Gualcamayo is a construction stage project which received positive results in its most recent initial feasibility study, and received environmental approval in August 2007. Based on recent drilling results, Yamana is of the view that the project will ultimately also include an underground mining operation. Gualcamayo is expected to begin commercial production in late Q4 2008. Production is targeted at a rate of over 200,000 ounces of gold production annually with the potential to increase to 300,000 ounces of gold per year with the inclusion of QDD Lower West. The Gualcamayo project has three main mineral deposits: QDD, Amelia Ines and Magdalena, and QDD Lower West.
Overview
Location
The Gualcamayo Property is located in northern San Juan Province, Argentina, approximately 279 kilometres north of the provincial capital of San Juan. The main Gualcamayo block consists of one Cateo (exploration concession) and 57 Minas (mining property interests), covering 7,128 hectares of ground.
Type of Operation
Open pit heap leach
Measured and Indicated Resources
(exclusive of reserves)
23,275,000 tonnes at 1.69 grams/tonne gold = 1,261,000 ounces gold
Inferred Resources
15,586,000 tonnes at 1.38 grams/tonne gold = 692,000 ounces gold
Expected Annual Gold Production
220,000 to 250,000 ounces in 2009
Expected Mine Life
10+ years
PROJECT HISTORY
The general area of the Gualcamayo gold project has been sporadically prospected by local miners for at least the last 60 years. Viceroy acquired the project in 2003 and in January 2005, they completed a Preliminary Economic Assessment of the Quebrada del Diablo (QDD) deposit. The study concluded that the QDD project had the potential to be economically viable and should proceed to the next phases of feasibility study. Yamana acquired Gualcamayo through the acquisition of Viceroy Exploration which closed in early 2007 and a final feasibility for the open pit project at QDD is targeted for mid year 2007.
The project is located within a three hour drive of the provincial capital of San Juan province and is situated within 10 kilometres of paved highways. The mine has a readily available source of water and the elevation of approximately 2,000 metres should pose no difficulties for personnel or equipment. San Juan provincial authorities are very supportive of the project.
OPERATING PLAN
The preliminary economic assessment that was completed for Viceroy Exploration assumed an average production rate of approximately 150,000 to 160,000 ounces of gold per year. Since then, a significant amount of drilling has occurred and resources have increased significantly. An October 2006 resource estimate by GeoSim Services Inc. on QDD calculated a measured and indicated resource of 2.1 million ounces of gold with an additional 0.5 million ounces of inferred at a cut-off grade of 0.3 grams per tonne gold. Yamana now expects that a larger scale project may be feasible, incorporating a future underground mining operation in addition to the open pit.
Yamana is targeting production from Gualcamayo to be 200,000 ounces per year and is targeting an ultimate mine life well in excess of 10 years.
To further support sustainable long life gold production, Yamana has released a resource estimate for QDD Lower West at the end of March 2008 and expects a complete feasibility study by the end of 2008. Yamana has made a positive construction decision to begin mine development work at the Amelia Ines/Magdalena mine in the second half of 2008 with production expected in mid-2009.