (Cpy>Py); and chalcopyrite-only (Cpy). This sulphide zoning sequence reflects a progressive downward increase in the amount of chalcopyrite relative to pyrite.

Mineralization

The copper–gold mineralization at Los Helados is primarily hosted by the Miocene magmatic–hydrothermal breccia which forms a roughly circular, pipe-like body with minimum dimensions of 1,100 m east–west, 1,200 m north–south and at least 1,500 m vertically. The breccia body is surrounded by a broad halo of moderate to low grade Cu–Au mineralization which diminishes in grade with increasing distance from the breccia contact.

The breccia limits have been established by drilling to the west, east and south; however, the northern limit of the breccia body has not yet been identified. The system also remains open at depth, and the lateral extent of the breccia at depth is also poorly constrained by the current drilling. The eastern contact appears to be subvertical, whereas the western contact dips outwards at roughly 70°, hence the width of the breccia body increases progressively downwards.

Copper grade increases downwards, either in the lower parts of the sericitic zone or in the underlying chlorite–sericite alteration zone, and elevated grades are maintained into the potassic alteration zone. Although Cu grades typically diminish towards the bottoms of the deepest holes drilled to date, there is an exception in that drill hole LHDH34 encountered some of the better grades of the deposit at depth.Gold grades generally correlate well with Cu; however, within the sericitic alteration zones, where pyrite content exceeds chalcopyrite, high Au grades can be locally independent from Cu values and are hosted by narrow veins. Consistently high Cu and Au grades are present in the potassic plus chlorite–sericite and potassic zones where chalcopyrite is more abundant than pyrite.

Ownership

NGEx holds an approximately 62.2% interest in Los Helados subject to a Joint Exploration Agreement with Pan Pacific Copper Co., Ltd., ("PPC") which holds the remaining approximately 37.8%. NGEx is the operator of the Los Helados Project. PPC operates the Caserones Mine located approximately 12 km from Los Helados.
Surface rights over the Los Helados project area are owned by a local community. NGEX has a life of project lease agreement with the owners of the surface rights covering 20,000 hectares over the Los Helados Project area. This agreement secures the surface rights needed for all future exploration, development, and mining.

Location

The Los Helados deposit is located in the Andes Mountains of the Atacama Region, Chile. Access to the Project is from Copiapó Chile, a driving distance of about 135 km, or three hours. Copiapó has a population of approximately 150,000 people, an airport with daily scheduled flights to Santiago and Antofagasta, and companies that offer mining and exploration services.

The climate in the Project area is dry to arid and the temperatures are moderate to cold. Annual precipitation is about 250 mm, with snow at higher altitudes in the winter. Exploration fieldwork is generally carried out from mid-October to early May. It is anticipated that mining operations will be conducted year-round.

The Josemaria deposit also owned by NGEx, is located 10 km to the southeast of Los Helados, in Argentina.

History

Los Helados is a grass roots discovery by NGEx and there is no record of significant exploration activity prior to NGEx's interest.

Geology

Los Helados is a copper-gold (Cu-Au) porphyry deposit. Mineralization at Los Helados is primarily hosted by a Miocene magmatic–hydrothermal breccia that forms a roughly circular, pipe-like body with minimum dimensions of 1,100 m east–west, 1,200 m north–south, and at least 1,500 m vertically. The breccia body is surrounded by a broad halo of moderate to low grade Cu–Au mineralization which diminishes in grade with increasing distance from the breccia contact. The mineralization is dated at 13.13 ± 0.32 Ma.

The breccia limits have been established by drilling to the west, east and south; however, the northern limit of the breccia body has not yet been defined. The system also remains open at depth and laterally. In particular, recent internal NGEx studies have suggested the presence of a discrete, higher-grade breccia phase occurring along the western and southwestern margins of the breccia. This high-grade breccia zone remains open for further extension.

Exploration

Work programs conducted by NGEx include geological mapping; soil, rock-chip, and talus sampling; a number of geophysical surveys including induced polarization (IP)–resistivity, magnetometer, and Mount Isa Mine's Distributed Acquisition System methodology (MIMDAS) surveys; reverse circulation (RC) and core drilling, and Mineral Resource estimation. A number of environmental baseline studies have been undertaken.

Drilling

Eight drilling campaigns have been carried out at the Los Helados deposit, from 2006 to 2015. Drilling to date totals 75,634 m in 95 drill holes, of which five holes (1,366 m) are RC and 90 holes (74,268 m) are core. Core recovery from holes drilled at Los Helados averages 97%.

Resource Estimation

Link to Resource Estimate

Metallurgical Testwork

A two phase metallurgical test work program for Los Helados was conducted at SGS Minerals S.A. (SGS) laboratories in Santiago, Chile under the supervision of Amec Foster Wheeler. Material from Los Helados was also tested for amenability to processing by High Pressure Grinding Rolls (HPGR) by Thyssenkrupp.

The main activities completed during the metallurgical test program were:

  • Sample selection for the metallurgical test programs
  • Chemical characterization including mineralogical analysis
  • Physical characterization
  • Gold recovery using gravity processing techniques
  • Copper, gold and silver recovery using conventional sulphide flotation practices
  • Settling testwork.

The testwork completed to date indicates Cu recoveries range from 84.2% to 93.9%. A fixed global Au recovery estimate of 76% of the feed Au content has been used based on test work. Silver recovery was also fixed, at 60% of the feed Au content
No deleterious elements were noted in the concentrates produced from the testwork completed on Los Helados mineralization and they are expected to be marketable to copper smelters around the world.

Mining and Processing

The PEA contemplates that the Los Helados deposit would be mined by block caving. Initial development would target the highest-grade portion of the deposit. Under the project Constellation development scenario, mill feed material would be sent to a process plant to be located in Argentina next to the Josemaria deposit.

Primary crushing will be followed by comminution by a high pressure grinding roll (HPGR) circuit at a rate that varies between 150,000 t/d and 120,000 t/d depending on the hardness characteristics of the material being processed. Processing will be by conventional sulphide flotation This is expected to produce a concentrate containing a life-of-mine average of 29.0% Cu, 10.4 g/t Au and 70.3 g/t Ag.

Project Constellation

The Company evaluated the potential to develop Josemaria and Los together as one project- Project Constellation and completed a Preliminary Economic Assessment ("PEA") in early 2016. The PEA contemplates sequential production from an open pit mine at Josemaría (Argentina) followed by a block cave, underground mine at Los Helados (Chile). The two deposits are located approximately 10 kilometres apart, and the PEA contemplated that material from both deposits would be processed at a centralized facility.

Project Constellation is one potential development option for the Los Helados project. Other options including evaluation of synergies with the nearby Caserones project operated by joint venture partner PPC are also being considered.

Information of a scientific or technical nature regarding Los Helados is derived from the National Instrument 43-101 technical report with an effective date of February 12, 2016, an amended signature date of March 31, 2016, and titled "Constellation Project incorporating the Los Helados Deposit, Chile and the Josemaría Deposit, Argentina NI 43-101 Technical Report on Preliminary Economic Assessment ", which was prepared by Alfonso Ovalle, RM CMC; Cristian Quiñones, RM CMC; Cristian Quezada, RM CMC; David Frost, FAusIMM; and Vikram Khera, P.Eng., all of whom are with Amec Foster Wheeler International Ingeniería y Construcción Limitada; and by Gino Zandonai, RM CMC, of DGCS SA (the "Project Constellation PEA"). The Project Constellation PEA is available under the Corporation's profile on SEDAR www.sedar.com. The reader is cautioned that the information here is a summary only, which has been derived, in part, from the Project Constellation PEA and that certain sections have been updated. To put the contents hereof in context, the reader should review the entire Project Constellation PEA, together with its illustrations, figures, footnotes, bibliography, etc.

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