Chapada is an open-pit copper and gold mine in Brazil with milling facilities that produce a copper/gold concentrate, and is Yamana's largest property. Mining is currently occurring at a rate of 16 million tonnes per year. Concentrate is shipped to third party smelters for processing into copper and gold metal.
Continuous operations began in mid November 2006, and commercial production was declared in February 2007.
Production from Chapada for 2008 is estimated to be 170,000 to 175,000 ounces of gold and 155 to 160 million pounds of copper. Production at Chapada is expected to increase to approximately 200,000 ounces of gold per year for 2012.
Overview
Location
In northern Goias State, Brazil, approximately 320 kilometres north of the state capital of Goiania and 270 kilometres northwest of the national capital of Brasilia. The project encompasses a series of mining and exploration licences totaling 8,369 hectares.
Type of operation
Open pit operation with 16 million tonne annual capacity. The ore is processed into a readily saleable copper-gold concentrate through a flotation processing plant.
Proven and probable reserves
(at December 31, 2007)
310,820,000 tonnes at 0.24 grams/tonne gold = 2,354,000 ounces gold
310,820,000 tonnes at 0.34% copper = 2,296,000 pounds of copper
Measured and Indicated Resources
(exclusive of reserves)
119,817,000 tonnes at 0.13 grams/tonne gold = 504,000 ounces gold
119,817,000 tonnes at 0.22% copper = 581,000 pounds of copper
Inferred Resources
304,861,000 tonnes at 0.11 grams/tonne gold = 1,078,000 ounces gold
304,861,000 tonnes at 0.19% copper = 1,277,000 pounds of copper
Expected Mine Life
19 years
Expected Annual Gold Production
170,000 to 175,000 ounces in 2008
175,000 to 180,000 ounces in 2009
Expected Annual Copper Production
155 to 160 million pounds in 2008
160 to 165 million ounces in 2009
Total expected gold production during life of mine
1.3 million ounces
Total expected copper production during life of mine
2 billion pounds
Other pertinent facts
High-grade starter pit with a head grade of 0.459% copper and 0.428 g/t gold, is expected to produce approximately 225,000 tonnes of concentrate averaging 28% copper and 20 g/t gold annually. This translates into more than 130 million pounds of copper and 134,000 ounces of gold annually over the first five years.
PROJECT HISTORY
When Yamana acquired Chapada in July 2003, the project had an outlined zone of continuous copper-gold mineralization approximately 3,500 metres long by 900 metres wide, with a depth of up to 220 metres. In February 2004, Yamana completed an updated technical report for Chapada and one of the significant changes in projections was an increase in the planned throughput from 12 million to 16 million tonnes per year. A final feasibility study was completed in June 2004 and a construction decision was announced at that time. The project was completed by October 2006 and commercial production was declared in February 2007.
OPERATING PLAN
The Chapada mine is now producing and selling concentrate on a consistent basis. The mine plan predicts average annual production of approximately 134 million pounds of payable copper and approximately 135,000 ounces of payable gold per year in concentrate for each of the first five years of operation. A mine life of 19 years is estimated for total production of about 2.0 billion pounds of recoverable copper and 1.4 million ounces of recoverable gold.
Gold production at Chapada is expected to be in the range of 170,000 to 175,000 ounces in 2008 and in the range of 175,000 to 180,000 ounces in 2009. Copper production at Chapada is expected to be 155 to 160 million pounds in 2008 and 160 to 165 million pounds in 2009. Production is expected to increase to approximately 200,000 ounces of gold per year for 2012.
VALUE ENHANCING INITIATIVES
Now that commercial production at Chapada has been achieved, the Company plans to increase gold and copper production at Chapada in part by optimizing the grinding circuit to further improve throughput and by studying the feasibility of processing 1.8 million tonnes of stockpile oxide grading 0.52 grams/tonne gold material which can be processed through conventional heap leaching. The Company is also assessing the feasibility of producing a pyrite concentrate to make sulfuric acid for sale to third parties.