Candelaria NI 43-101 Technical Report

Transcription

Technical Report for the
Candelaria Copper Mining Complex,
Atacama Province, Region III, Chile
Report Prepared for
Lundin Mining Corporation
Report Prepared by
SRK Consulting (Canada) Inc.
3CL016.000
September 4, 2015
3CL016.000 – Lundin Mining Corporation
Technical Report for the Candelaria Copper Mining Complex, Chile
Page i
Suite 1500, 150 King Street West
Toronto, Ontario, Canada
M5H 1J9
E-mail: [email protected]
Website: www.lundinmining.com
Tel: +1 416 342 5560
Fax: +1 416 348 0303
Suite 1300, 151 Yonge Street
M5C 2W7
E-mail: [email protected]
Website: www.srk.com
Tel: +1 416 601 1445
Fax: + 1 416 601 9046
SRK Project Number 3CL016.000
Effective date:
Signature date:
June 30, 2015
September 4, 2015
Authored by:
[Signed and sealed]
Jean-François Couture, PGeo
Corporate Consultant
(Geology)
[Signed and sealed]
Glen Cole, PGeo
Principal Consultant
(Resource Geology)
[Signed and sealed]
Gary Poxleitner, PEng
(Mining Engineering)
[Signed and sealed]
John Nilsson, PEng
Independent Consultant
[Signed and sealed]
Adrian Dance, PEng
(Mineral Processing)
[Signed and sealed]
Cameron C. Scott, PEng
(Environment)
Reviewed by:
Several co-authors
Cover: Haul truck loading in the Candelaria open pit, 2015
SRK Team / cs – sk
Candelaria_Final_2015_TR_3CL016000_JFC_DEL_JN_GP_ADD_MV_cs_sk_gc_20150904.doc
September 4, 2015
Page ii
IMPORTANT NOTICE
This report was prepared as a National Instrument 43-101 Standards of Disclosure for Mineral
Projects Technical Report for Lundin Mining Corporation (Lundin) by SRK Consulting (Canada)
Inc. (SRK). The quality of information, conclusions, and estimates contained herein are consistent
with the quality of effort involved in SRK’s services. The information, conclusions, and estimates
contained herein are based on: i) information available at the time of preparation, ii) data supplied by
outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This
report is intended for use by Lundin subject to the terms and conditions of its contract with SRK and
relevant securities legislation. The contract permits Lundin to file this report as a Technical Report
with Canadian securities regulatory authorities pursuant to National Instrument 43-101. Except for
the purposes legislated under provincial securities law, any other uses of this report by any third
party is at that party’s sole risk. The responsibility for this disclosure remains with Lundin. The user
of this document should ensure that this is the most recent Technical Report for the property as it is
not valid if a new Technical Report has been issued.
© 2015 SRK Consulting (Canada) Inc.
This document, as a collective work of content and the coordination, arrangement and any
enhancement of said content, is protected by copyright vested in SRK Consulting (Canada) Inc.
(SRK).
Outside the purposes legislated under provincial securities laws and stipulated in SRK’s client
contract, this document shall not be reproduced in full or in any edited, abridged or otherwise
amended form unless expressly agreed in writing by SRK.
September 4, 2015
Page iii
Executive Summary
The Candelaria Copper Mining Complex comprises two adjacent copper mining operations that produce
copper concentrates from open pit and underground mines located near Copiapó in the Atacama Province,
Region III of Chile. Compañía Contractual Minera Candelaria (Minera Candelaria) is an open pit and
underground mine providing copper ore to an on-site concentrator with a capacity of 75,000 tonnes per day,
and Compañía Contractual Minera Ojos del Salado (Minera Ojos del Salado) comprises two underground
mines: Santos and Alcaparrosa. The Santos mine provides copper ore to an on-site concentrator with a capacity
of 3,800 tonnes per day, while ore from the Alcaparrosa mine is treated at the Minera Candelaria processing
plant. In 2014, the operations collectively produced 155 kilotonnes of copper, 87,000 ounces of gold, and 1.4
million ounces of silver. The Candelaria Copper Mining Complex is indirectly owned by Lundin Mining
Corporation (Lundin; 80 percent) and Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation
(collectively, Sumitomo; 20 percent).
Lundin is a diversified base metals mining company with operations and projects in Chile, the USA, Portugal,
Sweden, and Spain producing copper, nickel, zinc, and lead. Lundin is a Canadian public company with offices
in Toronto, Canada. Its common shares are listed on the Toronto Stock Exchange (symbol LUN) and the
NASDAQ OMX market (symbol LUMI).
In May 2015, Lundin retained the services of SRK Consulting (Canada) Inc. (SRK) to visit the Candelaria
Copper Mining Complex and compile a technical report pursuant to National Instrument 43-101 Standards of
Disclosure for Mineral Projects and Form 43-101F1. This report updates the October 6, 2014 Compañía
Technical Report entitled “Technical Report for the Compañía Minera Candelaria and Minera Ojos del Salado
Copper Projects, Atacama Province, Region III, Chile” by the same authors. It summarizes the technical
information that is relevant to support the disclosure of revised Mineral Resources and Mineral Reserves
estimates prepared using revised economic parameters and the positive results of recent exploration programs.
The revised mine plan supporting the Mineral Resources and Mineral Reserves estimates was disclosed by
Lundin on July 29, 2015.
Property Description and Ownership
The Candelaria Copper Mining Complex is located in Chile’s Atacama Province, Region III, approximately
20 kilometres south of the city of Copiapó and approximately 650 kilometres north of Santiago (Figure i and
Figure ii). The properties are easily accessed using the public road system. Copiapó is a modern city with all
the regular services and a population of approximately 160,000. Personnel employed by the Candelaria Copper
Mining Complex come primarily from the Copiapó region. The Candelaria and Ojos del Salado mines receive
electrical power through long-term contracts with AES Gener S.A., a local energy company. The main water
supply comes from a desalination plant, which was commissioned in 2013 and is located at the Punta Padrones
port facility at the nearby sea port of Caldera. Both the desalination plant and the Punta Padrones port are
owned by Minera Candelaria. Local treated sewage water is also used by the mines. The copper concentrate is
trucked from site and shipped from Punta Padrones to world markets.
Copiapó has a desert climate with mild temperatures year round. Winters are mild with warm temperatures.
Annual precipitation averages approximately 17 millimetres, the majority of which falls in the winter months.
The climate allows for year round mining and exploration activities.
The Minera Candelaria property comprises 276 mining exploitation concessions (approximately
5,849 hectares) and 59 mining exploration concessions (approximately 6,280 hectares). The Ojos del Salado
property comprises 195 mining exploitation concessions (approximately 9,286 hectares) and 29 mining
exploration concessions (approximately 3,400 hectares). The tenements are free of mortgages, encumbrances,
prohibitions, injunctions, and litigation. The tenements containing the active and future mining activities are
not affected by royalties. The Candelaria Copper Mining Complex owns certain underground water use rights
and certain surface water use rights.
September 4, 2015
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Figure i: Location of the Mines Comprising the Candelaria Copper Mining Complex
September 4, 2015
Page v
Figure ii: The Infrastructures of the Candelaria Copper Mining Complex
September 4, 2015
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History
The Candelaria sulphide deposit was discovered by the Phelps Dodge Corporation (Phelps Dodge) in 1987. A
feasibility study was completed in 1990, and, following approval by the Chilean government, construction
started in October of 1992. Sumitomo acquired a 20 percent stake in the property in 1992. Production
commenced in early 1995.
In 2007, property ownership changed when Freeport-McMoRan Inc. (Freeport) acquired Phelps Dodge.
During 2011, a pipeline was completed to bring water from a nearby sewage treatment facility to the
Candelaria mine. A desalination plant at the port of Caldera was built and commissioned in 2013 at a capacity
of 500 litres per second.
The Santos underground mine has been in production since 1929, with processing taking place at what is now
called the Pedro Aguirre Cerde (PAC) plant. Phelps Dodge became sole owner of Minera Ojos del Salado and
the Santos mine and PAC plant in 1985. The PAC plant has been expanded several times to its current capacity
of 3,800 tonnes per day. Sumitomo acquired its 20 percent interest in Minera Ojos del Salado in 2005.
In early 1996, production from the Alcaparrosa underground mine commenced.
In November 2014, Lundin acquired Freeport’s interest in the Candelaria Copper Mining Complex.
The Candelaria Copper Mining Complex has been a significant producer of copper since the mid-1990s. In the
last four years, annual payable copper and gold metal in concentrates sold varied between 147 and
191 kilotonnes and 83,000 and 101,000 ounces, respectively.
Geology, Mineralization, and Deposit Types
The Candelaria sulphide deposit is located at the boundary between the Coastal Cordillera and the Copiapó
Precordillera. The Coastal Cordillera of Chañaral and Copiapó is composed of Permian to Lower Cretaceous
intrusions within a basement of metasedimentary rocks of Devonian to Carboniferous age. Volcanic,
volcaniclastic, and marine carbonate rocks represent intra- and back-arc sequences that were deposited during
Early to Mid-Cretaceous.
The Candelaria, Santos, and Alcaparrosa mines are located in the district of Punta del Cobre. The polymetallic
sulphide deposits are hosted in volcanic rocks of the Punta del Cobre Formation. Polymetallic sulphide
deposits in the Punta del Cobre district are located to the east of the main branches of the Atacama fault zone, a
subduction-linked, strike-slip fault system stretching over 1,000 kilometres along the Chilean coast and active
at least since the Jurassic. The dominant structural elements of the Punta del Cobre area are the northeasttrending Tierra Amarilla Anticlinorium, a southeast-verging fold-and-thrust system and a series of northnorthwest- to northwest-trending high-angle faults.
The copper-gold sulphide mineralization found at the Candelaria Copper Mining Complex is generally referred
to as iron oxide copper gold (IOCG) mineralization. The sulphide mineralization occurs in breccias, stockwork
veinlets, disseminations in andesite, and as an internal tuff unit. There are also some localized controls to
mineralization in the form of faults, breccias, veins, and foliation. Candelaria has become an exploration model
for Andean-type IOCG deposits that display close relationships to the plutonic complexes and broadly coeval
fault systems. Depending on lithology and the structural setting, the polymetallic sulphide mineralization can
occur as veins, hydrothermal breccias, replacement mantos, and calcic skarns. The Candelaria IOCG system
lies within the thermal aureole of the Lower Cretaceous magmatic arc plutonic suite in the Candelaria-Punta
del Cobre district.
Exploration Status
Ongoing exploration is conducted by the Candelaria Copper Mining Complex with the primary purpose of
supporting mining and increasing the Mineral Resources and Mineral Reserves available for mining.
Exploration is focused on the known mantos, veins, and breccia masses in proximity to existing underground
September 4, 2015
Page vii
infrastructure. Historically, this strategy has proven very effective in defining new Mineral Resources available
for underground mining. Much of the exploration is conducted from underground, requiring significant
underground development to provide adequate drilling stations. Regional exploration is also undertaken on the
large properties surrounding the mines to identify targets and define new Mineral Resource areas.
From 2010 to 2014, the Minera Candelaria and Minera Ojos del Salado have together invested more than
US$117 million in exploration primarily below the Candelaria open pit, to the north and south, and at the three
underground mines. During the first half of 2015, eight new Mineral Resource models were prepared (two at
Minera Candelaria and six at Minera Ojos del Salado), resulting in a significant expansion of the Mineral
Resources of the underground mines, and contributing to the extension of their life.
Building on this exploration success, ongoing aggressive exploration targets the lateral extensions of the areas
investigated since 2010. The planned exploration program for the period 2015 – 2018 includes approximately
7,240 metres of underground development and 347,000 metres of core drilling at an estimated cost of
approximately US$119 million.
The exploration potential of the Candelaria Copper Mining Complex remains excellent. SRK is of the opinion
that aggressive exploration programs will continue to expand the underground Mineral Resources.
Drilling, Sample Preparation, Analyses, and Security
Mineral Resources are informed from information obtained from surface and underground boreholes. From
1990 to 2014, 2,618 core and percussion boreholes have been drilled in and around the Candelaria open pit
mine. In the Santos mine, approximately 1,097 core boreholes were drilled from 1993 to 2014. For the
Alcaparrosa mine, the borehole database contains information from 972 core boreholes drilled from 1990 to
2014. The drilling and sampling procedures are consistent with generally recognized industry best practices.
SRK concludes that the samples are representative of the source materials and there is no evidence that the
sampling process introduced a bias.
Analytical samples informing the Candelaria Mineral Resource were prepared and assayed at the Candelaria
mine laboratory that is accredited to ISO17025 for the analyses of copper, iron, zinc, and silver. Analytical
samples informing the Ojos del Salado Mineral Resources were prepared and assayed by Intertek (formerly
Vigalab). Conventional preparation and assaying procedures were used. Copper is analyzed by multi acid
digestion and atomic absorption spectroscopy. Gold is assayed using a fire assay procedure. Specific gravity is
systematically measured on core samples.
The Candelaria Copper Mining Complex implements analytical quality control measures consistent with
generally accepted industry best practices. The analytical quality control program includes the use of control
samples inserted with all samples submitted and check assaying by umpire laboratories. The analytical quality
control data are routinely monitored and were audited by AMEC (now Amec Foster Wheeler) in 2013.
In the opinion of SRK, the analytical results delivered by the primary laboratories used are free of apparent
bias. The sampling preparation, security, and analytical procedures used are consistent with generally accepted
industry best practices and are therefore adequate to support Mineral Resource estimation.
Mineral Processing and Metallurgical Testing
The Candelaria Copper Mining Complex maintains regular metallurgical testing programs that are
incorporated with historical testing results and mill performance into a statistical model to predict and improve
the complex’s processing performance in terms of mill throughput, metal recovery to concentrate, and final
concentrate grade. Metallurgical tests are executed in a number of specialized in-house and commercial
facilities. Testing includes rock hardness classification, mineralogy using QEMSCAN technology and bench
scale, and flotation testing that is correlated with industrial scale performance in order to predict mill
throughput and metallurgical performance.
September 4, 2015
Page viii
Mineral Resource and Mineral Reserve Estimates
The Mineral Resources discussed herein are informed from core drilling information stored in a secured central
database, and were evaluated using a geostatistical block modelling approach. Separate models were prepared
for the Candelaria open pit mine and the three underground mines (Candelaria Norte, Santos, and Alcaparrosa)
using slightly different methodologies and assumptions. Each underground mine was sub-divided into sectors
and evaluated using separate block models. In total, 19 distinct block models were created to model the zones
of sulphide mineralization of the Candelaria Copper Mining Complex, including 8 new models since the
acquisition by Lundin.
SRK reviewed and audited the Mineral Resource models prepared by Minera Candelaria and Minera Ojos del
Salado personnel. In the opinion of SRK, the resource evaluation reported herein is a reasonable representation
of the Mineral Resources found at the Candelaria Copper Mining Complex at the current level of sampling.
The Mineral Resources have been estimated in conformity with generally accepted CIM Estimation of Mineral
Resource and Mineral Reserves Best Practices Guidelines and are reported in accordance with Canadian
Securities Administrators’ National Instrument 43-101. The consolidated audited Mineral Resource Statement
for the Candelaria Copper Mining Complex is presented in Table i. Mineral Resources include Mineral
Reserves.
Monthly reconciliation completed at the Candelaria open pit mine between the Mineral Resource model and
grade control models show excellent reconciliation. For the period July 2014 to June 2015, the reconciliation
on grade and produced copper between the long- and short-term models, and between the long-term model and
the mill were approximately 5 percent and 8 percent, respectively.
Table i: Consolidated Audited Mineral Resource Statement*, Candelaria Copper Mining
Complex, SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis)
Quantity
Tonnes
(’000)
Classification
Open Pit
Measured
Indicated
Measured and Indicated
Inferred
Underground
Measured
Indicated
Inferred
WIP**
Measured
Indicated
Inferred
Combined
Measured
Indicated
Inferred
*
Grade
Copper
Gold
(%)
(g/t)
Silver
(g/t)
Contained Metal
Copper
Gold
Silver
Tonnes Ounces Ounces
(’000)
(’000)
(’000)
400,600
31,889
432,489
15,862
0.56
0.48
0.55
0.36
0.13
0.13
0.13
0.11
1.92
1.74
1.91
1.29
2,225
154
2,379
57
1,637
129
1,766
54
24,707
1,787
26,494
658
65,968
51,306
117,274
66,815
1.13
1.12
1.12
1.13
0.26
0.26
0.26
0.25
4.81
5.26
5.01
6.95
745
574
1,319
752
550
428
978
544
10,194
8,682
18,876
14,932
93,849
–
93,849
0.36
–
0.36
0.09
–
0.09
1.49
–
1.49
335
–
335
263
–
263
4,487
–
4,487
560,417
83,195
643,612
82,676
0.59
0.88
0.63
0.98
0.14
0.21
0.15
0.22
2.19
3.91
2.41
5.86
3,305
728
4,033
809
2,450
558
3,007
598
39,387
10,469
49,857
15,589
Reported within the boundaries of the Compañía Contractual Minera Candelaria and Compañía Contractual Ojos del
Salado properties. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. All
figures are rounded to reflect the relative accuracy of the estimates. Mineral Resources include Mineral Reserves.
Open pit Mineral Resources are reported at a cut-off grade of 0.2 percent copper within a conceptual pit shell based
on metal prices of US$3.16 per pound of copper and US$1,000 per ounce of gold, and current topography.
Underground Mineral Resources are reported at a cut-off grade of 0.6 percent copper. Parts of the open pit Mineral
Resources have been converted into underground Mineral Reserves.
** Work-in-progress (WIP) stockpiles
September 4, 2015
Page ix
Mineral Reserves are derived from Measured and Indicated Mineral Resources after applying economic
parameters. The Mineral Reserves have been derived and classified according to the following criteria:


Proven Mineral Reserves are the economically mineable part of the Measured Mineral Resources
where development work for mining and information on processing/metallurgy and other relevant
factors demonstrate that economic extraction is achievable.
Probable Mineral Reserves are those Measured and Indicated Mineral Resources where development
work for mining and information on processing/metallurgy and other relevant factors demonstrate that
economic extraction is achievable.
The consolidated audited Mineral Reserve Statement for the Candelaria Copper Mining Complex is presented
in Table ii. Mineral Reserves are included in Mineral Resources.
Table ii: Consolidated Audited Mineral Reserve Statement*, Candelaria Copper Mining
Classification
Open Pit
Proven
Probable
Total
WIP**
Proven
Probable
Total
Underground
Proven
Probable
Total
Combined
Proven
Probable
Total
*
Quantity Copper
(’000 t)
(%)
Grade
Gold
(g/t)
Contained Metal
Silver Copper
Gold
Silver
(g/t) (’000 t) (’000 oz) (’000 oz)
298,153
16,429
314,582
0.57
0.52
0.57
0.13
0.14
0.13
2.00
1.94
1.99
1,699
85
1,784
1,246
72
1,317
19,137
1.0236
20,160
93,849
–
93,849
0.36
–
0.36
0.09
–
0.09
1.49
–
1.49
335
–
335
263
–
263
4,487
–
4,487
33,025
13,727
46,753
0.98
0.93
0.97
0.23
0.21
0.22
4.03
5.15
4.36
325
127
452
240
94
335
4,284
2,271
6,555
425,028
30,156
455,184
0.56
0.70
0.56
0.13
0.17
0.13
2.04
3.40
2.13
2,359
212
2,571
1,749
166
1,915
27,908
3,294
31,202
Mineral Reserves are included in Mineral Resources. Mineral Reserves have been prepared using
metal prices of US$2.75 per pound of copper, US$1,000 per ounce of gold, and US$15.00 per
ounce of silver. All figures have been rounded to reflect the relative accuracy of the estimates.
Minera Candelaria Mineral Reserves for open pit and underground are reported at cut-off grades of
0.23 and 0.70 percent copper, respectively. Underground Mineral Reserves for Alcaparrosa and
Santos are reported at cut-off grades of 0.76 and 0.73 percent copper, respectively. Parts of
underground Mineral Reserves have been converted from open pit Mineral Resources.
Mining Methods
The Candelaria open pit mine operates with an overall mining rate of approximately 235,000 tonnes per day
including 66,000 tonnes per day of ore sent to the Candelaria processing plant. The average grade of the ore
that will be mined from the open pit over the remaining life of mine is estimated at 0.57 percent copper, while
stockpiled work-in-progress (WIP) material is estimated to have an average grade of 0.36 percent copper. The
mine operates seven electric shovels, 46 haulage trucks, eight production drills, and a fleet of support
equipment.
The Candelaria Norte underground mine currently produces 6,000 tonnes per day of ore but is planned to ramp
up to 7,250 tonnes per day by year 2019 with an average grade of 0.96 percent copper estimated in the life of
mine plan. The Alcaparrosa underground mine produces 4,000 tonnes per day of ore with an average grade of
0.94 percent copper. The Santos underground mine produces 3,750 tonnes per day of ore with an average grade
of 1.04 percent copper estimated over the remaining life of mine.
September 4, 2015
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The life of mine plan for the Candelaria Copper Mining Complex is largely driven by supplying ore to the
Candelaria processing plant from the open pit mine and surface stockpiles once the open pit Mineral Reserves
have been depleted. The open pit and stockpile Proven and Probable Mineral Reserves are estimated at
408.4 million tonnes at an average grade of 0.52 percent copper, 0.12 gram of gold per tonne (g/t gold), and
1.88 g/t silver.
The open pit was designed to be mined in several phases of development. As of June 2015, five phases of
development remain in the life of mine plan (Phases 9 to 13). The overall strip ratio is 2.8:1 excluding
stockpiles. The total in-pit waste is 882.9 million tonnes. The overall life of the open pit mine is 17 years.
The three underground mines (Candelaria Norte, Santos, and Alcaparrosa) utilize a sublevel stoping mining
method for ore extraction. This method is ideal for relatively large, vertical, as well as thick deposits with
favourable and stable host rock. Stopes can typically be up to 100 metres high with sublevels at 25 to 50 metre
intervals. The length of the stopes is generally 80 metres with widths varying between 20 to 30 metres. Stopes
are drilled down from the sublevel drilling drifts as benches using 4.5 inch diameter down-the-hole (DTH)
holes. The holes are loaded and blasted in vertical slices towards an open face. The blasted ore gravitates to the
bottom of the stope and is collected through drawpoints at the production level below. Ore is mucked from the
drawpoints using surface-type front-end loaders and LHDs (load haul dump). The mucked ore is dumped into
30-ton highway type trucks and hauled up the ramp to a surface stockpile for subsequent re-handling and
processing. The current mine lives of the Candelaria Norte, Alcaparrosa, and Santos mines are 13, 7, and 7
years, respectively.
For 2016, the Candelaria Copper Mining Complex expects to produce 154 kilotonnes of copper, 90 kilo ounces
of gold and 1.8 million ounces of silver. Over the remaining life of mine plan (to 2032), the average annual
production is estimated to be 138 kilotonnes of copper, 84 kilo ounces of gold and 1.5 million ounces of silver.
Recovery Methods
The Candelaria processing plant receives ore from the Candelaria open pit and the Candelaria Norte and
Alcaparrosa underground mines. It has a nameplate capacity of 75,000 tonnes per day. The PAC processing
plant receives ore from the Santos underground mine and has a design capacity of 3,800 tonnes per day.
Historical performance of the Candelaria processing plant from 2000 to 2014 has averaged 25 million tonnes
per year, equivalent to approximately 68,600 tonnes per day with utilization of 93 percent. During this period,
metallurgical recovery averaged 94 percent for copper, 75 percent for gold, and 85 percent for silver.
The Candelaria processing plant flowsheet is conventional, comprising two parallel process lines for grinding
and flotation, reclaimed process water from a conventional tailings dam, final concentrate filtration, and
shipping of bulk copper concentrates. Run of mine ore is trucked to a primary gyratory crusher. Grinding takes
place in a multi-stage closed circuit using semi-autogenous grinding (SAG) mills, ball mills, and pebble
crushing. A multi-stage flotation circuit using an arrangement of mechanical cells, regrind mills, and column
cells produces copper concentrate. Final flotation copper concentrate with gold and silver by-product metals is
thickened, filtered, and stored on site. Final flotation tails are conventionally thickened and disposed of in a
rockfill embankment tailings storage facility. Process water is reclaimed from the tailings dam for reuse in the
processing plant. Overall the fresh make-up water ratio is exceptionally low (0.34 cubic metre per tonne of
fresh ore in 2012).
The PAC processing plant has been in operation since 1929. The plant processes 3,800 tonnes per day of fresh
feed from the Santos underground mine with an average historical head grade of 0.85 percent copper and a
copper recovery of 94 percent. The gold and silver recoveries are 72 percent.
The PAC processing plant flowsheet comprises a closed-circuit crushing plant including a primary jaw crusher,
a secondary cone crusher, and two tertiary cone crushers. The grinding circuit has three ball mills operating in
parallel and in direct closed-circuit with hydro-cyclone classification. The flotation plant uses conventional
multi-stage, mechanical, self-aspired and forced-air flotation cells, regrind milling, and column cells for the
final concentrate cleaning stage. The final concentrate is thickened and filtered using a ceramic disc filter.
Final flotation tailings from the PAC plant are pumped to the main Candelaria tailings storage facility.
September 4, 2015
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Copper concentrates containing precious metals are trucked to the Punta Padrones port, near Caldera. In 2016,
the typical Candelaria copper concentrate is expected to average 29.9 percent copper, 5.4 g/t gold, and
112 g/t silver with a moisture content of 7.6 percent after filtration. The copper concentrate of the PAC plant is
expected to average 29.5 percent copper, 5.1 g/t gold, and 82 g/t silver.
Minera Candelaria has an agreement with a third party company to process Candelaria’s flotation tailings to
produce a magnetite concentrate and this produces an additional source of by-product revenue.
The current Candelaria tailings storage facility receives the flotation tails from the Candelaria and PAC
processing plants. The Candelaria flotation tails are thickened and then pumped to the tailings storage facility
at an average solids concentration of 50.1 percent. The PAC flotation tails are pumped unthickened at an
average concentration of 35.3 percent. The remaining tailings storage capacity is estimated at 36 million cubic
metres, sufficient to receive tailings until the end of 2017 at the current production throughput.
A new tailings storage facility, known as Los Diques, has been designed to replace the Candelaria tailings
storage facility. The Los Diques facility will be located to the southwest of the open pit and plant sites and will
have an approximate designed capacity of 600 million tonnes, more than what is required by the current
projected mine life. The Los Diques tailings management facility is a key part of the “Candelaria 2030 Project Operational Continuity” (Candelaria 2030) environmental impact assessment that was submitted to the
environmental authorities in September 2013 and was approved on July 23, 2015.
To mitigate the risk that permitting and construction of Los Diques is not completed before reaching the
capacity of the existing tailings facility, Minera Candelaria is implementing a plan to reduce the permitted
freeboard of the existing facility, thereby gaining approximately 14 months of additional storage capacity. The
application for the permit modifications was submitted on July 29, 2015. Additionally, alternatives are being
developed to maximize the available capacity in the existing tailings facility, including but not limited to cell
deposition techniques.
Project Infrastructure
The Minera Candelaria infrastructure includes:









Candelaria open pit mine with a capacity of approximately 270,000 tonnes of rock per day
Surface waste dumps located to the north and southwest of the Candelaria open pit
Candelaria processing plant with a nameplate capacity of 75,000 tonnes per day
Candelaria Norte underground mine with an ore capacity of 6,000 tonnes per day (ramping up to
7,250 tonnes per day in 2019)
Candelaria tailings facility located northwest of the Candelaria open pit
Ancillary mine services and administrative buildings and road accesses
Off-site Punta Padrones port located at Caldera with a 45,000 wet metric tonne designed storage
capacity and 1,000 wet metric tonnes per hour loading capacity
Desalination plant adjacent to the port facility commissioned in January 2013 with a capacity of
500 litres per second and the related aqueduct to connect to the Bodega pump station (80 kilometres)
Pipeline from the Bodega pump station to the Candelaria plant site (40 kilometres)
The Minera Ojos del Salado infrastructure includes:




Alcaparrosa underground mine with an ore capacity of 4,000 tonnes per day
Santos underground mine with an ore capacity of 3,800 tonnes per day
PAC processing plant with a capacity of 3,800 tonnes per day
Ancillary surface service buildings and road accesses
September 4, 2015
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Market Studies
The quality of the copper concentrates produced by the Candelaria Copper Mining Complex is excellent. They
are considered to be clean and have very low contents of deleterious elements. The copper concentrates have
significant by-product credits of gold and silver. From a technical specification standpoint, the copper
concentrates have no limitations and can be treated at all copper smelters worldwide. The Candelaria copper
concentrate is sold under four long-term contracts expiring from 2016 to 2018. The concentrate is shipped
from the Punta Padrones port facility to destinations in Europe, China, Japan, Korea, India, and Brazil. The
Ojos del Salado copper concentrates are currently sold under two long-term contracts based on standard annual
contract terms, expiring in 2017 and 2018, for delivery to Chile and Japan.
Environmental Studies, Permitting, and Social or Community Impact
The Candelaria Copper Mining Complex currently operates with all applicable permits in place and its
environmental management system is accredited to ISO 14001 and its health and safety management system
under OSHAS 18001 standards. Comprehensive social programs have been developed.
The original Minera Candelaria project underwent a voluntary process of environmental assessment. The
project was approved under ORD. N ° 817 on June 9, 1992 and began operations on March 9, 1995. Since that
time, the operations have undergone a series of environmental assessment processes to support the evolving
development plans for this project. The most recent environmental assessment process was initiated in
September 2013 with the submittal of an Environmental Impact Study (Estudio de Impacto Ambiental, EIA) to
extend the operating life of the facilities until 2030 and to permit the Los Diques tailings storage facility. The
Candelaria 2030 EIA received approval with conditions on 23 July, 2015. None of the conditions of approval
represent risks to the technical or economic feasibility of the operation.
At Minera Ojos del Salado, the Santos mine and the PAC plant began operating before 1994, at a time when
Chile did not have rigorous environmental laws in place. The Alcaparrosa mine received its original
environmental approval in 1996 with subsequent amendments in 1999 and 2005. The PAC processing plant
receives ore from the Santos mine, and the tailings are deposited in the Candelaria tailings facility according to
a resolution granted to Minera Candelaria (RCA No. 004/1997). Ore from the Alcaparrosa mine is shipped to
the Candelaria processing plant as approved by a resolution granted to Minera Candelaria
(RCA No. 012/2005).
The Alcaparrosa mine’s environmental permit expires at the end of 2015. Minera Ojos del Salado has applied
to extend the existing environmental approval for an additional two years, to the end of 2017. The authorities
have not yet responded to the extension request. If a new environmental assessment is required for beyond
2015, it is possible that the Alcaparrosa mine may be faced with temporary closure. In such case stockpiled ore
from Candelaria will be used to make up the plant feed difference until a new environmental permit is granted.
In May 2015, Minera Candelaria received from the Superintendent of Environment an Extent Resolution
N°1/ROL D-018-2015 pointing to 16 environmental non-compliances, eight of which were classified as
serious. There is a risk that Minera Candelaria could receive significant fines for some of the non-compliances.
However, SRK is of the opinion that none of the non-compliances have caused serious environmental impacts,
and most of them can be managed through the activities required as part of the Candelaria 2030 project.
Candelaria is addressing these non-compliances with the authorities. The process is ongoing but it is possible
that fines may be charged to Minera Candelaria. SRK is of the opinion that the fines, if any, will be
significantly below the maximum allowable fine limits, and will not be material.
Since acquiring the operations, Lundin has committed new social investments including continued support and
further development of the new community office in Tierra Amarilla with infrastructure to support the
relationship with stakeholders, including housing projects, employment programs, donation of land for a drug
prevention centre, secondary education and sporting programs, the creation of a fund to support artisanal
fisheries in Caldera, the repair of the technical secondary school in Tierra Amarilla, and the implementation of
grievance mechanisms and a stakeholder engagement process.
September 4, 2015
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The updated Minera Candelaria closure plan was approved by Servicio Nacional de Geología y Minería
(SERNAGEOMIN) through Resolution No. 1883 of July 2015. The updated closure plan for Ojos del Salado,
including closure cost estimates, was approved by SERNAGEOMIN on May 16, 2014. The legacy facilities
(old tailings and slag deposit) have already been closed and remediated.
Capital and Operating Costs
The average open pit mining cost over the next four years (2016 – 2019), excluding the impact of capitalized
waste stripping, is estimated to be US$2.80 per tonne of material moved, with annual fluctuations. Total
mining costs include ore and waste stripping, with the quantities of waste to be moved over the next four years
being particularly high. The biggest portion of the open pit mining cost is supplies (explosives, drill tools, tires,
maintenance supplies) at approximately 40 percent and energy (diesel fuel and electricity) at 28 percent.
The average underground mining cost over the next four years at Candelaria Norte is expected to be US$20.90
per tonne, with overall costs falling as production decreases in the last year of operations. Contractor costs
make up some 80 percent of the total mining costs. The forecast average Ojos del Salado unit underground
mining cost over the next four years is approximately US$20.60 per tonne. Total underground mining costs are
currently forecast to decrease as production diminishes from Candelaria Norte, Alcaparrosa, and then Santos.
There is a strong likelihood that exploration success will lead to an extension of the lives of the underground
mines.
The forecast average unit processing cost of the Candelaria processing plant over the next four years is
US$8.00 per tonne, slightly lower in 2016 and 2017 because of higher throughput and the treatment of surface
stockpile material. Electrical energy, at approximately 42 percent, and operating supplies (grinding media,
reagents, maintenance spares), at approximately 35 percent, are the biggest cost items.
The average processing cost for Minera Ojos del Salado over the next four years is expected to be US$10.20
per tonne. This is a combination of the costs for treating the Santos ore at the PAC plant and the Alcaparrosa
ore at the Candelaria plant.
Minera Candelaria unit general and administrative cost (G&A) over the next four years is expected to be
US$1.80 per tonne. For Minera Ojos del Salado, the average unit G&A cost over the next four years is
expected to be US$2.10 per tonne.
For 2016, the forecast combined Candelaria Copper Mining Complex C1 cash operating cost is US$1.58 per
pound of copper net of by-product credits and the effect of the Franco-Nevada gold and silver streaming
agreement. Life of mine C1 cash costs are forecast to be approximately US$1.54 per pound of copper net of
by-product credits and the Franco-Nevada gold and silver streaming agreement. Fluctuations in the cash cost
are largely driven by the changes in the copper head grade in the open pit, and hence copper metal production,
over the life of mine.
At Minera Candelaria, total capital expenditures over the period 2016 to 2019, excluding capitalized waste
stripping, are forecast at US$459.5 million and from 2020 to 2024 at US$298.2 million. The main capital
project is the construction of the new Los Diques tailings storage facility, expected to start in 2015 and be
ready to receive its first tailings in early 2018. From 2018, the capital cost includes conventional raises to the
dam and extensions to the distribution systems. Mill capital costs include sustaining items to upgrade control
systems and equipment replacements in the Candelaria processing plant. G&A capital costs include the final
lift to the existing tailings dam as well as a number of environmental and local community initiatives. The
forecast capital expenditure for Minera Ojos del Salado over the same period is US$2.6 million, with no
expenditures expected from 2017 onward.
During the production phase of the Candelaria open pit mine, waste stripping costs which provide probable
future economic benefits and improved access to the orebody are capitalized to mineral properties. Lundin
capitalizes waste stripping costs when experienced strip ratios are above the average planned strip ratio for
each open pit phase under development. Capitalized waste stripping from the open pit is forecast to be
US$436 million for the period 2016 to 2019, and US$470 million between 2020 and 2024.
September 4, 2015
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Economic Analysis
Producing issuers may exclude the information required under Economic Analysis (Item 22 of
Form 43-101F1) for technical reports on properties currently in production unless the technical report includes
a material expansion of current production.
Conclusion and Recommendations
The Candelaria Copper Mining Complex is a world class long life copper mining operation with potential to
further extend the operating life. In 2014, the operations’ combined production was 155 kilotonnes of copper,
87,000 ounces of gold, and 1.4 million ounces of silver.
The technical information about the Candelaria Copper Mining Complex is extensive and attests to the high
overall quality of the exploration, mine planning, design work and operational reporting completed by site
personnel, as is expected from a world class asset. SRK examined the exploration, geology and Mineral
Resource modelling, mine designs, Mineral Reserve estimates, processing, and environmental aspects of the
Candelaria Copper Mining Complex. On the basis of the results from the audit samples, SRK concludes that
the Mineral Resource and Mineral Reserve Statements for the Candelaria Copper Mining Complex as of June
30, 2015 are appropriately categorized and free of material errors. Financial information examined by SRK
confirms that the Mineral Reserves are economic under the assumptions considered.
The Candelaria Copper Mining Complex has a life of mine projected to 2032 with the depletion of the Mineral
Reserves disclosed herein. Since 2010, aggressive exploration has defined several new sulphide mineralization
zones amenable to underground mining that offer a very good opportunity to expand the Mineral Reserves and
extend the lives of the underground mines.
In this context, SRK strongly recommends that, if market conditions allow for discretionary expenditures on
exploration, Lundin continues and, if possible, accelerates the implementation of the aggressive exploration
program proposed to 2018. Furthermore, rapid modelling of the Mineral Resources discovered by exploration
should continue to allow the conversion to underground Mineral Reserves and updating of the life of mine plan
and thus enable timely permitting. The regional exploration potential of the large exploration properties
remains excellent. Regional exploration targeting should continue, including the use of high resolution
geophysical data to enhance exploration targeting.
Presently, the three underground mines are not interconnected. Conceptual plans envision connecting the Ojos
del Salado underground mines with Candelaria Norte with access to the new Susana and Damiana sulphide
zones. This interconnection would greatly facilitate material movement and provide additional access for deep
exploration. SRK is of the opinion that this proposed interconnection has merit and should be studied further.
The environmental permit for the Alcaparrosa mine expires at the end of 2015. Minera Ojos del Salado has
applied for an extension of the existing permits to continue to operate Alcaparrosa. If by the end of 2015, a
new permit or extension is not in place, the Alcaparrosa mine may be faced with temporary closure and in
which case stockpiled ore from Candelaria will be used to make up the plant feed difference until a new
environmental permit is granted.
In May 2015, Minera Candelaria received from the Superintendent of Environment notification of 16
environmental non-compliance charges, eight of which were classified as serious. There is a risk that Minera
Candelaria could receive fines for some of the non-compliances. SRK is of the opinion, however, that none of
the non-compliances have caused serious environmental impacts, and that most can be managed through the
activities required as part of the Candelaria 2030 project. SRK believes that the fines, if any, will not be
material to the company.
September 4, 2015
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Table of Contents
IMPORTANT NOTICE ........................................................................................................ ii Executive Summary ......................................................................................................... iii Property Description and Ownership .......................................................................................... iii History ......................................................................................................................................... vi Geology, Mineralization, and Deposit Types .............................................................................. vi Exploration Status ....................................................................................................................... vi Drilling, Sample Preparation, Analyses, and Security ............................................................... vii Mineral Processing and Metallurgical Testing ........................................................................... vii Mineral Resource and Mineral Reserve Estimates ................................................................... viii Mining Methods .......................................................................................................................... ix Recovery Methods .......................................................................................................................x Project Infrastructure .................................................................................................................. xi Market Studies ........................................................................................................................... xii Environmental Studies, Permitting, and Social or Community Impact ....................................... xii Capital and Operating Costs ..................................................................................................... xiii Economic Analysis .................................................................................................................... xiv Conclusion and Recommendations .......................................................................................... xiv Table of Contents ............................................................................................................ xv List of Tables .................................................................................................................. xix List of Figures................................................................................................................. xxi 1 Introduction and Terms of Reference ........................................................................ 1 1.1 1.2 1.3 1.4 Terms of Reference ........................................................................................................... 1 Qualification of SRK .......................................................................................................... 2 Basis of Technical Report.................................................................................................. 3 Declaration ........................................................................................................................ 4 2 Reliance on Other Experts .......................................................................................... 5 3 Property Description and Location ............................................................................ 6 3.1 Mineral Tenure .................................................................................................................. 6 3.1.1 Minera Candelaria................................................................................................................ 6 3.1.2 Minera Ojos del Salado ....................................................................................................... 8 3.2 Water Use Rights .............................................................................................................. 8 3.3 Mineral Rights in Chile....................................................................................................... 9 3.3.1 Exploration Concessions ..................................................................................................... 9 3.3.2 Exploitation Concessions ................................................................................................... 10 4 Accessibility, Climate, Local Resources, Infrastructure, and Physiography ....... 11 4.1 4.2 4.3 4.4 Accessibility ..................................................................................................................... 11 Local Resources and Infrastructure................................................................................. 11 Climate ............................................................................................................................ 11 Physiography ................................................................................................................... 12 5 History ........................................................................................................................ 14 6 Geological Setting and Mineralization ..................................................................... 16 6.1 Regional Geology ............................................................................................................ 16 6.2 Local Geology.................................................................................................................. 16 SRK Team / cs – sk
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6.3 Property Geology............................................................................................................. 17 6.3.1 Geology of the Candelaria Mine ........................................................................................ 17 6.3.2 Geology of the Santos Mine .............................................................................................. 19 6.3.3 Geology of the Alcaparrosa Mine ...................................................................................... 20 6.4 Mineralization .................................................................................................................. 21 6.4.1 Mineralization at the Candelaria Mine ............................................................................... 21 6.4.2 Mineralization at the Santos Mine...................................................................................... 21 6.4.3 Mineralization at the Alcaparrosa Mine.............................................................................. 21 7 Deposit Types ............................................................................................................ 22 8 Exploration ................................................................................................................. 23 8.1 SRK Comments ............................................................................................................... 28 9 Drilling ........................................................................................................................ 29 9.1 Drilling at Candelaria ....................................................................................................... 29 9.2 Drilling at Ojos del Salado ............................................................................................... 31 9.2.1 Santos Mine ....................................................................................................................... 31 9.2.2 Alcaparrosa Mine ............................................................................................................... 31 9.3 Sampling Method and Approach ..................................................................................... 32 9.4 SRK Comments ............................................................................................................... 32 10 Sample Preparation, Analyses, and Security .......................................................... 33 10.1 Historical Samples ........................................................................................................... 33 10.2 Core Samples (1985 to Present) ..................................................................................... 33 10.2.1 Mineral Candelaria ............................................................................................................. 33 10.3 Specific Gravity Data ....................................................................................................... 34 10.4 Quality Assurance and Quality Control Programs ........................................................... 34 10.4.1 Historical Analytical Quality Control at Alcaparrosa .......................................................... 34 10.4.2 Analytical Quality Control (1985 to Present) ...................................................................... 34 10.5 Sample Security .............................................................................................................. 35 10.6 SRK Comments ............................................................................................................... 35 11 Data Verification ........................................................................................................ 36 11.1 Verifications by the Candelaria Copper Mining Complex ................................................ 36 11.2 Verifications by SRK ........................................................................................................ 36 11.2.1 Site Visit ............................................................................................................................. 36 11.2.2 Review of Exploration Data and Mineral Resource Models .............................................. 37 12 Mineral Processing and Metallurgical Testing ........................................................ 38 12.1 Metallurgical Testing at the Candelaria Processing Plant ............................................... 38 12.2 Mineralogy ....................................................................................................................... 39 13 Mineral Resource Estimates ..................................................................................... 41 13.1 Introduction ...................................................................................................................... 41 13.2 Resource Estimation Procedures .................................................................................... 41 13.2.1 Introduction ........................................................................................................................ 41 13.2.2 Open Pit ............................................................................................................................. 41 13.2.3 Underground ...................................................................................................................... 42 13.3 SRK Comments ............................................................................................................... 45 13.4 Mineral Resource Statement ........................................................................................... 45 13.5 Reconciliation .................................................................................................................. 48 14 Mineral Reserve Estimates ....................................................................................... 49 14.1 Minera Candelaria ........................................................................................................... 49 14.1.1 Candelaria Open Pit Mineral Reserves ............................................................................. 49 14.1.2 Candelaria Norte Underground Mineral Reserves ............................................................ 53 SRK Team / cs – sk
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14.2 Minera Ojos del Salado ................................................................................................... 55 14.3 Mineral Reserve Statement ............................................................................................. 56 15 Mining Methods ......................................................................................................... 58 15.1 15.2 15.3 15.4 15.5 15.6 Introduction ...................................................................................................................... 58 Open Pit Mine Design and Production Schedule ............................................................ 59 Underground Mine Design and Production Schedule ..................................................... 67 Underground Mine Plan................................................................................................... 71 Waste Dumps .................................................................................................................. 72 Mine Equipment............................................................................................................... 72 15.6.1 Open Pit Mine Equipment .................................................................................................. 72 15.6.2 Underground Mine Equipment ........................................................................................... 73 16 Recovery Methods..................................................................................................... 75 16.1 Minera Candelaria Plant .................................................................................................. 75 16.1.1 Processing Flowsheet ........................................................................................................ 76 16.1.2 Reagents ............................................................................................................................ 78 16.1.3 Magnetite Recovery ........................................................................................................... 78 16.2 Ojos del Salado PAC Plant.............................................................................................. 79 16.3 Candelaria Tailings Storage Facility ................................................................................ 81 16.4 Los Diques Tailings Facility (Proposed) .......................................................................... 81 17 Project Infrastructure ................................................................................................ 83 17.1 17.2 17.3 17.4 Candelaria Copper Mining Complex ................................................................................ 83 Power Supply .................................................................................................................. 83 Punta Padrones Port Facilities ........................................................................................ 84 Fresh Water Supply ......................................................................................................... 84 18 Market Studies and Contracts .................................................................................. 86 19 Environmental Studies, Permitting, and Social or Community Impact ................ 87 19.1 Environmental Studies and Background Information ...................................................... 87 19.2 Permitting and Compliance ............................................................................................. 87 19.2.1 Environmental Approvals ................................................................................................... 87 19.2.2 Sectorial Permits ................................................................................................................ 90 19.2.3 Compliance Management .................................................................................................. 91 19.3 Environment Management .............................................................................................. 94 19.3.1 Key Environmental Issues ................................................................................................. 94 19.3.2 Environmental Management System ................................................................................. 95 19.4 Closure ............................................................................................................................ 97 19.5 Social and Communities .................................................................................................. 98 20 Capital and Operating Costs .................................................................................... 99 20.1 Operating Costs............................................................................................................... 99 20.1.1 Mining Operating Costs ..................................................................................................... 99 20.1.2 Processing Operating Costs ............................................................................................ 101 20.1.3 General and Administrative Costs ................................................................................... 103 20.1.4 C1 Cash Costs ................................................................................................................. 104 20.2 Capital Costs ................................................................................................................. 105 21 Economic Analysis.................................................................................................. 107 22 Adjacent Properties................................................................................................. 108 23 Other Relevant Data and Information .................................................................... 109 24 Interpretation and Conclusions.............................................................................. 110 SRK Team / cs – sk
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25 Recommendations .................................................................................................. 112 26 References ............................................................................................................... 113 APPENDIX A .................................................................................................................. 114 APPENDIX B .................................................................................................................. 119 APPENDIX C .................................................................................................................. 130 Signature Page .............................................................................................................. 133 SRK Team / cs – sk
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List of Tables
Table i: Consolidated Audited Mineral Resource Statement*, Candelaria Copper Mining Complex,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis) ..........................................................viii Table ii: Consolidated Audited Mineral Reserve Statement*, Candelaria Copper Mining Complex, SRK
Consulting (Canada) Inc., June 30, 2015 (100% Basis) ................................................................... ix Table 1: Responsibility of Feasibility Technical Report Sections ....................................................................... 2 Table 2: Qualified Persons ................................................................................................................................. 3 Table 3: Royalty Characteristics for Candelaria Tenements .............................................................................. 8 Table 4: Payable Metal in Concentrate (100% Basis) ...................................................................................... 15 Table 5: Summary Development History of the Candelaria Copper Mining Complex ..................................... 15 Table 6: Summary of 2015 to 2018 Exploration Program ................................................................................ 27 Table 7: Summary of Drilling Activities at Candelaria Mine (Open Pit and Underground) ............................... 29 Table 8: Summary of Drilling Activities Completed at the Santos Mine ........................................................... 31 Table 9: Summary of Drilling Activities Completed at the Alcaparrosa Mine ................................................... 31 Table 10: Rock Hardness Classification ........................................................................................................... 38 Table 11: Classification Parameters (Open Pit and Underground) .................................................................. 42 Table 12: Underground Interpolation Data and Parameters for Candelaria ..................................................... 43 Table 13: Underground Interpolation Data and Parameters for Candelaria Norte ........................................... 43 Table 14: Underground Interpolation Data and Parameters for Alcaparrosa ................................................... 44 Table 15: Underground Interpolation Data and Parameters for Santos ........................................................... 44 Table 16: Audited Mineral Resource Statement*, Compañía Contractual Minera Candelaria,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis) .......................................................... 46 Table 17: Audited Mineral Resource Statement*, Compañía Contractual Minera Ojos del Salado,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis) .......................................................... 46 Table 18: Consolidated Audited Mineral Resource Statement*, Candelaria Copper Mining Complex,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis) .......................................................... 47 Table 19: Monthly Reconciliation between Long Short Term Models and the Mill for the Candelaria
Open Pit, Compañía Contractual Minera Candelaria (July 2014 to June 2015) .............................. 48 Table 20: Summary of Pit Optimization Parameters ........................................................................................ 50 Table 21: Summary of Candelaria Norte Mineral Reserve Parameters ........................................................... 54 Table 22: Summary of Santos and Alcaparrosa Mineral Reserve Parameters................................................ 55 Table 23: Audited Mineral Reserve Statement*, Compañía Contractual Minera Candelaria,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis) .......................................................... 56 Table 24: Audited Mineral Reserve Statement*, Compañía Contractual Minera Ojos del Salado,SRK
Consulting (Canada) Inc., June 30, 2015 (100% Basis) .................................................................. 57 Table 25: Consolidated Audited Mineral Reserve Statement*, Candelaria Copper Mining Complex,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis) .......................................................... 57 Table 26: Candelaria Copper Mining Complex Mine Production Schedule (100% Basis)............................... 62 Table 27: Summary of Stope Setting................................................................................................................ 70 SRK Team / cs – sk
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Table 28: Underground Mineral Reserve Schedule ......................................................................................... 71 Table 29: Waste Dump Capacity ...................................................................................................................... 72 Table 30: Underground Mining Equipment ....................................................................................................... 74 Table 31: Major Processing Equipment and Systems at Minera Candelaria ................................................... 78 Table 32: List of Processing Plant Reagents and Consumptions .................................................................... 78 Table 33: Candelaria Fresh Water Supply Wells ............................................................................................. 85 Table 34: Minera Candelaria Environmental Approvals (RCAs*) ..................................................................... 88 Table 35: Changes of Candelaria Approved Under Pertinencia ...................................................................... 88 Table 36: Summary of Minera Ojos del Salado Approvals (RCAs*) ................................................................ 90 Table 37: Minera Ojos del Salado Changes Approved Under Pertinencia ...................................................... 90 Table 38: Charges to Minera Candelaria from the Superintendence of Environment ..................................... 92 Table 39: Environmental Monitoring Program .................................................................................................. 96 Table 40: Actual and Forecast Unit Operating Costs ....................................................................................... 99 Table 41: Forecast of Candelaria Open Pit Mining Costs .............................................................................. 100 Table 43: Forecast of Operating Cost for Candelaria Underground Operations ............................................ 100 Table 44: Forecast of Operating Cost for Ojos del Salado Underground Operations .................................... 101 Table 45: Forecast of Candelaria Processing Cost ........................................................................................ 101 Table 46: Forecast of Ojos del Salado Processing Cost ................................................................................ 102 Table 47: Forecast of Candelaria General and Administration Cost .............................................................. 103 Table 48: Forecast of Ojos del Salado General and Administration Cost ...................................................... 103 Table 48: C1 Copper Cash Costs (Net of By-Projects) .................................................................................. 104 Table 49: Forecast Capital Investment Plan for Minera Candelaria ............................................................... 105 Table 50: Forecast Capital Investment Plan for Minera Ojos del Salado....................................................... 106 SRK Team / cs – sk
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List of Figures
Figure i: Location of the Mines Comprising the Candelaria Copper Mining Complex ....................................... iv Figure ii: The Infrastructures of the Candelaria Copper Mining Complex .......................................................... v Figure 1: Location of the Mines of the Candelaria Copper Mining Complex ...................................................... 6 Figure 2: Candelaria and Ojos del Salado Land Tenure Map ............................................................................ 7 Figure 3: Infrastructure and Landscape in the Project Area ............................................................................. 12 Figure 4: Candelaria Copper Mining Complex and Related Infrastructure ...................................................... 13 Figure 5: Regional Geology Setting Around the Candelaria, Alcaparrosa, and Santos Mines ........................ 17 Figure 6: Schematic Vertical Section Showing the Location of the Candelaria and Santos Mines (see
Figure 4 for section location) ............................................................................................................ 18 Figure 7: Local Geology Setting of the Candelaria Mine .................................................................................. 18 Figure 8: Local Geology Setting of the Santos Mine ........................................................................................ 19 Figure 9: Local Geology Setting of the Alcaparrosa Mine ................................................................................ 20 Figure 10: Schematic Section Through IOCG and Magmatic Systems ........................................................... 22 Figure 11: Exploration Areas at the Candelaria Underground Mine ................................................................ 24 Figure 12: Exploration Areas at the Alcaparrosa Mine ..................................................................................... 25 Figure 13: Exploration Areas at the Santos Mine ............................................................................................. 26 Figure 14: Location of the Collars of the Boreholes Drilled on the Candelaria Copper Mining Complex ........ 30 Figure 15: Structure of Throughput Forecasting Model.................................................................................... 39 Figure 16: Typical Mill Feed Mineralogy (QEMSCAN Analysis)....................................................................... 39 Figure 17: Candelaria Open Pit Sectors Geotechnical Design Recommendations ......................................... 52 Figure 18: Candelaria Mining Phases .............................................................................................................. 53 Figure 19: Summary of Candelaria Open Pit Mine Development .................................................................... 59 Figure 20: Slope Sectors Rock Quality Designation for Phase 9 (Left) and Phase 11 (right).......................... 60 Figure 21: Candelaria Life of Mine Plan Development Process ....................................................................... 61 Figure 22: Candelaria Open Pit Production Schedule...................................................................................... 63 Figure 23: Annual Development Plan for 2016 (top) and 2017 (bottom) ......................................................... 64 Figure 24: Annual Development Plan for 2024 (top) and 2026 (bottom) ......................................................... 65 Figure 25: Annual Development Plan for 2029 (top) and 2031 (bottom) ......................................................... 66 Figure 26: Candelaria Norte Mine Layout and Sectors .................................................................................... 67 Figure 27: Candelaria Norte Mine Showing the Layout of the Damiana and Susana Sectors ........................ 67 Figure 28: Santos Mine Layout and Sectors .................................................................................................... 68 Figure 29: Alcaparrosa Mine Layout and Sectors ............................................................................................ 68 Figure 30: Candelaria Life of Mine Plan Development Process ....................................................................... 69 Figure 31: Typical Sublevel Open Stope .......................................................................................................... 70 Figure 32: Historical Performance – Candelaria Processing Capacity ............................................................ 75 SRK Team / cs – sk
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Figure 33: Historical Performance – Candelaria Metallurgical Performance ................................................... 76 Figure 34: Minera Candelaria Flowsheet.......................................................................................................... 77 Figure 35: Ojos del Salado Flowsheet – Crushing Plant .................................................................................. 79 Figure 36: Ojos del Salado Flowsheet – Grinding Plant ................................................................................... 80 Figure 37: Ojos del Salado Flowsheet – Flotation Plant .................................................................................. 80 Figure 38: Desalination Plant Location and Pipeline to Candelaria Site .......................................................... 85 SRK Team / cs – sk
September 4, 2015
1
Page 1
Introduction and Terms of Reference
The Candelaria Copper Mining Complex comprises two adjacent copper operations producing
copper concentrates from open pit and underground mines located near Copiapó in the Atacama
Province, Region III of Chile: Compañía Contractual Minera Candelaria (Minera Candelaria) and
Compañía Contractual Minera Ojos del Salado (Minera Ojos del Salado). Minera Candelaria is an
open pit mine and an underground mine providing copper ore to an on-site concentrator with a
capacity of 75,000 tonnes per day. Minera Ojos del Salado comprises two underground mines,
Santos and Alcaparrosa. The Santos mine provides copper ore to an on-site concentrator with a
capacity of 3,800 tonnes per day, while ore from the Alcaparrosa mine is treated at the Minera
Candelaria mill. In 2014, both operations produced a combined 155 kilotonnes of copper,
87,000 ounces of gold, and 1.4 million ounces of silver. The Candelaria Copper Mining Complex is
indirectly owned by Lundin (80 percent) and Sumitomo Metals Mining Co., Ltd. and Sumitomo
Corporation (collectively, Sumitomo; 20 percent).
Lundin is a diversified base metals mining company with operations and projects in Chile, the USA,
Portugal, Sweden, and Spain and it produces copper, nickel, zinc, and lead. Lundin is a Canadian
public company with offices in Toronto, Canada and its common shares are listed on the Toronto
Stock Exchange (symbol LUN) and the NASDAQ OMX market (symbol LUMI).
In May 2015, Lundin retained the services of SRK Consulting (Canada) Inc. (SRK) to visit the
Candelaria Copper Mining Complex and compile a technical report pursuant to National Instrument
43-101 Standards of Disclosure for Mineral Projects and Form 43-101F1. This report updates the
October 6, 2014 Technical Report entitled “Technical Report for the Compañía Minera Candelaria
and Compañía Minera Ojos del Salado Copper Projects, Atacama Province, Region III, Chile” by the
same authors. It summarizes the technical information that is relevant to support the disclosure of
revised Mineral Resources and Mineral Reserves estimates prepared using revised economic
parameters and the positive results of recent exploration programs. The revised mine plan supporting
the Mineral Resources and Mineral Reserves estimates was disclosed by Lundin on July 29, 2015.
This technical report is based on an inspection of the properties by a team of qualified persons, as
this term is defined in National Instrument 43-101, conducted from July 6 to 10, 2015, a review of
technical information made available by Lundin, Minera Candelaria, and Minera Ojos del Salado,
and discussions with Lundin technical personnel. The qualified persons have reviewed such
technical information and determined it to be adequate for the purposes of this report. The authors do
not disclaim any responsibility for this information.
1.1
Terms of Reference
The scope of work was defined in an engagement letter executed between Lundin and SRK on
May 20, 2015. The scope involves mobilizing a team of qualified persons to visit the subject mineral
assets to review the technical information relevant to supporting Mineral Resources and Mineral
Reserves estimates prepared by Minera Candelaria and Minera Ojos del Salado personnel. The
objective of this review is to provide an independent opinion about the Mineral Resources and
Mineral Reserves of the Candelaria Copper Mining Complex as of June 30, 2015, and to compile a
technical report pursuant to National Instrument 43-101 to support the disclosure of Mineral
Resource and Mineral Reserve Statements for the complex. The responsibilities for each report
section are listed in Table 1.
September 4, 2015
Page 2
Table 1: Responsibility For Technical Report Sections
Section
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
1.2
Title
Executive Summary
Introduction
Reliance on Other Experts
Property Description and Location
Accessibility, Climate, Local Resources,
Infrastructure and Physiography
History
Geological Setting and Mineralization
Deposit Types
Exploration
Drilling
Sample Preparation, Analysis, and Security
Data Verification
Mineral Processing and Metallurgical Testing
Mineral Resource Estimates
Mineral Reserve Estimates
Mining Methods
Recovery Methods
Project Infrastructure
Market Studies and Contracts
Environmental Studies, Permitting, and Social
or Community Impact
Capital Cost and Operating Costs
Economic Analysis
Adjacent Properties
Other Relevant Data and Information
Interpretation and Conclusions
Recommendations
References
Responsible
SRK / NMS
SRK
SRK
SRK / Lundin
SRK
SRK
SRK
SRK
SRK
SRK
SRK
SRK
SRK
SRK
SRK / NMS
SRK / NMS
SRK
SRK / NMS
SRK / Lundin
SRK
SRK / NMS
SRK
SRK
SRK
SRK / NMS
SRK / NMS
SRK / NMS
Qualification of SRK
The SRK Group comprises more than 1,600 professionals, offering expertise in a wide range of
resource engineering disciplines. The independence of the SRK Group is ensured by the fact that it
holds no equity in any project it investigates and that its ownership rests solely with its staff. These
facts permit SRK to provide its clients with conflict-free and objective recommendations. SRK has a
proven track record in undertaking independent assessments of Mineral Resources and Mineral
Reserves, project evaluations and audits, technical reports and independent feasibility evaluations to
bankable standards on behalf of exploration and mining companies, and financial institutions
worldwide. Through its work with a large number of major international mining companies, the SRK
Group has established a reputation for providing valuable consultancy services to the global mining
industry.
The technical report was compiled by a group of independent qualified persons from SRK with the
assistance of John Nilsson, PEng of Nilsson Mine Services Ltd. (NMS). In accordance with National
Instrument 43-101 guidelines, three of the qualified persons visited the Candelaria Copper Mining
Complex during July 2015 as shown in Table 2.
The review of the geology and Mineral Resources aspects was completed by Dr. Jean-Francois
Couture, PGeo and Glen Cole, PGeo, both full time employees of SRK.
September 4, 2015
Page 3
The review of the underground mining aspect was completed by Gary Poxleitner, PEng, a full time
employee of SRK.
The review of the open pit mining aspect was completed by John Nilsson, PEng, an independent
consultant.
The review of the mineral processing and metallurgical testing and recovery methods aspects was
completed by Adrian Dance, PEng, a full time employee of SRK.
The review of the environmental, social, and permitting aspects was completed by Maria Ines Vidal,
MAusIMM an employee of SRK Consulting (Chile) S.A., under the supervision of
Cameron C. Scott, PEng, a full time employee of SRK.
Table 2: Qualified Persons
Company
Qualified Person
Site Visit
SRK
Jean-François Couture,
PGeo (APGO#0197)
July 6 to 10, 2015
SRK
Glen Cole, PGeo
(APGO #1416)
June 16 to 18, 2014
SRK
Adrian Dance, PEng
(APEGBC#37151)
No Visit
SRK
(PEO # 100015286)
Independent
John Nilsson, PEng
(APEGBC#20697)
SRK
(APEGBC#11523)
1.3
Basis of Technical Report
June 10 to 12, 2014
June 16 to 18, 2014
July 6 to 10, 2015
June 10 to 12, 2014
June 16 to 18, 2014
July 6 to 10, 2015
No Visit
Responsibility
Overall responsibility on behalf of SRK
Project Management
(Executive Summary, Sections 1 to 11, 18,
21, 22, 23, 26, and parts of 24 and 25)
Geology and Mineral Resources
(Section 13, parts of 24 and 25)
Review of Processing and Recovery
Method (Sections 12, 16, 17, parts of 20,
24, and 25)
Underground Mining and Mineral Reserves
(Parts of Sections 14, 15, 20, 24, and 25)
Open Pit Mining and Mineral Reserves
(Parts of Sections 14, 15, 17, 20, 24, 25,
and 26)
Environmental and Social and Permitting
(Section 19)
This technical report is based on information made available to SRK by Lundin, Minera Candelaria,
and Minera Ojos del Salado in an electronic data room, and on information collected during the site
visits. The authors have no reason to doubt the reliability of the information provided by Lundin.
Other information was obtained from the public domain. This report is based on the following
sources of information:




Information provided by Lundin, Minera Candelaria, and Minera Ojos del Salado
A site visit conducted from July 6 to 10, 2015
Discussions with Lundin, Minera Candelaria, and Minera Ojos del Salado personnel
Additional information from public domain sources
The qualified persons have reviewed such technical information and have no reasons to doubt the
reliability of the information provided by Lundin, Minera Candelaria, and Minera Ojos del Salado.
The authors do not disclaim any responsibility for the information provided and reviewed.
September 4, 2015
1.4
Page 4
Declaration
SRK’s opinion contained herein and effective September 4, 2015 is based on information collected
by SRK throughout the course of SRK’s investigations. The information in turn reflects various
technical and economic conditions at the time of writing the report. Given the nature of the mining
business, these conditions can change significantly over relatively short periods of time.
Consequently, actual results may be significantly more or less favourable.
This report may include technical information that requires subsequent calculations to derive
subtotals, totals, and weighted averages. Such calculations inherently involve a degree of rounding
and consequently introduce a margin of error. Where these occur, SRK does not consider them to be
material.
SRK is not an insider, associate or an affiliate of Lundin, Minera Candelaria, or Minera Ojos del
Salado. The results of the technical review by SRK are not dependent on any prior agreements
concerning the conclusions to be reached, nor are there any undisclosed understandings concerning
any future business dealings.
September 4, 2015
2
Page 5
Reliance on Other Experts
SRK has not performed an independent verification of the land titles and tenures as summarized in
Section 3 of this report. SRK did not verify the legality of any underlying agreements that may exist
concerning the permits or other agreements between third parties. SRK has relied on the information
provided by the legal advisors of Lundin, Bofill Mir & Alvarez Jana, Abogados, Santiago, Chile, in
an opinion letter sent to SRK on July 30, 2015, which is attached as Appendix A regarding the
ownership status of the Candelaria and Ojos del Salado properties. The reliance applies solely to the
legal status of the rights disclosed in Section 3.
September 4, 2015
3
Page 6
Property Description and Location
The Candelaria and Ojos del Salado mines and surrounding tenements are located in Chile’s
Atacama Province, Region III, approximately 20 kilometres south of the city of Copiapó and
approximately 650 kilometres north of Santiago. The properties are connected to the well-maintained
Chilean road system (Figure 1). The properties are located at approximately 27 degrees 30 minutes
latitude south and 70 degrees, 15 minutes longitude west.
Figure 1: Location of the Mines of the Candelaria Copper Mining Complex
3.1
Mineral Tenure
3.1.1 Minera Candelaria
The Candelaria property comprises 276 mining exploitation concessions (approximately
5,849 hectares) and 59 mining exploration concessions (approximately 6,280 hectares) (Figure 2).
September 4, 2015
Page 7
Figure 2: Candelaria and Ojos del Salado Land Tenure Map
September 4, 2015
Page 8
The concessions either have been granted or are in the process of being granted. A complete list of
tenements is provided in Appendix B. Detailed land tenure map and surface rights maps are shown
in Appendix C. The tenements are free of mortgages, encumbrances, prohibitions, injunctions, and
litigation. The tenements are not affected by royalties except for those listed in Table 3. No mining is
currently taking place on these tenements nor are they contemplated in the current life of mine plan.
Other than disclosed herein, there are no other known factors or risks that may affect access, title, or
the right or ability to perform work on the property.
Table 3: Royalty Characteristics for Candelaria Tenements
Tenement Name
Tenement Type
Royalty Description
Santa Gemita II Uno al Veite
Santa Gemita III Uno al Veinte
Santa Gemita IV Una al Cinco
Santa Gemita V Una al Diez
Mining Exploitation Concession
Brisa 41 a Brisa 45
Roro 1/6
US$0.01 per pound of fine copper produced from
minerals extracted from these mining concessions.
Royalty payment obligation starts once Minera
Candelaria has extracted from these concessions
ore equivalent to an amount greater than 300
pounds of fine copper.
US$3.00 per tonne of extracted ore.
3.1.2 Minera Ojos del Salado
The Ojos del Salado property comprises 195 mining exploitation concessions (approximately
9,286 hectares) and 29 mining exploration concessions (approximately 3,400 hectares) (Figure 2).
The concessions either have been granted or are in the process of being granted. A complete list of
tenements is provided in Appendix B. Detailed land tenure map and surface rights maps are shown
in Appendix C. The tenements are free of mortgages, encumbrances, prohibitions, injunctions, and
litigation. There are no other known factors or risks that may affect access, title, or the right or
ability to perform work on the property.
3.2
Water Use Rights
Minera Candelaria is the owner of underground water use rights of consumptive and permanent use
for approximately 1,196 litres per second. The underground water use rights are legally registered in
the name of Minera Candelaria, free of mortgages, encumbrances, prohibitions, injunctions, and
litigation.
Minera Candelaria is the property owner of superficial water use rights that are equivalent to
approximately 62 litres per second. The superficial water use rights are legally registered in the name
of Minera Candelaria, free of mortgages, encumbrances, prohibitions, injunctions and litigation.
Minera Ojos del Salado is the property owner of underground water use rights of consumptive and
permanent use for a total of 50 litres per second. The underground water use rights are legally
registered in the name of Minera Ojos del Salado, free of mortgages, encumbrances, prohibitions,
injunctions, and litigation.
Minera Ojos del Salado is the property owner of superficial water use rights in the Las Rojas
Channel that are equivalent to approximately 21 litres per second. The superficial water use rights
are legally registered in the name of Minera Ojos del Salado, free of mortgages, encumbrances,
prohibitions, injunctions, and litigation.
September 4, 2015
Page 9
With the commissioning of a desalination plant located at the Punta Padrone port site in early 2013,
the Candelaria Copper Mining Complex ceased extracting process water from underground water
sources in November 2013. The underground water rights remain active and are used for potable and
emergency purposes.
3.3
Mineral Rights in Chile
There are two types of mining concessions in Chile: exploration concessions and exploitation
concessions.
According to the Chilean mining legislation, the following minerals and substances are not subject to
a mining concession: (i) liquid or gaseous hydrocarbons; and (ii) lithium. This means that the holder
of a mining concession will not be able to exploit the lithium of its concession, where lithium
exploitation is reserved exclusively for the state. Nevertheless, Article 8 of the Chilean Mining Code
permits the state to allow particulars to exploit lithium reserves by granting an administrative
concession or by entering into a special operation agreement.
Excluding liquid or gaseous hydrocarbons and lithium, the mining concessioner can exploit and
benefit from all other minerals within the boundaries of the relevant concessions, without additional
administrative concessions or operation agreements.
In accordance with that set forth in the Chilean Mining Code, every titleholder of a mining
concession, whether exploitation or exploration, has the right to establish an occupation easement
over the surface properties required for the comfortable exploration or exploitation of its concession.
In the event that the surface property owner does not voluntarily agree to the granting of the
easement, the titleholder of the mining concession may request such easement before the Courts of
Justice, which shall grant the same upon determination of due compensation for losses.
The main characteristics of exploration and exploitation concessions are described in the following
subsections.
3.3.1 Exploration Concessions
The titleholder of an exploration concession has the right to carry out all types of mining exploration
activities within the area of the concession. Exploration concessions can overlap or be granted over
the same area of land, however, the rights granted by an exploration concession can only be
exercised by the titleholder with the earliest dated exploration concession over a particular area.
For each exploration concession the titleholder must pay an annual fee of approximately US$1.60
per hectare to the Chilean Treasury. Exploration concessions have a duration of two years. At the
end of this period, they may: (i) be renewed as an exploration concession for two additional years in
which case at least 50 percent of the surface area must be renounced, or (ii) be converted, totally or
partially, into exploitation concessions.
A titleholder with the earliest dated exploration concession has a preferential right to an exploitation
concession in the area covered by the exploration concession, over any third parties with a later
dated exploration concession for that area or without an exploration concession at all and must
oppose any applications made by third parties for exploitation concessions within the area for the
exploration concession to remain valid.
September 4, 2015
Page 10
3.3.2 Exploitation Concessions
The titleholder of an exploitation concession is granted the right to explore and exploit the minerals
located within the area of the concession and to take ownership of the minerals that are extracted.
Exploitation concessions can overlap or be granted over the same area of land, however, the rights
granted by an exploitation concession can only be exercised by the titleholder with the earliest dated
exploitation concession over a particular area.
Exploitation concessions are of indefinite duration and an annual fee is payable to the Chilean
Treasury of approximately US$8 per hectare.
Where a titleholder of an exploration concession has applied to convert the exploration concession
into an exploitation concession, the application for the exploitation concession and the exploitation
concession itself are back-dated to the date of the exploration concession.
A titleholder to an exploitation concession must apply to annul or cancel any exploitation
concessions that overlap with the area covered by its exploitation concession within a certain time
period in order for the exploitation concession to remain valid.
September 4, 2015
4
Page 11
Accessibility, Climate, Local Resources,
Infrastructure, and Physiography
The properties are located in the Atacama Province, Region III of northern Chile, at an elevation of
approximately 650 metres above sea level and approximately 20 kilometres south of the city of
Copiapó and 5 kilometres west of the town of Tierra Amarilla.
4.1
Accessibility
The properties are accessible by two maintained dirt roads, one coming through the Tierra Amarilla
community and the other branching off of Route 5, the Pan-American Highway, a well-maintained
multi-lane highway. Copiapó regional airport is serviced by regional flights from Santiago and other
destinations on a daily basis. The regional airport is located approximately midway between Copiapó
in the south and Caldera in the north. Copiapó itself is strategically located on the Pan-American
Highway.
4.2
Local Resources and Infrastructure
Copiapó is a modern city with all regular services and a population of approximately 160,000.
Numerous mining-related businesses are located in the city. Personnel employed by the Candelaria
Copper Mining Complex come from the Copiapó region. The Candelaria and Ojos del Salado mines
receive electrical power through long-term contracts with AES Gener S.A., a local energy company.
The main line to the Candelaria mine is rated at 220 kilovolts at 745 amperes. Ojos del Salado is
serviced by a 23 kilovolt line with 235 amperes. The current contract with AES Gener S.A. expires
in 2022.
The mines’ water supply comes from a desalination plant (Figure 3A) owned by Minera Candelaria
via a pipeline that were both completed in 2013, as well as from a nearby wastewater treatment
facility. The commissioning of the desalination plant has enabled the mines to cease drawing ground
water from the Copiapó aquifer, the historic source of water, except in emergency situations and for
potable water supply. Concentrate is being shipped from the company-owned Punta Padrones port
facility at the port of Caldera (Figure 3C).The facility has a storage capacity of 45,000 wet metric
tonnes and can handle ships with a capacity of up to 58,000 tonnes and a draft of 12.4 metres. The
port has a total annual capacity of some 3.5 million wet metric tonnes, well in excess of current and
planned production. Key mine infrastructure is shown in Figure 4.
4.3
Climate
Copiapó has a desert climate with mild temperatures year round. Winters are mild with warm
temperatures; mid-winter maximums in July reach approximately 20 degrees Celsius. Winter nighttime temperatures average approximately 7 degrees Celsius. Summers are warm with a January
average of 22 degrees Celsius. Annual precipitation is approximately 17 millimetres, of which the
majority falls in the winter months. Exploration and mining can occur year round.
September 4, 2015
4.4
Page 12
Physiography
The project area is mountainous with a relief varying between 200 and 1,000 metres above sea level
(Figure 3A-D). Vegetation is minimal outside of inhabited valleys where irrigation is used to support
vegetation that is capable of withstanding the desert environment. The mines are located in an active
seismic zone.
A
B
C
D
Figure 3: Infrastructure and Landscape in the Project Area
A. Minera Candelaria mine and processing plant
B. Minera Ojos del Salado Pedro Aguirre Cerde processing plant
C. Desalination plant at Puntos Patrones
D. Port storage and loading facility
September 4, 2015
Page 13
Figure 4: Candelaria Copper Mining Complex and Related Infrastructure
September 4, 2015
5
Page 14
History
Information about the exploration history of the Candelaria and Ojos del Salado mines is scarce.
Information presented in this section has been extracted from public databases.
The Candelaria deposit was discovered by the Phelps Dodge Corporation (Phelps Dodge) in 1987. A
feasibility study was completed in 1990, and construction started in October 1992. Production
commenced in early 1995. In 1996, Phelps Dodge announced plans to expand the concentrator
throughput with the installation of a second semi-autogenous grinding (SAG) mill. The expansion
also included additional mining facilities and new and expanded concentrator facilities. This upgrade
was completed in 1997. Sumitomo acquired a 20 percent stake in the property in 1992.
Mine site and district exploration programs have been active since the Candelaria deposit discovery.
This work resulted in the discovery of the Alcaparrosa and Candelaria Norte deposits, both of which
are now producing mines.
In 2007, property ownership changed when Freeport acquired Phelps Dodge. Operations at
Candelaria continued uninterrupted.
During 2011, a pipeline was completed to bring water from a nearby wastewater treatment facility to
the Candelaria mine.
A desalination plant at the port of Caldera was commissioned in 2013 at a capacity of 500 litres per
second.
The Santos mine has been in production since 1929. At that time the operation was known as Planta
Punta de Cobre and was owned by Caja de Crédito Minero (CACREMI). The plant started with an
initial throughput capacity of 250 tonnes per day. It was later renamed the Pedro Aguirre Cerde
(PAC) plant. In 1978, the PAC plant was acquired by private individuals from Empresa Nacional de
Minería (ENAMI), legal successor to CACREMI. The Santos mine and Resguardo claims were also
acquired, which together formed Compañía Minera Ojos del Salado S.A., MINOSAL. The
processing capacity was increased to 650 tonnes per day. Phelps Dodge acquired 10 percent of Ojos
del Salado in 1983 and became sole owner of the property in 1985. The PAC plant was expanded for
a second time in 1988, increasing capacity to 1,700 tonnes per day. Subsequent upgrades have
increased the plant capacity to the current 3,800 tonnes per day. Sumitomo acquired its 20 percent
interest in Minera Ojos del Salado in 2005.
In 1995, construction of a second underground operation at Alcaparrosa commenced, with
production starting in early 1996.
In November 2014, Lundin acquired Freeport’s 80 percent interest in the Candelaria Copper Mining
Complex.
The Candelaria Copper Mining Complex has been a significant producer of copper since the mid1990s. Table 4 shows the payable copper and gold metal in concentrates produced since 2011.
September 4, 2015
Page 15
Table 4: Payable Metal in Concentrate (100% Basis)
Metal
Copper
Gold
*
Unit
kt Cu
koz Au
2011
175
101
2012
147
83
2013
191
101
2014
155
87
2015*
95
50
Payable metal sales volume for the first half of 2015
Source: Freeport (2011-2013) and Lundin (2014 and 2015)
A summary of the development history of the Candelaria Copper Mining Complex is presented in
Table 5.
Table 5: Summary Development History of the Candelaria Copper Mining Complex
Date
Event or Milestone
1927
Minera Ojos del Salado is built under the name Planta Punta de Cobre, and owned by Caja de
Crédito Minero (CACREMI). Production started in 1929 with an initial throughput capacity of
250 tonnes per day. It was later renamed the PAC plant.
PAC plant was acquired by private individuals from Empresa Nacional de Minería (ENAMI), legal
continuer of CACREMI. The Santos mine and Resguardo claims were also acquired, which
together formed Compañía Minera Ojos del Salado S.A., MINOSAL.
The creation of the new mining company generated an expansion, increasing its processing
capacity to 650 tonnes per day.
North American company Phelps Dodge acquired 10 percent of the shares of MINOSAL.
Phelps Dodge acquired total control of Compañía Minera Ojos del Salado S.A., MINOSAL
Phelps Dodge discovered the Candelaria deposit.
Phelps Dodge tunnelled 396 metres into the Candelaria sulphide deposit.
The PAC plant was expanded for the second time to 1,700 tonnes per day.
Candelaria feasibility study started. By August, Phelps Dodge had spent US$8 million on the
project.
Candelaria feasibility work was completed.
The Chilean government approved a request by Minera Candelaria to invest US$1.5 billion in the
project over a 12-year period.
Sumitomo acquired a 20 percent interest in Minera Candelaria for US$40 million, plus
Sumitomo’s share of the total equity capital required to finance construction and development.
Minera Candelaria began stripping Phase 1 of the open pit at 35 kilotonnes per day.
The Candelaria processing plant start-up, three months ahead of schedule.
Minera Candelaria first shipment loaded at port facility.
The Export-Import Bank (Exim) of Japan agreed to provide a US$150 million loan to assist in
financing the expansion at Minera Candelaria.
Phelps Dodge completed the expansion project eight months ahead of schedule and at a cost of
US$320 million, 10 percent below budget. The expansion included additional mining facilities, the
construction of a second SAG mill, and new and expanded concentrator facilities to 70 kilotonnes
per day.
Minera Candelaria mill expansion completed to 70 kilotonnes per day.
The PAC processing plant operations were stopped due to a low copper price.
The PAC processing plant operations were resumed due to the improved copper price outlook.
Sumitomo acquired 20 percent interest in Minera Ojos del Salado.
The Candelaria Norte underground mine started production.
Freeport acquired Phelps Dodge gaining ownership of both Minera Candelaria and Minera Ojos
del Salado.
Construction of the desalination plant commenced at Punta Padrones.
Completion and full operation of desalination plant.
October 6, Lundin announced an agreement to acquire Freeport’s 80 percent interest in Minera
Candelaria and Minera Ojos del Salado. The transaction closed on November 3, 2015.
1978
1983
1985
1987
1988
1988
1989
1990
1991
1992
1993
1994
1995
1997
1997
1998
2004
2005
2007
2011
2013
2014
September 4, 2015
6
Geological Setting and Mineralization
6.1
Regional Geology
Page 16
The Candelaria deposit is located in the Atacama Province, Region III in northern Chile, at the
boundary between the Coastal Cordillera and the Copiapó Precordillera. The Coastal Cordillera of
Chañaral and Copiapó is composed of Permian to Lower Cretaceous intrusions within a basement of
metasedimentary rocks of Devonian to Carboniferous age (Dallmeyer et al., 1996). Volcanic,
volcaniclastic, and marine carbonate rocks represent intra- and back-arc sequences that were
deposited during Early to Mid-Cretaceous (Arévalo et al., 2006).
In the Copiapó Precordillera the oldest exposed rocks are Early Carboniferous in age and correlate
with metasedimentary basement rocks in the Coastal Cordillera. They are overlain by Permian to
Jurassic sedimentary and volcanic rocks. Permian granitic plutonic complexes in the Precordillera
are associated with extensive crustal melting and rifting. Volcanic and sedimentary rocks of the
Punta del Cobre Formation, the Bandurrias Formation, and marine carbonate rocks of the
Chañarcillo Group are prominently exposed as a belt of calcareous, volcanic, and volcaniclastic
rocks in the western Precordillera. They are overlain by the Cerrillos Formation of epiclastic to
volcaniclastic rocks. At the base, the Cerrillos Formation contains fluviatile sandstone and
conglomerate, as well as freshwater limestone. Volcanic breccias and lava flows become more
dominant higher in the sequence.
The Candelaria-Punta del Cobre polymetallic sulphide deposits are located to the east of the
Atacama fault zone, which extends over 1,000 kilometres along the Chilean coast. The Atacama
fault zone is a subduction-linked arc-parallel strike-slip fault system that has been active at least
since Jurassic (Marschik and Fontboté, 2001).
6.2
Local Geology
The Candelaria, Santos, and Alcaparrosa mines are located in the district of Punta del Cobre. The
polymetallic sulphide deposits are hosted in the volcanic rocks of the Punta del Cobre Formation
(Figure 5). The Punta del Cobre Formation is overlain by Cretaceous marine calcareous rocks of the
Lower Cretaceous Chañarcillo Group. The Chañarcillo Group comprises, from the bottom up, the
Abundancia, Nantoco, Totoralillo, and Pabellón formations.
In the north and northwest, the rocks of the Chañarcillo Group are interlayered with continental
volcanosedimentary rock of the Bandurrias Formation, also of Lower Cretaceous age. The rocks of
the Chañarcillo group were deposited in the back-arc facies of a volcanic arc, which is represented
by the rocks of the Bandurrias and Punta del Cobre formations.
Intrusive rocks of the Coastal Batholith are located mainly to the west of the Punta del Cobre district
(Figure 5) and are dated at 123 and 111 million years. The contact aureole of this batholith affects,
with decreasing intensity to the east, all the Lower Cretaceous rocks in the Punta del Cobre district.
At the latitude of Candelaria mine, the Coastal Batholith forms a tabular multi-phase plutonic
complex formed, from oldest to youngest, by the La Brea diorite, the San Gregorio monzodiorite, the
tonalitic to granodioritic Los Lirios pluton, and the Ojancos and El Granate microgranite (Figure 5).
The largest area is covered by the La Brea pluton.
September 4, 2015
Page 17
Section on
Figure 6
Figure 5: Regional Geology Setting Around the Candelaria, Alcaparrosa, and Santos Mines
Source: Minera Candelaria
The dominant structural elements in the Candelaria-Punta del Cobre area are a large northeasttrending antiform (Tierra Amarilla Anticlinorium), a southeast verging fold-and-thrust system and a
dense set of north-northwest to northwest-trending high-angle sinistral transcurrent faults (Marschik
and Fontbote, 2001). This fold is part of the Paipote fold and thrust system comprising a set of northnortheast-trending folds and thrust sheets (Arévalo et al., 2006). One of the folds in the Candelaria
mine area is the northeast-trending Tierra Amarilla Anticline, affecting all Lower Cretaceous
sedimentary and volcanic rock.
Northeast-striking reverse faults parallel to the Tierra Amarilla Anticline are part of the Paipote fold
and thrust belt. Mylonitic shear zones and cataclastic rocks locally form the contact between the
intrusive rocks and Early Cretaceous host rocks. Ductile deformation is recorded in the Ojancos,
Candelaria, and Florida shear zones. Both the Tierra Amarilla anticline and the Ojancos-Florida
shear zone are displaced by north-northwest-trending brittle faults (Figure 5). The Lar, San Gregorio,
and Ojancos faults show sinistral strike-slip displacement. The rocks located between the major
north-northwest-striking faults also appear displaced by shorter faults of northwest- to northnorthwest-strike orientation.
6.3
Property Geology
6.3.1 Geology of the Candelaria Mine
Calcareous, sedimentary, and volcaniclastic rock of the Abundancia and Punta del Cobre formations
are exposed within the Candelaria open pit. Due to the closer proximity to the Coastal Batholith,
rocks in the Candelaria open pit show stronger metasomatism and metamorphism than in other
sulphide deposits of the Punta del Cobre district (Figure 6).
September 4, 2015
Page 18
The lowermost unit in the Candelaria mine is the Lower Andesite, a compact sequence of porphyritic
to massive andesite and volcaniclastic breccias with intense biotite-quartz-magnetite-albite alteration
(Figure 7). The Lower Andesite is overlain by a sequence of stratified volcaniclastic and tuffs, which
are further because of alteration and mineralisation into pink garnet skarn and magnetite breccia. The
Upper Andesite of the Punta de Cobre Formation consists of a homogenous sequence of
undifferentiated volcaniclastic and andesitic rock. The biotite-bearing andesite exhibits alteration
varying from quartz-pyroxene hornfels to pyroxene-scapolite-garnet skarns.
W
E
Candelaria
Santos
Punta del Cobre
Figure 6: Schematic Vertical Section Showing the Location of the Candelaria and Santos
Mines (see Figure 5 for section location)
SW
NE
Santos
Source: Minera Candelaria (2015)
Figure 7: Local Geology Setting of the Candelaria Mine
The Abundancia Formation of the Chañarcillo Group in the Candelaria mine consists of fine-grained
biotite-, silica-, or clinopyroxene-bearing calcareous metasandstone and mudstone. The stratified
rocks are cut by dacite and lamprophyre dikes. The hydrothermally-altered dacite porphyry dikes and
sills locally contain copper mineralization. The youngest rocks in the Candelaria mine are postmineralization lamprophyre dikes.
September 4, 2015
Page 19
At the Candelaria mine a low angle shear zone, where ductile to brittle high-angle faults merge,
marks synplutonic brittle-to-ductile extensional deformation (Arévalo et al., 2006).
6.3.2 Geology of the Santos Mine
The rocks of the Santos mine are mainly of the Punta del Cobre and Abundancia formations. A
typical section showing the geology of the Santos mine is shown in Figure 8.
The lowermost rocks of the Punta del Cobre Formation are porphyritic to aphanitic andesite of the
Lower Andesite. The Lower Andesite is conformably overlain by the dacitic domes hydrothermally
altered to an albitic-pyritic assemblage that is overlain by a sequence of volcaniclastic breccias with
interbedded layers of siltstone and sandstone. The basal portion of this unit (locally termed the
albitoforo) hosts manto-type copper mineralization. Conformably overlying the breccias are fine
grained clastic rocks and Upper Andesite basaltic andesite flows. Intercalations of lenticular
limestone, polymict breccias, volcanic tuffs, sandstone and iron-rich chert also occur within the
Upper Andesite. The overlying Abundancia Formation comprises well stratified marine sedimentary
rock, mainly calcareous sandstone. The rocks of the Abundancia Formation do not contain
significant mineralization.
Intrusive rocks in the Santos mine are represented by a hornblende diorite, which intrudes the Punta
del Cobre Formation and the lower Abundancia Formation. Dikes cut various stratigraphic levels of
the Punta del Cobre Formation and some layers of the Abundancia Formation. Andesitic dikes trend
northwest and are up to 4 metres thick. Dacitic dikes occur in variable orientations ranging from
northwest to northeast trends and are up to 5 metres thick. Dikes post-date the mineralization.
The Santos mine is located in the eastern limb of the north-northeast-trending Tierra Amarilla
anticline. The stratigraphic contacts in the eastern limb of the fold dip approximately 25 degrees.
SW
NE
Alluvium - Colluvium
Abundancia Formation
(Limestone-Sandstone)
Upper Andesites and Siltstones
Albitophyre
W
Volcano-clastic Breccia
Breccia Bodies
Candelaria
Mgt-Act-Qz-Py-Cpy Alteration
Lower Andesites
Mineralized Body ≥ 0.4% Cu
Source: AMEC (2013b)
0
200
400 m
Figure 8: Local Geology Setting of the Santos Mine
September 4, 2015
Page 20
6.3.3 Geology of the Alcaparrosa Mine
Alcaparrosa mine is located in the northern part of the Punta del Cobre mining district (Figure 5), in
the west flank of Copiapo valley. A typical section of the stratigraphic units present in the mine are
shown in Figure 9. Punta del Cobre formation is subdivided in lower andesites, volcanoclastic
breccias, albitophyre and pyroxene- scapolite hornfels interbeded with garnetites. The lower
andesites consist of aphanitic, porphiric, blastoporphiric and brecciated dark grey andesites. The
albitophyre is a light grey porphiric dacite with phenocrysts of plagioclase and occasionally “quartz
eyes” in an aphanitic silica groundmass. The volcanoclastic breccia contains porphyric clasts altered
to potasic feldespar in a matrix with high contents of magnetite. Hornfels and garnetites are
concordant located over the albitophyre and correspond to the metamorphosed equivalents of the
upper part of Punta de Cobre Formation and Abundancia Formation. In the southern central part of
the mine a granodiorite stock cuts the whole sequence.
The metasedimentary sequence overlying the Punta del Cobre Formation rocks likely corresponds to
the Abundancia Formation. Two subunits are identified in the metasediment unit: silicified
Metasediment, a quartz hornfels, and pyroxene-scapolite-garnet skarn with metasomatic banding.
Intrusive rocks are andesitic, granitic, dioritic and monzodioritic dikes, and a diorite stock. The
diorite stock is a post-mineral intrusion with equi-granular plagioclase and hornblende crystals. The
diorite stock is cut by dikes. Andesite dikes are porphyritic in texture and do not contain any
mineralization. Granitic dikes have aplitic to porphyritic texture and show disseminated traces of
pyrite and magnetite, though they do not contain any copper mineralization. Dioritic dikes are finegrained to equi-granular and barren. Monzodioritic dikes contain xenoliths of magnetite and
chalcopyrite veinlets.
W
E
Section 28 (N 6,962,195)
650
Rocio Fault
Copiapo River
480
Piroxene – Scapolite Skarn
Gravels/Alluvium Deposits
Granodiorite
Intrusive
Albitofiro
Tuff
Magnetite Breccia
GE 150S
Albitofiro
Tuff
Lower Andesites
50
50
200m
(Source: Exploration Ojos del Salado, 2015)
Figure 9: Local Geology Setting of the Alcaparrosa Mine
September 4, 2015
6.4
Page 21
Mineralization
6.4.1 Mineralization at the Candelaria Mine
The main mineralized body at the Candelaria mine is hosted in rocks of the Punta del Cobre
Formation. Specifically, the host rocks are massive andesite and breccias of the lower andesite, and
volcanic tuffs and volcaniclastic rocks at the base of the upper andesite. In the metasedimentary
rock, the mineralization is confined to a few isolated layers (mantos).
The mineralized body is up to 400 metres thick in its central part and thins towards the edges. In
east-west sections, the mineralization has a lenticular, downward concave shape with a steep eastern
limb and a shallowly dipping western limb. The shape of the mineralized body in north-south section
is irregular. In plan view, the extent of the mineralization is approximately 1,400 metres by
2,400 metres. The mineralized body was folded after its formation. The north-northeast-trending fold
axis corresponds to the Tierra Amarilla anticline.
The mineralization assemblage in the Candelaria mine consists of chalcopyrite, magnetite, pyrite,
pyrrhotite, and sphalerite. Biotite, calc-silicate minerals, and potassium feldspar constitute the
gangue minerals. Pervasive potassic alteration is associated with the mineralization.
Dominant copper mineralization styles are mantos, veins, breccia filling, and veinlets along foliation
planes. Gold occurs within chalcopyrite and in fractures in pyrite. Chalcopyrite and pyrite also occur
in secondary northwest and north-northwest-striking faults.
6.4.2 Mineralization at the Santos Mine
Chalcopyrite is the only primary copper sulphide present in the Santos mine. Additionally to copper
mineralization, there are economic values of gold. Most frequent gangue minerals are pyrite,
magnetite, actinolite, k-feldspar, chlorite, biotite and hematite.
In the Santos mine, three types of mineralized bodies are observed: veins, mantos, and breccia
bodies. An important vein in the Santos mine is the Isabel, which is oriented northwest-striking, and
extends over 1 kilometre in length and between 4 and 30 metres in width. Manto-type mineralization
occurs as tabular bodies hosted in two sedimentary horizons located in the floor and roof of the
albitophyre. The manto mineralization is characterized by variable iron contents with magnetite
common in the north and deeper areas, and specular hematite in the south. Mineralization occurs
within breccia bodies is typically contained with the albitoforo and lower andesite and is formed by
steeply west-dipping and north-northwest- to northwest-striking bodies.
6.4.3 Mineralization at the Alcaparrosa Mine
Mineralized bodies at the Alcaparrosa mine have a manto-type geometry that trend to the northeast
and dip to the west. Ore and gangue mineralogy consists of chalcopyrite, pyrite, and magnetite, with
trace pyrrhotite, molybdenite, and arsenopyrite.
Mineralization styles at the Alcaparrosa mine also occurs as veinlets defining dense stockwork,
breccias (hydrothermal potassium feldspar and magnetite), as well as fine dissemination in biotite
meta-andesites. High grade bodies are also found in massive veins striking north-northwest, north,
and east.
September 4, 2015
7
Page 22
Deposit Types
The copper-gold sulphide mineralization at the Candelaria Copper Mining Complex is generally
referred to as iron oxide copper gold (IOCG). Depending on lithology and the structural setting, the
polymetallic sulphide mineralization can occur as veins, hydrothermal breccias, replacement mantos,
and calcic skarns (Sillitoe, 2003).
The Candelaria IOCG deposit lies within the metamorphic aureole of the Lower Cretaceous
magmatic arc plutonic suite in the Candelaria-Punta del Cobre district, Atacama Province, northern
Chile. IOCG deposits are primarily defined by their elevated magnetite and/or hematite with elevated
copper and gold contents (Sillitoe, 2003). The IOCG belt located in the Coastal Cordillera of
northern Chile and southern Peru is part of a volcano-plutonic arc of Jurassic to Early Cretaceous
age. The arc is characterized by voluminous tholeiitic to calc-alkaline plutonic complexes of gabbro
to granodiorite composition and primitive, mantle-derived parentage. Major arc-parallel fault
systems developed in response to extension and transtension induced by subduction roll-back at the
retreating convergent margin.
Most of the sulphide mineralization at Candelaria and Ojos del Salado occurs in breccias, stockwork
veinlets, and disseminations in andesite, especially where the rocks are strongly foliated. Highergrade copper mineralization is controlled by stratigraphy in mantos and by faults, trending
predominantly northwest. The host rocks are thermally metamorphosed (hornfels and skarn) in the
carapace of the Copiapó batholith, within 1 kilometre from the intrusion. The top of the
mineralization system consists of magnetite-amphibole skarn in calcareous meta-tuff with pyrrhotite,
pyrite and chalcopyrite (Figure 10).
Figure 10: Schematic Section Through IOCG and Magmatic Systems
Source: Richards and Mumin (2013)
September 4, 2015
8
Page 23
Exploration
Candelaria and Ojos del Salado are active mine operations. Exploration work completed prior to
commencement of mining is not relevant to this technical report.
Ongoing exploration is conducted by Minera Candelaria and Minera Ojos del Salado with the
primary purpose of supporting mining and increasing Mineral Resources available for mining. The
exploration strategy is focused on tracing known mantos and vein targets as extensions from current
orebodies utilizing host rock and alteration features down dip and along strike from existing
underground infrastructure. Historically, this strategy has proven very effective in defining new
Mineral Resources available for underground mining. Exploration work is completed by mine
personnel.
Much of the exploration is conducted from underground, requiring significant underground
development to provide adequate drilling stations. Regional exploration is also undertaken on the
large properties surrounding the mines to identify targets and define new Mineral Resource areas.
From 2010 to 2014, Minera Candelaria and Minera Ojos del Salado have together invested more
than US$117 million in exploration to expand the Mineral Resources primarily below the Candelaria
open pit, to the north and south, and at the three underground mines. During this period, 1,344 core
boreholes (313,907 metres) were drilled requiring 11,114 metres of underground development to
provide access for drilling.
At Minera Candelaria, new discoveries were made beneath the eastern and southern portions of the
open pit (the Susana and Damiana deposits) and as well at the existing Candelaria Norte
underground operations (Wendy Norte deposit; Figure 11). During the first half of 2015, new
Mineral Resource models were prepared for Susana, Damiana, Wendy Norte, Lila, and Elisa Norte II
(Figure 11). New discoveries were also made from surface drilling programs.
At Minera Ojos del Salado, new discoveries were made at Alcaparrosa (Southeast, Southwest,
Central Este, Viviana; Figure 12) and at Santos (Melendez Central and Helena Sur; Figure 13). New
Mineral Resource and Mineral Reserve estimates were prepared in the first half of 2015, extending
the life of the Alcaparossa and Santos mines to 2021 (see Section 15.4). The sulphide zones remain
open south of the Southwest and Southeast zones of Alcaparrosa (Figure 12) and south of the Helena
Sur deposit at Santos (Figure 13). Wide spaced and infill drilling is ongoing and will improve the
confidence in the continuity of the sulphide mineralization and investigate its lateral extensions.
September 4, 2015
Page 24
N
Candelaria
Property Boundary
2010 - 2012 Models
2013 Model
2015 Models
0
500 m
Figure 11: Exploration Areas at the Candelaria Underground Mine
September 4, 2015
Page 25
N
Ojos del Salados
Property Boundary
Viviana
North
2009 - 2012 Models
2015 Models
Northwest
Caseron 11
Central
Central
Este
Southwest
SECTION
28
Southeast
0
200 m
Ojos del Salados
Property Boundary
Figure 12: Exploration Areas at the Alcaparrosa Mine
Source: Minera Ojos del Salado
September 4, 2015
Page 26
N
Ojos del Salados
Property Boundary
2005 - 2012 Models
2015 Models
0
200 m
Figure 13: Exploration Areas at the Santos Mine
September 4, 2015
Page 27
Building on this exploration success, an aggressive exploration program is planned by Minera
Candelaria and Minera Ojos del Salado for the period 2015 to 2018, targeting the lateral extensions
of the areas investigated since 2010. The planned exploration program (Table 6) includes
approximately 7,240 metres of underground development and 347,000 metres of core drilling at an
estimated combined cost of US$119 million.
Table 6: Summary of 2015 to 2018 Exploration Program
Location
Candelaria UG
Alcaparrosa
Santos
Regional
Total
Year
2015
2016
2017
2018
2015
2016
2017
2018
2015
2016
2017
2018
2015
2016
2017
2018
Drifts
(metre)
1,100
1,500
1,500
1,000
140
500
700
Drifts
(US$M)
$5.1
$6.9
$6.9
$4.6
$0.6
$2.2
$3.0
400
400
$1.7
$1.7
7,240
$32.7
Drilling
(metre)
72,632
49,000
45,000
25,000
18,250
10,000
5,000
15,000
18,250
10,000
5,000
15,000
Drilling
(US$M)
$15.5
$11.2
$11.2
$7.4
$4.4
$2.6
$1.5
$4.0
$4.4
$2.6
$1.5
$4.0
19,030
21,100
18,700
346,962
$4.8
$6.2
$5.0
$86.3
The objective of this aggressive exploration program is to define and upgrade the classification of
additional higher grade Mineral Resources in the underground mines to replace the processing of
lower grade feed from the open pit or surface stockpiles and improve the life of mine copper
production.
The aggressive exploration program initiated in 2010 has resulted in significant new discoveries,
with a positive impact on the life of the three underground mines. The sulphide zones explored since
2010 remain open laterally and it is expected that the proposed exploration program will continue to
expand the Mineral Resources, with the potential to defer further the depletion of Mineral Reserves
in the three underground mines.
At Candelaria, the 2015 exploration program includes 38,400 metres of core drilling at Lila
(Figure 11), and, 1,100 metres of underground development and 26,100 metres of core drilling to
explore the southern extensions Susana and Damiana.
At the Alcaparrosa mine, the 2015 exploration program includes 140 metres of underground
development, and 18,250 metres of core drilling in the Viviana area (Figure 12).
At the Santos mine, the 2015 exploration program includes 18,250 metres of core drilling at Helena
and at Helena Sur (Figure 13).
In addition to the underground exploration programmes, a compilation of regional geological data
has been commenced in order to generate a geological model to facilitate district wide target
September 4, 2015
Page 28
generation. Included in this programme is the generation of a comprehensive 3-dimensional GOCAD
model of the region.
8.1
SRK Comments
The Candelaria mine is, at present, primarily considered an open pit mine. Aggressive exploration
drilling completed at Minera Candelaria and Minera Ojos del Salado since 2010 demonstrates the
excellent potential for extending the sulphide zones in the three underground mines and for new
discoveries in other areas of the properties amenable for underground mining.
At Minera Candelaria, new sulphide zones have been defined below and to the south of the
Candelaria open pit (Damiana and Susana; Figure 11) and to the north of the Wendy deposits
(Lila; Figure 11). New Mineral Reserves were declared in April 2015 at Damiana and Susana. The
known sulphide zones remain open to the north and south of the Candelaria open pit beyond the
drilling information and these new targets, including extensions to Lila, Susana and Damiana, remain
to be fully investigated.
At Alcaparrosa, all sulphide zones remain open laterally and at depth. New Mineral Resource
estimates have been prepared for five new deposits (Southwest, Southeast, Central Este, and
Viviana; Figure 12).
At the Santos mine, new sulphide mineralization has been defined to the southeast and the Malaquita
Norte structure (Figure 13) is open at depth with good potential for expansion. New Mineral
Resource models were prepared for the Melendez Central and Helena Sur deposits during the first
half of 2015.
The exploration potential of the Candelaria Copper Mining Complex remains excellent. SRK is of
the opinion that the aggressive exploration program as envisioned by the company will continue to
expand the underground Mineral Resources in all three underground mines, with a positive impact
on the life of these assets.
September 4, 2015
9
Drilling
9.1
Drilling at Candelaria
Page 29
From 1990 to 2014, 2,618 core and percussion boreholes (801,500 metres) have been drilled in and
around the Candelaria mine.
Approximately 93 percent of all drilling comprised core boreholes. Approximately 80 percent of all
core boreholes were drilled using NQ equipment, the rest using HQ equipment. Initially, drilling was
completed by Geotech Boyles Bros. S.A. After the completion of borehole 325, drilling services
were provided by Connors Drilling, LLC. Starting in 2012, Boart Longyear was contracted to
complete all drilling. Until 2011, boreholes were surveyed by mine personnel. No information exists
on instruments or methodologies used for these surveys. Since 2011, SG Drill Servicios Geol (SG
Drill) based in Copiapó, has been contracted to complete down-hole surveys. SG Drill uses a Reflex
tools with readings at 3-metre intervals. The majority of the boreholes were drilled with an azimuth
of 065 or 245 degrees with inclinations between -90 and +90 degrees. Table 7 summarizes the
drilling information for Candelaria.
Table 7: Summary of Drilling Activities at Candelaria Mine (Open Pit and Underground)
Year
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015*
Total
*
Percussion
Core
Geotechnical
Underground
Total
Number Length (m) Number Length (m) Number Length (m) Number Length (m) Number Length (m)
325
125,369
325
125,369
23
4,041
23
4,041
88
21,482
5
1,236
93
22,718
71
32,417
71
32,417
70
32,848
70
32,848
38
12,174
4
1,459
42
13,632
37
14,660
37
14,660
60
16,736
60
16,736
69
20,788
2
1,016
71
21,804
126
51,025
126
51,025
83
26,455
83
26,455
50
3,928
89
29,165
3
1,139
270
35,468
412
69,700
78
34,082
4
915
82
34,997
87
33,257
2
455
89
33,712
28
784
156
40,208
1
300
185
41,292
126
33,781
126
33,781
60
20,163
1
161
61
20,324
52
13,772
52
13,772
29
9,696
5
2,246
34
11,942
53
23,448
4
200
57
23,648
73
33,737
2
814
193
34,332
268
68,883
42
22,440
28
7,960
70
30,401
37
13,873
10
4,305
80
21,708
127
39,885
35
11,479
16
4,265
51
15,744
101
8,753
1,885
673,908
45
15,105
587
103,733
2,618
801,500
First and second quarter of 2015
September 4, 2015
Page 30
Figure 14: Location of the Collars of the Boreholes Drilled on the Candelaria Copper Mining
Complex
September 4, 2015
Page 31
Core recovery is routinely measured and typically exceeds 90 percent. Borehole spacing in the
Mineral Resource areas is approximately 35 metres and wider along the edges of the Mineral
Resource areas and beyond (Figure 14).
9.2
Drilling at Ojos del Salado
9.2.1 Santos Mine
In the Santos sector, a total 1,097 core boreholes (224,705 metres) were drilled from underground
and surface stations since 1988 (sectors of Supernova, Melendez South and Central, and Helena
South). The majority of the boreholes were drilled with an azimuth of 065 or 245 degrees with
inclinations between -82 and +90 degrees. Borehole lengths vary between 40 and 728 metres.
Down-hole deviation is monitored at regular intervals using Reflex tools. Table 8 shows a summary
of the drilling completed for each sector.
Table 8: Summary of Drilling Activities Completed at the Santos Mine
Sector
Supernova
Melendez
South
Melendez
Central
Helena South
Total
Surface
Borehole Total Length
Count
(metres)
-
-
55
55
3,765
3,765
Underground
Borehole Total Length
Count
(metres)
184
38,389
Years Drilled
1988 – 1993, 2005 – 2008
157
37,432
2006 – 2012
102
28,079
1992 – 2005
599
1,042
117,040
220,940
1992 – 2015
All boreholes are collared with HQ-sized equipment; boreholes size was reduced in long boreholes
or in fracture zones. All drilling in the Santos mine was originally completed by the Connors Drilling
Group. More recent drilling was completed by Boart-Longyear.
9.2.2 Alcaparrosa Mine
The borehole database for the Alcaparrosa mine contains 972 boreholes (219,200 metres) drilled
from surface and underground locations. The database is subdivided into six sectors (Table 9).
Table 9: Summary of Drilling Activities Completed at the Alcaparrosa Mine
Sector
Main Sector
Caseron 11
North
Northwest
Central
Sur oeste
SW-SE-CE
Total
Surface
Underground
Borehole Total Length Borehole Total Length Year Drilled
Count
(metres)
Count
(metres)
102
41,037
151
34,026 1990 – 1997, 2003, 2004
38
4,125 2007, 2009
3
1,744
55
12,938 1990, 1991, 1997, 2004, 2005, 2008, 2009
3
1,538
75
13,643 1990, 1992, 1994, 1997, 2004, 2007, 2009, 2010
6
2,259
115
16,600 1990, 1993, 1994, 2007, 2011
2
77
14,463 1992, 1994, 1997, 2007, 2011, 2012, 2013
59
22,984
286
53,843 1990 –1997, 2003, 2004, 2006, 2007, 2010 – 2013
175
69,562
797
149,638
September 4, 2015
9.3
Page 32
Sampling Method and Approach
Logging and sampling procedures at Minera Candelaria and Minera Ojos del Salado follow similar
approaches using documented protocols. Geology logging records information about rock type,
mineralogy, textures, structures, mineralization, and alteration. Geotechnical logging records
information about core recovery, rock quality designation (RQD), hardness, and the number and
nature of fractures. In addition, point load tests were performed at selected intervals. Until
January 2012, geotechnical logging was performed by mine personnel, after this date that work was
contracted. Core photographs were initially taken of uncut core, later core photos were taken from
cut core.
Until 2006, samples were taken at 1-metre intervals. From 2007 onward, sample intervals for the
open pit were increased to 2 metres. Analytical samples were taken from core cut lengthwise using a
diamond saw. Half of the core is retained in core boxes for reference. For the Candelaria open pit,
core was sampled from two bench heights above known mineralization to the bottom of the
borehole. For the underground mines, core is sampled on the basis of visible sulphides. At
Candelaria core samples are 2 metres in length. In the underground mines, core samples are 1 metre
in length. The top parts of boreholes were not sampled. Sampling is carried out by a contractor under
the supervision of mine personnel.
Primary information such as collar coordinates, survey data, as well as geological and geotechnical
logging data was entered into Microsoft® Excel sheets and later aggregated into a final database by
authorized personnel from the geology team. Since 2014 logging information is captured digitally
and transferred to the main project database automatically.
9.4
SRK Comments
SRK is of the opinion that the drilling and sampling procedures adopted by the Candelaria Copper
Mining Complex are consistent with generally recognized industry best practices. The resultant
drilling pattern is sufficiently dense to interpret the geometry and the boundaries of the copper and
gold mineralization with confidence. The core samples were collected by competent personnel using
procedures meeting generally accepted industry best practices. The process was undertaken or
supervised by suitably qualified geologists. SRK concludes that the samples are representative of the
source materials and there is no evidence that the sampling process introduced a bias.
September 4, 2015
Page 33
10 Sample Preparation, Analyses, and Security
10.1 Historical Samples
The borehole sampling preparation, analyses, and security procedures utilized by ENAMI and its
predecessors between 1929 and 1985 are unknown.
10.2 Core Samples (1985 to Present)
10.2.1 Mineral Candelaria
Analytical samples informing the Candelaria Mineral Resources were prepared and assayed at the
Candelaria mine site. In 2014, the laboratory was certified to ISO17025 by the National Institute of
Standardization (INN) of Chile for the analyses of copper, iron, zinc, and silver. Compliance to the
ISO standard is being verified yearly by the INN. The laboratory is not independent from Minera
Candelaria.
Analytical samples informing the Ojos del Salado Mineral Resources were prepared and assayed by
Intertek (formerly Vigalab) in Tierra Amarilla, Chile. Intertek is a global group operating
13 laboratories in Chile with a management system accredited to ISO9001. Intertek’s laboratories are
independent from Minera Ojos del Salado.
Minera Candelaria uses Intertek in Copiapó as an umpire laboratory.
Prior to 2006, Minera Ojos del Salado used Geolab as an umpire laboratory. As far as SRK was able
to determine, Geolab is independent from Minera Ojos del Salado. After 2006, Minera Ojos del
Salado used ALS Limited (ALS) laboratory in Coquimbo as an umpire laboratory. The management
system of the ALS Minerals Group laboratories is accredited to ISO-9001:2000 by QMI
Management Systems. ALS is independent from Minera Ojos del Salado.
The sample preparation and analytical methodologies used for assaying Candelaria and Ojos del
Salado samples are identical.
Upon reception, sample details are recorded and insertion points for quality control samples in the
sample stream are determined. Sample preparation includes drying at 105 degrees Celsius in a forced
air furnace, primary crushing to 100 percent passing 5 millimetres, secondary crushing cycle to 90
percent passing 1.68 millimetres (12 mesh). Grinding tests are conducted on every 40th sample.
From the crushed material two 1-kilogram samples (Sample A and B) are prepared using a rotary
splitter. Coarse rejects are retained and kept in storage. Both samples A and B are pulverized
separately to 95 percent passing 0.106 millimetres (140 mesh). Sample A is subdivided into four
subsamples: one subsample with approximately 200 grams, and three subsamples weighing
approximately 100 grams each. Sample B is subdivided into two subsamples: one weighing
approximately 200 grams and the other approximately 100 grams. The two heavier subsamples are
kept for future reference or as backup should more sample material be required.
Copper, silver, zinc, and iron are analyzed by multi acid digestion and atomic absorption
spectroscopy (AAS). Copper assays greater than 6 percent are re-analyzed systematically. Gold is
September 4, 2015
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also assayed in 30-gram aliquots by fire assay with AAS finish. Minera Ojos del Salado began
assaying for zinc in January 2015.
Assay data are loaded directly from digital assay result files into the final database in order to
minimize entry errors.
10.3 Specific Gravity Data
Specific gravity (SG) is measured systematically over the full sample intervals. For each sample
interval, all core fragments larger than 5 centimetres in length are collected and used to measure
specific gravity using a water displacement method without paraffin coating. Measurements are
duplicated every 20 measurements and the scale is checked frequently using a 2-kilogram weight.
10.4 Quality Assurance and Quality Control Programs
Quality assurance and quality control programs are typically set in place to ensure the reliability and
trustworthiness of the exploration data. They include written field procedures and independent
verifications of aspects such as drilling, surveying, sampling and assaying, data management, and
database integrity. Appropriate documentation of quality control measures and regular analysis of
quality control data are important as a safeguard for the project data and form the basis for the
quality assurance program implemented during exploration.
Analytical control measures typically involve internal and external laboratory control measures
implemented to monitor the precision and accuracy of the sampling, preparation, and assaying. They
are also important to prevent sample mix-up and monitor the voluntary or inadvertent contamination
of samples. Assaying protocols typically involve regular duplicate and replicate assays and insertion
of quality control samples. Check assaying is typically performed as an additional reliability test of
assaying results. This typically involves re-assaying a set number of rejects and pulps at a second
umpire laboratory.
10.4.1 Historical Analytical Quality Control at Alcaparrosa
No information exists about the analytical quality control procedures at Alcaparrosa between 1929
and 1985.
10.4.2 Analytical Quality Control (1985 to Present)
Candelaria
The analytical quality control program implemented at Candelaria includes the use of control
samples (coarse and pulp duplicate samples and reference material samples) inserted within all
samples submitted for assaying. Pulp duplicate samples are inserted at a rate of one every
20 samples. Preparation duplicate samples from the B samples (see section 10.2) are inserted at a
rate of one every 40 samples.
Six different reference materials were created from Candelaria samples and certified for copper and
gold by round robin testing under the supervision of ALS Minerals in Copiapó. Copper grades of the
reference material range from 0.5 to 3.69 percent copper. Reference material samples were inserted
at a rate of one every 20 samples.
September 4, 2015
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After sample preparation, pulps are relabeled. A duplicate and approximately 5 percent of the
samples are sent to the umpire laboratory.
Ojos del Salado
Prior to 2006, the analytical quality control program at Ojos del Salado consisted of the use of
control samples (pulp duplicate samples) and the use of check assaying at an umpire laboratory. No
field duplicates, standard reference material, or blank material were submitted prior to 2006.
Analysis of quality control data during this time by AMEC (2013b) highlighted the poor
performance of the pulp duplicate samples, especially for copper. Because the duplicate samples
performed better for gold, AMEC (2013b) concluded that the overall performance of the quality
control data was satisfactory.
Starting in 2006, Minera Ojos del Salado changed the analytical quality control procedures to
replicate those in use at Candelaria.
10.5 Sample Security
Information about the sample security in the historical exploration period prior to Minera Candelaria
and Minera Ojos del Salado’s involvement is unavailable.
All drilling assay samples are collected by a contractor under the direct supervision of a mine
geologist. Samples from Candelaria are processed and analyzed entirely at the mine site. Samples
from Ojos del Salado are shipped directly from the property to the Intertek laboratory in Tierra
Amarillo.
Assay samples are collected by appropriately qualified staff at the laboratories. Sample security
involved maintaining the chain of custody of samples to prevent inadvertent contamination or
mixing of samples and rendering active tampering as difficult as possible.
During the site visit, SRK found no evidence of active tampering or inadvertent contamination of
assay samples collected either on the Candelaria or Ojos del Salado properties.
10.6 SRK Comments
SRK reviewed the field procedures and analytical quality control measures used by Minera
Candelaria and Minera Ojos del Saldo. In the opinion of SRK, company personnel used care in the
collection and management of the field and assaying exploration and production data. Based on
historical reports and data available, SRK has no reason to doubt the reliability of exploration and
production information provided by the Candelaria Copper Mining Complex. The reports and
analytical results examined by SRK suggest that the analytical results delivered by the primary
laboratories used by the Candelaria Copper Mining Complex are free of apparent bias.
In the opinion of SRK, the sampling preparation, security, and analytical procedures used by the
Candelaria Copper Mining Complex are consistent with generally accepted industry best practices
and are therefore adequate to support Mineral Resource estimation.
September 4, 2015
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11 Data Verification
11.1 Verifications by the Candelaria Copper Mining Complex
The exploration and production work completed by the Candelaria Copper Mining Complex was
conducted using documented procedures and involved extensive verification and validation of
exploration and production data prior to them being considered for geological modelling and Mineral
Resource estimation. During drilling, experienced mine geologists implemented industry standard
measures designed to ensure the reliability and trustworthiness of the exploration data.
The Candelaria Copper Mining Complex monitors the analytical quality control data on a real-time
basis. Quality control failures are investigated and appropriate actions are taken when necessary,
including requesting re-assaying of certain batches of samples.
11.2 Verifications by SRK
11.2.1 Site Visit
In accordance with National Instrument 43-101 guidelines, a team of professionals under the
supervision of SRK visited the Candelaria and Ojos del Salado properties from June 10 to 12 and
from June 14 to 16, 2014, accompanied by representatives of Lundin. The team included Glen Cole,
PGeo, Gary Poxleitner, PEng, and Maria Ines Vidal, MAusIMM, from SRK, and Daniel Sepulveda,
and John Nilsson, PEng, both independent consultants.
SRK conducted another site visit from July 6 to July 10, 2015. The team included Jean-Francois
Couture, PGeo, Gary Poxleitner, PEng, and Maria Ines Vidal, MAusIMM, from SRK, and John
Nilsson, PEng, an independent consultant. Jean-Francois Couture, Gary Poxleitner, and John Nilsson
are qualified persons pursuant to National Instrument 43-101.
Both site visits took place during active drilling and production activities. All aspects that could
impact materially the integrity of the data informing the Mineral Resources (core logging, sampling,
analytical results, and database management) were reviewed with Minera Candelaria and Minera
Ojos del Salado staff. SRK was able to interview mine staff to ascertain exploration and production
procedures and protocols.
SRK examined core from several boreholes and found that the logging information accurately
reflects actual core. The lithology contacts checked by SRK match the information reported in the
core logs.
SRK toured the Candelaria open pit and the Candelaria Norte underground mine, one of the three
underground operations. Areas of the mine observed included mine development, mucking of draw
points, and truck haulage roads. Furthermore, SRK observed core and stope drilling. Other
infrastructures inspected include the proposed new Los Diques tailings storage facility, the
maintenance facility, wash bays, and refuge stations. SRK toured and reviewed the engineering
department and aspects of its work including engineering drawings, mine planning, and Mineral
Reserve estimates.
September 4, 2015
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11.2.2 Review of Exploration Data and Mineral Resource Models
SRK reviewed the borehole databases, Mineral Resource models, and planned and existing mine
infrastructure. For the preparation of this technical report, SRK was able to reproduce block model
estimates for a representative sample of the block models to a satisfactory degree.
SRK also completed statistical comparison of the global block models grade against the informing
drilling data and visually compared on plans and sections the block models against the informing
composites to confirm that the various models are generally an adequate representation of the
distribution of the copper, gold, and silver mineralization.
The Candelaria open pit Mineral Resource model is routinely compared against the production
model derived from blasthole samples and the Mineral Resource estimation parameters are
periodically adjusted accordingly. Generally, the Mineral Resource model under evaluates the metal
content of a bench by a few percent relative to the blasthole model.
After comparing the Candelaria open pit Mineral Resource model against the informing composites
and the statistics of the production model, SRK concludes that the Candelaria estimation approach
produces a reasonable and reliable model adequate to support open pit mining. The slight difference
between the two models can be explained by grade over-smoothing in the resource model.
September 4, 2015
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12 Mineral Processing and Metallurgical Testing
The Candelaria Copper Mining Complex is a mature mining operation. Mineral processing and
metallurgical testwork completed prior to the commissioning of the Candelaria and Pedro Aguirre
Cerda (PAC) processing plants are not relevant to this technical report. Both processing plants have
been in operation for many years and produce copper concentrates that are sold to customers
worldwide (see Section 18). A summary of the performance of the processing plants is provided in
Section 16 of this technical report. Metal recovery assumptions are derived by ore type from
historical performance of the processing plants. Other than those stated in Sections 16 and 18, there
are no other processing factors or deleterious elements that could have a significant impact on
economic extraction.
As part of the ongoing operations, both processing plants undertake ongoing testing programs. This
section describes the testing programs undertaken and updated during normal operations.
12.1 Metallurgical Testing at the Candelaria Processing Plant
Minera Candelaria maintains regular metallurgical testing programs that are incorporated into
statistical models to predict historical metallurgical performance and improve its processing
performance in terms of mill throughput, metal recovery to concentrate, and final concentrate grade.
Metallurgical tests are executed in a number of specialized facilities such as Universidad de Atacama
and at commercial third party laboratories in Chile and North America, including SGS Mineral
Services, Dawson Metallurgical Laboratories Inc., and JKTech.
Regular testing by Geological Unit (Unidad Geológica, UG) includes rock hardness classification
(see Table 10) and bench scale flotation testing correlated with industrial scale performance to
predict mill throughput and metallurgical performance.
Table 10: Rock Hardness Classification
Hardness Category
Extra Hard
Hard
Intermediate
Soft
UCS MPa
180 to 240
140 to 180
100 to 140
20 to 100
Figure 15 shows the structure of the throughput forecasting model that is updated and maintained by
Candelaria personnel. Relationships between ore type UG and specific energy (kWh/t) and pebble
rate are used to predict grinding circuit power requirements and therefore, plant capacity based on
mill availabilities.
In addition, copper recovery to final concentrate is modelled by UG, including factors for grind size
(and its effect on tailings grade), zinc head grade and stockpile oxidation. Currently, no effect of
secondary copper minerals (e.g., acid soluble copper) is included in the copper recovery model.
September 4, 2015
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WORK INDEX
LABORATORY
SCALE
ARD
CHARACTERIZATION
SAG
UCS TEST
SAMPLES
UG/RQ
SAG MILL
RAMP UP
PILOT
SCALE
MINE
SAG MILL
TEST
CONVENTIONAL
MILL TEST
PRODUCTION
MODEL
CEE
(Kwh/Tonne)
% PEBBLES
EXTRACTION
Figure 15: Structure of Throughput Forecasting Model
Precious metal recovery is not related to UG, but is relatively constant for both gold and silver
depending on the open pit or underground source.
12.2 Mineralogy
The sulphide mineralization at Candelaria and Ojos del Salado is classified as an IOCG deposit
where minerals of interest occur in breccia, stockwork, and veinlets, disseminated in andesite rock.
Copper and magnetite minerals coexist or appear independent from each other in the host rock.
Largely dominant minerals are potassium feldspar, biotite, quartz, and plagioclase. The sulphide
mineralization is dominated by pyrite while copper is present as chalcopyrite representing
approximately four percent of the mineralization (Figure 16).
Biotite
21.0%
Muscovite
4.6%
Chlorite
4.0%
Epidote
2.8%
Amphibole/Pyroxene
6.6%
Iron Oxides
4.0%
Plagioclase
5.4%
Chalcopyrite
3.8%
Pyrite
7.0%
K‐Feldspar
23.3%
Quartz
11.3%
Figure 16: Typical Mill Feed Mineralogy (QEMSCAN Analysis)
September 4, 2015
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Chalcopyrite is present across all size fractions with approximately 70 percent contained in the
+38 micrometres range. Similarly, the dominant mineralogy species (including iron oxides) maintain
their presence across all grind sizes. Gold and silver are associated with sulphide minerals, primarily
chalcopyrite but also pyrite. Varying gold content in the pyrite is associated with gold losses to
flotation tailings.
September 4, 2015
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13 Mineral Resource Estimates
13.1 Introduction
The Mineral Resources for Minera Candelaria comprise primarily of the operational Candelaria
deposit, which is mined by open pit mining methods and a secondary component located in the
northeast and south of the Candelaria pit that is mined by underground mining methods (Candelaria
Norte, Damiana, and Susana). The Mineral Resources for Minera Ojos del Salado comprise two
deposits, Alcaparrosa and Santos, mined by underground mining methods. The Candelaria open pit
and the Damiana and Susana Mineral Resource models were generated by the Technical Services
Department at Minera Candelaria, whereas the underground Mineral Resource models (Candelaria
Norte, Alcaparrosa, and Santos) were generated by the Exploration Department at Minera Ojos del
Salado.
SRK reviewed and audited the Mineral Resource models generated by Minera Candelaria and
Minera Ojos del Salado personnel. This section outlines the Mineral Resource estimation
methodology and summarizes the key assumptions considered for the preparation of the open pit and
underground Mineral Resource models.
In the opinion of SRK, the Mineral Resource evaluation reported herein is a reasonable
representation of the Mineral Resources found at the Candelaria Copper Mining Complex at the
current level of sampling. The Mineral Resources have been estimated in conformity with generally
accepted CIM Estimation of Mineral Resource and Mineral Reserves Best Practices Guidelines and
are reported in accordance with Canadian Securities Administrators’ National Instrument 43-101.
Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. There is
no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves.
13.2 Resource Estimation Procedures
13.2.1 Introduction
The Mineral Resource estimation methodology and procedures adopted for the open pit and
underground Mineral Resource models are outlined in this section. The methodology used for the
Candelaria open pit is discussed separately from that collectively used for the various underground
deposits at Minera Candelaria (Candelaria Norte, Damiana, and Susana) and Minera Ojos del Salado
(Alcaparrosa and Santos).
13.2.2 Open Pit
The database informing the Mineral Resources comprises 2,618 core and percussion boreholes
(801,500 metres) which include 43 new boreholes (23,293 metres) drilled in 2013 from surface in
the open pit. All exploration data are securely managed within an acQuire database.
Drilling data are used to generate 35-metre spaced geology sections and 16-metre spaced geology
plans, which are modelled within MineSight software as polyline files. Combined section and plan
lithology polyline files are used to code Mineral Resource blocks with a rock type code. Copper
grade shells (0.2 percent and 1.5 percent copper) are also modelled.
September 4, 2015
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The individual assays are composited to a 16-metre length, which corresponds to the open pit bench
height. Experimental covariance was utilized to assess the spatial correlation of the copper, gold,
silver, and specific gravity values using composited data. The anisotropy directions were verified
against blast hole grade data and modelled geological units.
A 10 by 10 by 16 metres block model was generated. A nearest neighbour kriging method was used.
Grade capping was applied to the 97.8 percentile of the composite population, which was evaluated
for all three metals as well as for each geological unit independently. During estimation, a further
search restriction (15 metres) was applied to high grade outliers. A hard boundary was applied for
each geological unit constrained with the 0.2 percent and the 1.5 percent copper grade shells, using a
search ellipse of 100 by 100 by 50 metres, oriented according to the covariance model.
The nearest neighbour kriging algorithm was informed by a minimum of one composite and a
maximum of 16 restricted to three composites per borehole. This algorithm was chosen to exercise
control of the local smoothing effect by assigning more weight to the nearest composites. Specific
gravity for each rock type was also estimated by a nearest neighbour kriging algorithm, using a
spherical estimation search informed by a minimum of two composites and a maximum of 12 with a
maximum of three composites per borehole.
Mineral Resource classification was based on the distance to the nearest composite and the minimum
number of boreholes used to estimate a block. The majority of the Mineral Resources are classified
as Measured (Table 11).
Table 11: Classification Parameters (Open Pit and Underground)
Classification
Measured
Indicated
Inferred
Minimum Number of
Informing Boreholes
3
3
2
2
1
Distance
(metres)
Less than 35
35 to 70
Less than 35
35 to 70
0 to 70 and above
Open pit Mineral Resources include those classified blocks above a cut-off grade of 0.2 percent
copper within a conceptual pit shell (based on metal prices of US$3.16 per pound of copper and
US$1,000 per ounce of gold).
13.2.3 Underground
Data and interpolation parameters considered for the preparation of the Mineral Resource models for
the underground mines are summarized in Table 12 to Table 15. There are eight models for Minera
Candelaria, including two new models: Damiana/Susana, Wendy Norte/Elisa Norte II/Lila South.
There are 11 models for Minera Ojos del Salado, seven at Alcaparrosa and four at Santos, including
six new models, Southwest, Southeast, Central Este, and Viviana, at Alcaparrosa; and Helena Sur
and Melendez Central, at Santos.
The interpolation methodology applied for the underground Mineral Resource models is similar to
that outlined for the Candelaria open pit Mineral Resource model. Notable differences include:



Twenty-five-metre or 35-metre spaced geology sections and 4-metre spaced geology plans
modelled as polyline files applied to code the models with lithology
Composite lengths vary from 2 to 4 metres
Interpolation restricted to within 0.4 percent copper grade shells
September 4, 2015


Page 43
Smaller block sizes
Interpolation method is ordinary kriging for copper and specific gravity and an inverse
distance algorithm for gold and silver
Table 12: Underground Interpolation Data and Parameters for Candelaria
Candelaria
Parameter
Drilling
Type
Number(1)
Metres
Data
Samples(2)
Compositing
No. Composites
Capping
Wireframe
Interpolation
Domaining
Variables
Susana
Damiana
80
21,708
50
15,522
Core drilling
22,897
37,137
16 m
16m
1,509
3,684
Restricted search capping used (97.8 percentile of data)
Geological units and grade shells
Block Model Extent (m)
Block size (m)
Method
Classification
Geological units (hard) and grade shells (soft)
Cu, Au, Ag, SG
2,300x
4,100x
1,168
10 x 10 x 16
Nearest Neighbour Kriging
Measured, Indicated, Inferred (see Table 11)
(1) Only the boreholes effectively used in the model are counted
(2) Only samples with copper grades and domain assignation counted
Table 13: Underground Interpolation Data and Parameters for Candelaria Norte
Candelaria Norte
Parameter
Candelaria
North
Elisa
North
Sector
Wendy
Sur
Drilling
Type
Core drilling
Number(1)
388
108
55
99
Metres
72,823
18,503
13,233
24,738
Data
Samples(2)
57,653
17,502
9,187
17,275
Compositing
2m
4m
2m
2m
No. Composites
30,182
5,220
4,736
9,179
Capping
Wireframe
Lithological and mineralization wireframes created
Interpolation
Domaining
Block size (m)
Method
Classification
Elisa North
Wendy North ,
Elisa North 2,
Lila South
153
29,604
132
25,412
396
98,709
23,152
4m
6,491
21,040
4m
5,802
77,727
4m
21,299
Estimation domains for grades built combining lithology and mineralization. Hard boundaries used. SG estimated
using lithological domains.
Variables
Block Model
Extent (m)
Wendy
Central
Cu, Au, Ag, SG
900x
300x
600x
400x
400
400
2x2x2 5x5x4
Inverse distance
(ordinary kriging and
nearest neighbour
used for checking)
500x
350x
260
2x2x2
550x
400x
400
2x2x2
Ordinary kriging for Cu and SG
Inverse distance for Au and Ag
600x
400x
448
5x5x4
Cu, Au, A, Fe,
Cu, Au, Ag, SG
Magnetite, SG
500x
2,200x
400x
1,800x
560
1,240
5x5x4
5x5x4
Inverse distance
for Au, Ag, Fe,
magnetite
Nearest neighbour
kriging
(1) Only the boreholes effectively used in the model are counted
September 4, 2015
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Table 14: Underground Interpolation Data and Parameters for Alcaparrosa
Alcaparrosa
Parameter
Alcaparrosa
Drilling
Type
(1)
Number
Metres
Data
Samples(2)
Compositing
No. Composites
Capping
Caseron 11
253
75,062
North
Sector
39
4,125
North
West
Southwest,
Southeast,
Central Este
Central
Core drilling
58
78
14,681
15,180
124
20,180
345
76,828
Viviana
126
40,401
40,162
2m
21,263
3,818
9,494
12,440
14,033
61,069
28,967
4m
2m
2m
4m
4m
4m
1,114
4,915
6,452
3,885
16,705
8,328
Geological units and grade
shells
Wireframe
Interpolation
Domaining
Estimation domains for grades built combining lithology and mineralization.
Hard boundaries used. SG estimated using lithological domains.
Variables
800x
800x
600
2x2x2
Block Model
Extent (m)
Block size (m)
350x
200x
300
5x5x4
Inverse distance
(ordinary kriging and
nearest neighbour
used for checking)
Method
Classification
Cu, Au, Ag, SG
350x
450x
200x
150x
350
400
2x2x2 2x2x2
Lithological units and grade
shells. Hard boundaries used.
500x
200x
400
5x5x4
1,100x
500x
1,000
5x5x4
1,500x
500x
1200
5x5x4
Nearest neighbour kriging for Cu,
Au, Ag
Ordinary kriging for SG
(1) Only drillholes effectively used in the model are counted
Table 15: Underground Interpolation Data and Parameters for Santos
Parameter
Supernova
Drilling
Type
Number(1)
Metres
Data
Samples (2)
Compositing
No. Composites
Capping
Wireframe
Interpolation
Domaining
Santos
Melendez Sur Melendez Central
Core drilling
157
37,432
184
38,389
102
28,079
138
28,057
30,468
35,226
27,640
4m
4m
4m
8,490
9,257
7,241
21,664
4m
5,477
Estimation domains for grades built combining lithology and mineralization. Hard boundaries
used. SG estimated using lithological domains.
Variables
Block Model Extent (m)
Block size (m)
Method
Cu, Au, Ag, SG
750x
1,000x
450x
500x
800
900
5x5x4
5x5x4
600x
400x
600
5x5x4
Classification
Helena Sur
Nearest neighbor
kriging
1,000x
800x
800
5x5x4
Nearest neighbor kriging
for Cu
Ordinary kriging for Au,
Ag, and SG
(1) Only drillholes effectively used in the model are counted
September 4, 2015
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13.3 SRK Comments
Since acquiring the Candelaria Copper Mining Complex in November 2014, Lundin has put a
greater emphasis on accelerating the interpretation and modelling of the exploration data to increase
the Mineral Resources. These efforts paid off because during the first half of 2015, eight new
Mineral Resource models were prepared (two at Minera Candelaria and six at Minera Ojos del
Salado), resulting in a significant expansion of the Mineral Resources of the underground mines,
contributing to the extension of their life.
SRK is of the opinion that the exploration program proposed for the period 2016 – 2018 has the
potential to expand further the Mineral Resources of the underground mines, with a positive impact
on their life.
13.4 Mineral Resource Statement
CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) defines a
Mineral Resource as:
“A Mineral Resource is a concentration or occurrence of solid material of economic interest in or
on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects
for eventual economic extraction. The location, quantity, grade or quality, continuity and other
geological characteristics of a Mineral Resource are known, estimated or interpreted from specific
geological evidence and knowledge, including sampling.”
The “reasonable prospects for eventual economic extraction” requirement generally implies that the
quantity and grade estimates meet certain economic thresholds and that the Mineral Resources are
reported at an appropriate cut-off grade that takes into account extraction scenarios and processing
recoveries. Mineral Resources are not Mineral Reserves and have not demonstrated economic
viability. There is no certainty that all or any part of the Mineral Resource will be converted into
Mineral Reserves.
The audited Mineral Resource Statement for Minera Candelaria is presented in Table 16. Open pit
Mineral Resources are reported within a conceptual Lerchs-Grossman pit shell based on metal prices
of US$3.16 per pound of copper and US$1,000 per ounce of gold and at a cut-off grade of
0.2 percent copper. Underground Mineral Resources from Candelaria Norte are reported at a cut-off
grade of 0.6 percent copper. Table 16 also includes a contribution from various operational work-inprogress (WIP) stockpiles. The Mineral Resources include Mineral Reserves.
The audited Mineral Resource Statement for Minera Ojos del Salado is presented in Table 17. The
Mineral Resources for the underground Santos and Alcaparrosa mines are reported at a cut-off grade
of 0.6 percent copper.
The audited combined Mineral Resource Statement for the Candelaria Copper Mining Complex is
presented in Table 18.
September 4, 2015
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Table 16: Audited Mineral Resource Statement*, Compañía Contractual Minera Candelaria,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis)
Classification
Candelaria Open Pit
Measured
Indicated
Inferred
Candelaria Norte Underground
Measured
Indicated
Inferred
WIP**
Measured
Indicated
Inferred
Combined
Measured
Indicated
Inferred
*
Quantity
Tonnes
(’000)
Contained Metal
Copper
Gold
Silver
(’000)
(’000)
(’000)
Copper
(%)
Grade
Gold
(g/t)
Silver
(g/t)
400,600
31,889
432,489
15,862
0.56
0.48
0.55
0.36
0.13
0.13
0.13
0.11
1.92
1.74
1.91
1.29
2,225
154
2,379
57
1,637
129
1,766
54
24,707
1,787
26,494
658
36,019
26,848
62,866
58,391
1.10
1.16
1.13
1.13
0.26
0.28
0.27
0.26
5.54
6.57
5.98
7.49
396
312
708
661
304
244
548
480
6,417
5,674
12,091
14,052
93,849
0.36
0.09
1.49
335
263
4,487
93,849
0.36
0.09
1.49
335
263
4,487
530,468
58,736
589,204
74,253
0.56
0.79
0.58
0.97
0.13
0.20
0.14
0.22
2.09
3.95
2.27
6.16
2,956
467
3,423
718
2,204
373
2,577
533
35,610
7,461
43,072
14,710
Reported within the boundaries of the Compañía Contractual Minera Candelaria property. Mineral Resources are not
Mineral Reserves and have not demonstrated economic viability. All figures are rounded to reflect the relative accuracy of
the estimates. Mineral Resources include Mineral Reserves. Open pit Mineral Resources reported at a cut-off grade of
0.2 percent copper within a conceptual pit shell based on metal price of US$3.16 per pound of copper and US$1,000 per
ounce of gold and current topography. Underground Mineral Resources are reported at a cut-off grade of 0.6 percent
copper. Parts of the open pit Mineral Resources have been converted into underground Mineral Reserves.
Table 17: Audited Mineral Resource Statement*, Compañía Contractual Minera Ojos del
Salado, SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis)
Quantity
Tonnes
(’000)
Classification
Santos
Measured
Indicated
Inferred
Alcaparrosa
Measured
Indicated
Inferred
Combined
Measured
Indicated
Inferred
*
Grade
Copper
Gold
(%)
(g/t)
Silver
(g/t)
Contained Metal
Copper
Gold
Silver
(’000)
(’000)
(’000)
12,446
5,965
18,411
1,017
1.20
1.15
1.19
1.18
0.26
0.25
0.26
0.23
4.73
4.81
4.76
4.37
150
69
219
12
104
48
153
8
1,894
923
2,818
143
17,504
18,493
35,997
7,407
1.14
1.04
1.09
1.07
0.25
0.23
0.24
0.24
3.34
3.51
3.43
3.10
199
192
392
79
141
136
278
57
1,882
2,085
3,967
737
29,950
24,459
54,408
8,424
1.17
1.07
1.12
1.08
0.26
0.23
0.25
0.24
3.92
3.82
3.88
3.25
349
261
611
91
246
185
430
64
3,777
3,008
6,785
880
Reported within the boundaries of the Compañía Contractual Minera Ojos del Salado property. Mineral Resources
are not Mineral Reserves and have not demonstrated economic viability. Mineral Resources include Mineral
Reserves. All figures are rounded to reflect the relative accuracy of the estimates. Reported at a cut-off grade of
0.6 percent copper, based on metal price of US$3.16 per pound of copper and US$1,000 per ounce of gold.
September 4, 2015
Page 47
Table 18: Consolidated Audited Mineral Resource Statement*, Candelaria Copper Mining
Quantity
Tonnes
(’000)
Classification
Open Pit
Measured
Indicated
Inferred
Underground
Measured
Indicated
Inferred
WIP**
Measured
Indicated
Inferred
Combined
Measured
Indicated
Inferred
*
Grade
Copper
Gold
(%)
(g/t)
Silver
(g/t)
Contained Metal
Copper
Gold
Silver
(’000)
(’000)
(’000)
400,600
31,889
432,489
15,862
0.56
0.48
0.55
0.36
0.13
0.13
0.13
0.11
1.92
1.74
1.91
1.29
2,225
154
2,379
57
1,637
129
1,766
54
24,707
1,787
26,494
658
65,968
51,306
117,274
66,815
1.13
1.12
1.12
1.13
0.26
0.26
0.26
0.25
4.81
5.26
5.01
6.95
745
574
1,319
752
550
428
978
544
10,194
8,682
18,876
14,932
93,849
0.36
0.09
1.49
335
263
4,487
93,849
0.36
0.09
1.49
335
263
4,487
560,417
83,195
643,612
82,676
0.59
0.88
0.63
0.98
0.14
0.21
0.15
0.22
2.19
3.91
2.41
5.86
3,305
728
4,033
809
2,450
558
3,007
598
39,387
10,469
49,857
15,589
Reported within the boundaries of the Compañía Contractual Minera Candelaria and Compañía Contractual Ojos del
Salado properties. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. All
figures are rounded to reflect the relative accuracy of the estimates. Mineral Resources include Mineral Reserves.
Open pit Mineral Resources are reported at a cut-off grade of 0.2 percent copper within a conceptual pit shell based
on metal prices of US$3.16 per pound of copper and US$1,000 per ounce of gold and current topography.
Underground Mineral Resources are reported at a cut-off grade of 0.6 percent copper. Parts of the open pit Mineral
Resources have been converted into underground Mineral Reserves.
September 4, 2015
Page 48
13.5 Reconciliation
The Candelaria open pit Mineral Resource model (locally termed long term model) is compared to
grade control models (short term models) on a monthly basis. Grade control models are generated
from closely spaced blast hole data, whereas Mineral Resource models are derived from exploration
core drilling data.
A monthly reconciliation between the Mineral Resource and grade control models for the Candelaria
open pit for the period of July 2014 to June 2015 is presented in Table 19. The reconciliation
between the short and long term models is reasonable. This demonstrates that the Mineral Resource
model adequately predicts quantities and grades achieved during mining.
Table 19: Monthly Reconciliation between Long Short Term Models and the Mill for the
Candelaria Open Pit, Compañía Contractual Minera Candelaria (July 2014 to June 2015)
Period
Jul '14
Aug '14
Sept '14
Oct '14
Nov '14
Dec '14
Jan '15
Feb '15
Mar '15
Apr '15
May '15
Jun '15
Total
Variance*
*
Long Term 2014
Quantity Grade
Metal
’000 (t) Cu (%)
Cu (t)
555
0.46
2,336
1,052
0.57
5,485
1,960
0.66 11,834
1,435
0.69
9,058
1,624
0.79 11,737
1,476
0.81 10,937
1,883
0.77 13,265
1,701
0.87 13,543
1,949
0.69 12,305
1,939
0.78 13,856
1,803
0.78 12,807
2,081
0.61 11,656
19,457
0.72 128,819
Short Term
Quantity
Grade
Metal
’000 (t) Cu (%)
Cu (t)
645
0.49
2,892
1,027
0.56
5,262
2,160
0.65 12,846
1,851
0.77 13,037
1,726
0.77 12,157
1,536
0.73 10,260
2,292
0.72 15,058
1,893
0.88 15,251
2,375
0.67 14,497
2,021
0.69 12,714
2,012
0.66 12,203
2,156
0.53 10,489
21,692
0.69 136,664
-10.3%
5.4%
-5.7%
Mill
Quantity Grade
Metal
’000 (t)
Cu (%)
Cu (t)
363
0.41
1,285
1,311
0.52
5,929
1,672
0.60
8,793
2,059
0.69 12,532
1,256
0.82
9,166
1,415
0.71
8,967
1,675
0.73 11,050
1,930
0.86 14,789
2,126
0.68 13,083
1,959
0.72 12,639
2,124
0.66 12,560
1,992
0.47
8,340
19,882
0.67 119,132
-2.1%
7.7%
8.1%
Long term vs short term and mill
September 4, 2015
Page 49
14 Mineral Reserve Estimates
14.1 Minera Candelaria
14.1.1 Candelaria Open Pit Mineral Reserves
The Candelaria open pit Mineral Reserves estimates were prepared by Minera Candelaria personnel
based upon the Measured and Indicated Mineral Resources defined for the open pit mine. The
Mineral Reserve estimates are based on a mine plan and open pit designs developed using modifying
parameters including metal prices, metal recovery based on performance of the processing plant,
actual operating cost estimates, and sustaining capital cost estimates based on the production
schedule and equipment requirements.
The Mineral Reserve estimation process involved the following tasks:






Selection of optimization parameters
Pit optimization to define optimum pit limit using a Lerchs-Grossman algorithm
Selection of mining cut-off grade
Preparation of a pit design, including pit phases
Preparation of a production schedule
Tabulation of Mineral Reserve Statement
Table 20 summarizes the optimization parameters used in 2015 relative to those considered in 2013
and used for the disclosure of the December 31, 2014 Mineral Reserves.
For the December 31, 2014 Mineral Reserves, site operating costs used for the pit optimization were
pro-rated for the metal prices used for the pit limit definition. Adjustments were made to factor
consumables to reflect a US$2.00 per pound of copper price environment. In addition, adjustments
were been made to General and Administration costs to reflect a reduction in overheads during
mining of the final incremental pit shells.
For the June 30, 2015 Mineral Reserves, site operating costs used for the pit optimization were based
upon actual average operating costs for the three years 2012 through 2014.
Base mining costs excluding haulage are estimated at US$1.65 per tonne mined for an overall
mining rate of 221,000 tonnes per day. Stockpile re-handle costs excluding haulage are estimated at
US$0.97 per tonne. The haulage increment per 16 metre bench is estimated at US$0.029 per tonne
per bench to depth. The fixed milling ore and waste haulage costs are estimated at US$0.05 and
US$0.21 per tonne, respectively. An equipment annuity of US$0.10 per tonne mined was applied to
account for equipment replacement. Discounting has been applied to all block values in the model
for the purposes of pit optimization. The discount rate applied was 12.0 percent and the sinking rate
assumed was 6.32 benches per year resulting in an effective discount factor of 1.90 percent per
bench.
Processing cost estimates include US$0.33 per tonne for crushing and US$8.36 per tonne for milling.
A mill sustaining capital allowance of US$0.76 per tonne was included. The general and
administration costs of US$2.16 per tonne have been assigned to the ore milled. The total processing
costs are estimated at US$11.60 per tonne milled.
September 4, 2015
Page 50
Table 20: Summary of Pit Optimization Parameters
Basic Design Parameters
Copper
Gold
Silver
Discount Rate
Average vertical advance rate
Long term power cost assumption
Long term diesel cost assumption (delivered)
Mining Rate
Mining costs (no haulage)
Stockpile re-handling costs (no haulage)
Haulage increment/dmt/bench
Fixed mill ore haulage cost
Fixed waste haulage cost
Mine equipment capital annuity
Milling Rate
Crushing cost
Milling cost
Mill sustaining capital allowance
G&A assigned to mill
Total Cost
Downstream Costs
Concentrate moisture
Concentrate copper grade
Freight cost
Freight cost (concentrate)
Smelting
Refining
Transportation loss allowance
Net smelter payment incl. trans loss
By-product credits Au, Ag, Fe
Costs /lb W/ By-product Credits
w/o Credits
Royalty
By Product Credits
Au content in Cu concentrate
Au payable term
Au refining cost
Ag content in Cu concentrate
Ag payable term
Ag refining cost
Payable Au
Payable Ag
Other credits
By-Product Credits
Downstream Costs
Concentrate freight
Smelting
Refining
Freight to market & sales costs
Total Before By-Product Credits
Total mine costs
Total mine costs-fragmentation costs
Mining CAF
Total cost/tonne-milled
Units
US$/lb-Cu
US$/oz-Au
US$/oz-Ag
%
bench/yr/PB
US$/kWh
US$/US Gal.
KMTPD
US$/dmt-Mined
US$/dmt-Mined
US$/dmt-Mined
US$/dmt-Mined
US$/dmt-Mined
US$/dmt-Mined
KMTPD
US$/dmt-Milled
US$/dmt-Milled
US$/dmt-Milled
US$/dmt-Milled
US$/dmt-Milled
Dec. 2013
2.00
1,000
15.00
12.0%
6.98
0.120
1.85
263
1.265
0.764
0.022
0.037
0.154
0.400
72
0.254
6.743
0.419
1.635
9.052
June 2015
2.75
1,000
15.00
12.0%
6.98
0.102
2.08
221
1.652
0.966
0.029
0.049
0.208
0.098
64
0.326
8.361
0.756
2.15
11.598
%
%-Cu
US$/wmt
US$/dmt-Concentrate
US$/dmt- Concentrate
US$/lb-Cu
%-loss
%-payable
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
8.5%
31.0%
65.00
71.04
100.00
0.100
0.20%
96.31%
(0.458)
(0.095)
0.363
0.01
8.5%
29.6%
65.00
71.04
100.00
0.100
0.20%
96.31%
(0.492)
(0.116)
0.376
n/a
oz/dmt
%
US$/oz
oz/dmt
%
US$/oz
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/lb-Cu
US$/dmt-Mined
US$/dmt-Mined
ratio
US$/dmt-Milled
0.193
96.0%
4.00
3.50
90.0%
0.35
0.280
0.070
0.108
0.458
0.181
96.0%
4.00
3.50
90.0%
0.35
0.276
0.068
0.147
0.492
0.108
0.152
0.100
0.003
0.363
1.819
1.318
0.725
8.935
0.113
0.159
0.100
0.003
0.376
1.958
1.272
0.649
11.439
September 4, 2015
Page 51
Copper recovery estimates were based on a model developed by the metallurgical group at
Candelaria. This model takes input data for geological, mineralogical and process throughput and
grind size, oxidation and zinc to concentrate as part of the process that provides estimates of final
tailings and concentrate grades and resultant overall copper recovery. The average life of mine
copper recovery is estimated 92.8 percent. Gold and silver recoveries were fixed at 75 and 85
percent, respectively, based upon historical data.
The copper concentrate was assumed to have a fixed copper grade of 29.6 percent with a moisture
content of 8.5 percent. For the pit optimization, the concentrate is assumed to be “clean” with no
applicable smelter penalties. Transportation costs for the concentrate were estimated at US$65.00 per
wet metric tonne or US$71.04 per dry metric tonne. Smelting and refining charges were estimated to
be US$100.00 per dry metric tonne and US$0.10 per payable pound of copper, respectively. Based
upon a 29.6 percent concentrate grade, the copper pay factor is estimated at 96.31 percent. A
transportation loss allowance of 0.20 percent was included.
The payable gold in concentrate was assigned at 96.0 percent with a refining charge of US$4.00 per
ounce. The payable silver in concentrate was assigned at 90.0 percent with a silver refining charge of
US$0.35 per ounce.
The pit optimization was conducted using the resource block model expanded in all directions to
cover the maximum extent of the ultimate pit. A mining block model was populated in Minesight
and Datamine NPV Scheduler. Additional block model items were added for slope coding,
concentrate grades, metallurgical recovery, rock hardness, mining restriction near the tailings
impoundment, and south backfill area of the open pit. No additional mining dilution or losses were
applied to the resource model for the purposes of mine planning. A 100-metre offset pit limit
restriction was applied at the toe of the tailings dam. A boundary restriction was applied at the
topographic divide on the east side of the open pit.
Open pit wall slope recommendations have been provided by Call Nicolas International Company
(CNI), based on comprehensive geo-mechanical studies to support the current operating pit Phases 8
through 10. Similar studies are being conducted for the next planned Phase 11. Inter-ramp slopes
angles range from 45 to 57 degrees. Eight slope sectors were defined with different inter-ramp
slopes, bench face angles, berm intervals, and berm widths (Figure 17). A hardrock surface was used
to control the slope angle in overburden and fill areas in the upper part of the deposit.
The unsmoothed US$2.75 per pound of copper Lerchs-Grossman pit was used as a guide to develop
the ultimate pit design. Design parameters include:




Sixteen-metre bench with double bench between catchment berms
Planned mining widths in the design phases exceeding 100 metres, but pinching down to 40
to 60 metres locally where ramps and phase interfaces come together
Haulage allowances of 33 metres; in practice the ramp width provides adequate room for
berms and two-way traffic with the 240-ton class trucks used at Candelaria
Mining Phases 9 through 13
September 4, 2015
Page 52
Figure 17: Candelaria Open Pit Sectors Geotechnical Design Recommendations
ISA: Inter-ramp slope angle, BFA: bench face angle
Source: Call Nicolas International Company
September 4, 2015
Page 53
The final pit design was used to report the open pit Mineral Reserves, using a topographic profile as
of June 30, 2015. The final pit design mining phases are shown in Figure 18. For the open pit life of
mine plan that supports the open pit Mineral Reserves direct mill feed is scheduled at a variable cutoff grade averaging approximately 0.26 percent copper. The material below that cut-off grade but
above a grade of 0.23 percent copper is stockpiled.
Figure 18: Candelaria Mining Phases
14.1.2 Candelaria Norte Underground Mineral Reserves
The Mineral Reserves for the Candelaria Norte underground mine were prepared by Minera
Candelaria personnel and are based on the Measured and Indicated Mineral Resources defined for
the underground mine. The Candelaria Norte underground mine includes a number of sectors.
During 2015, the Damiana and Susana sectors were added to the south of the open pit mine.
The Mineral Reserve estimates for Candelaria Norte are based on mine plans and designs developed
using modifying parameters including metal prices, metal recovery (based on performance of the
September 4, 2015
Page 54
processing plant), and operating and sustaining capital cost estimates. The operating costs used are
based on actual average operating costs for the three years 2012 through 2014.
The parameters used for the Mineral Reserves are summarized in Table 21.
Table 21: Summary of Candelaria Norte Mineral Reserve Parameters
Parameter
Copper
Gold
Silver
Discount rate
Mining cost including G&A
Milling cost including G&A
Credits
Downstream costs
Cut-off grade
Mining ore recovery by stope setting
Vertical
Inclined
Rib
Pillar
Structural pillar
Mining ore dilution by stope setting
Vertical
Inclined
Rib
Pillar
Structural pillar
Dilutant material
Cu
Au
Ag
Units
US$/lb-Cu
US$/oz-Au
US$/oz-Ag
%
US$/ton
US$/ton
US$/lb Cu concentrate
%
Candelaria Norte
Dec. 2013 June 2015
2.00
2.75
1,000
1,000
15
15
12%
12%
25.08
26.59
9.05
11.60
0.46
0.36
0.37
0.38
0.81%
0.70%
%
%
%
%
%
95%
85%
85%
80%
75%
95%
85%
85%
80%
75%
%
%
%
%
%
10%
30%
30%
40%
50%
10%
30%
30%
40%
50%
%
g/t
g/t
0.30
0.07
1.00
0.30
0.07
1.00
Conversion of Mineral Resources to Mineral Reserves is initiated following the formal transference
of the resource block models to the mine planning group’s MineSight design software package and
then integrated into the global mine layouts where they are then reviewed. All Inferred material in
the model is assigned a grade of zero and thus eliminated from the model. Preliminary stope layouts
are generated by first utilizing Datamine MSO (Mine Stope Optimizer) software with predetermined
stope design parameters. These initial stope designs are reviewed and modified manually to derive
practical and efficient stope geometries, and any geotechnical input is considered. Planned
development in ore is also estimated. The final stope shapes are interrogated and the grades and
tonnages generated. Stope data is exported into a spreadsheet where dilution (with background metal
grades) and mining recovery are then applied.
A unique cut-off grade was generated for the underground mine and is based on a copper price of
US$2.75 per pound. The cut-off grade calculation includes inputs such as:






Copper, gold, and silver metal prices
Mine, surface, and mill operating costs
G & A costs
Sustaining capital
Smelting, refining, freight, and other downstream costs
Metal recoveries
September 4, 2015
Page 55
Stopes that are below the cut-off are not included in the Mineral Reserves. The dilution and recovery
parameters vary depending on each individual stopes geotechnical condition, geometry, and
sequence. All economical stopes and related development are included in the Mineral Reserves and
life of mine plan.
14.2 Minera Ojos del Salado
The Mineral Reserves for Santos and Alcaparrosa underground mines were prepared by Minera Ojos
del Salado personnel and are based on the Measured and Indicated Mineral Resources defined for the
underground mines.
The Mineral Reserve estimates for the Minera Ojos del Salado are based on mine plans and designs
developed using modifying parameters including, metal prices, metal recovery (based on
performance of the processing plant), and operating and sustaining capital cost estimates.
Operating costs used are based on actual average operating costs for the three years 2012 through
2014.
The parameters used for the Mineral Reserves are summarized in Table 22.
Table 22: Summary of Santos and Alcaparrosa Mineral Reserve Parameters
Parameter
Units
Santos
Alcaparrosa
Dec. 2013 June 2015 Dec. 2013 June 2015
Copper
US$/lb-Cu
2.00
2.75
2.00
2.75
Gold
US$/oz-Au
1,000
1,000
1,000
1,000
Silver
US$/oz-Ag
15.00
15.00
15.00
15.00
Discount rate
%
12%
12%
12%
12%
Mining cost including G&A
US$/ton
18.00
23.81
21.02
28.74
Milling cost including G&A
US$/ton
14.84
17.29
9.05
11.60
Credits
0.31
.29
0.38
.38
Downstream costs
0.38
.37
0.37
.38
Cut-off grade
% Cu
0.84%
0.76%
0.75%
0.73%
Mining ore recovery by stope setting
Vertical
%
95%
95%
95%
95%
Inclined
%
85%
85%
85%
85%
Rib
%
85%
85%
85%
85%
Pillar
%
80%
80%
80%
80%
Structural pillar
%
75%
75%
75%
75%
Mining ore dilution by stope setting
Vertical
%
10%
10%
10%
10%
Inclined
%
30%
30%
30%
30%
Rib
%
30%
30%
30%
30%
Pillar
%
40%
40%
40%
40%
Structural pillar
%
50%
50%
50%
50%
Dilutant Material
Cu %
%
0.30
0.30
0.30
0.30
Au g/t
g/t
0.07
0.07
0.07
0.07
Ag g/t
g/t
1.00
1.00
1.00
1.00
The conversion of Mineral Resources into Mineral Reserves at the Santos and Alcaparrosa
underground mines follows the same process applied for the Candelaria Norte underground mine.
A unique cut-off grade was generated for each of the underground mines and is based on a copper
price of US$2.75 per pound. The cut-off grade calculation includes inputs such as:

Copper, gold, and silver metal prices
September 4, 2015





Page 56
Mine, surface, and mill operating costs
G & A costs
Sustaining capital
Smelting, refining, freight, and other downstream costs
Metal recoveries
Stopes that are below the cut-off are not included in the Mineral Reserves. The dilution and recovery
parameters vary depending on each individual stopes geotechnical condition, geometry and
sequence. All economical stopes and related development are included in the Mineral Reserves and
life of mine plan.
14.3 Mineral Reserve Statement
Mineral Reserves are derived from Measured or Indicated Mineral Resources after applying
economic parameters. The reserves have been derived and classified according to the following
criteria:


Proven Mineral Reserves are the economically mineable part of the Measured Mineral
Resources where development work for mining and information on processing/metallurgy
and other relevant factors demonstrate that economic extraction is achievable.
Probable Mineral Reserves are those Measured and Indicated Mineral Resources where
development work for mining and information on processing/metallurgy and other relevant
factors demonstrate that economic extraction is achievable.
The audited Mineral Reserve Statements for Minera Candelaria and Minera Ojos del Salado are
presented in Table 16 and Table 17, respectively. The consolidated Mineral Reserve Statement for
the Candelaria Copper Mining Complex is presented in Table 18.
Table 23: Audited Mineral Reserve Statement*, Compañía Contractual Minera Candelaria,
SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis)
Classification
Quantity Copper
(’000 t)
(%)
Candelaria Open Pit
Proven
298,153
0.57
Probable
16,429
0.52
Total
314,582
0.57
Candelaria WIP**
Proven
93,849
0.36
Probable
–
–
Total
93,849
0.36
Candelaria Norte Underground
Proven
22,617
0.96
Probable
7,217
0.95
Total
29,834
0.96
Combined
Proven
414,619
0.54
Probable
23,646
0.65
Total
438,264
0.55
*
Grade
Gold
(g/t)
Silver
(g/t)
Contained Metal
Copper
Gold
Silver
(’000 t) (’000 oz) (’000 oz)
0.13
0.14
0.13
2.00
1.94
1.99
1,699
85
1,784
1,246
72
1,317
19,137
1,023
20,160
0.09
–
0.09
1.49
–
1.49
335
–
335
263
–
263
4,487
–
4,487
0.24
0.23
0.24
3.95
6.06
4.46
217
69
286
165
55
220
2,874
1,407
4,281
0.13
0.17
0.13
1.99
3.20
2.05
2,252
153
2,405
1,673
127
1,800
26,498
2,430
28,928
Mineral Reserves included in Mineral Resources. Mineral Reserves have been prepared using
Mineral Reserves for open pit and underground are reported at cut-off grades of 0.23 and 0.70
percent copper, respectively. Parts of the underground Mineral Reserves have been converted
from open pit Mineral Resources.
September 4, 2015
Page 57
Table 24: Audited Mineral Reserve Statement*, Compañía Contractual Minera Ojos del
Salado,SRK Consulting (Canada) Inc., June 30, 2015 (100% Basis)
Classification
Santos
Proven
Probable
Total
Alcaparrosa
Proven
Probable
Total
Combined
Proven
Probable
Total
*
Quantity Copper
(’000 t)
(%)
Grade
Gold
(g/t)
Contained Metal
Silver Copper
Gold
Silver
(g/t) (’000 t) (’000 oz) (’000 oz)
5,513
2,368
7,881
1.10
0.88
1.04
0.25
0.20
0.24
4.71
4.09
4.52
61
21
82
44
16
60
834
311
1,145
4,896
4,143
9,038
0.96
0.91
0.94
0.20
0.18
0.19
3.66
4.15
3.88
47
38
85
32
24
55
576
553
1,129
10,409
6,511
16,919
1.04
0.90
0.98
0.23
0.19
0.21
4.21
4.13
4.18
108
59
166
76
39
115
1,410
864
2,274
Underground Mineral Reserves for Alcaparrosa and Santos are reported at cut-off grades of 0.76
and 0.73 percent copper, respectively.
Table 25: Consolidated Audited Mineral Reserve Statement*, Candelaria Copper Mining
Classification
Open Pit
Proven
Probable
Total
WIP**
Proven
Probable
Total
Underground
Proven
Probable
Total
Combined
Proven
Probable
Total
*
Quantity Copper
(’000 t)
(%)
Grade
Gold
(g/t)
Silver
(g/t)
Contained Metal
Copper
Gold
Silver
(’000 t) (’000 oz) (’000 oz)
298,153
16,429
314,582
0.57
0.52
0.57
0.13
0.14
0.13
2.00
1.94
1.99
1,699
85
1,784
1,246
72
1,317
19,137
1.0236
20,160
93,849
–
93,849
0.36
–
0.36
0.09
–
0.09
1.49
–
1.49
335
–
335
263
–
263
4,487
–
4,487
33,025
13,727
46,753
0.98
0.93
0.97
0.23
0.21
0.22
4.03
5.15
4.36
325
127
452
240
94
335
4,284
2,271
6,555
425,028
30,156
455,184
0.56
0.70
0.56
0.13
0.17
0.13
2.04
3.40
2.13
2,359
212
2,571
1,749
166
1,915
27,908
3,294
31,202
Minera Candelaria Mineral Reserves for open pit and underground are reported at cut-off grades of
0.23 and 0.70 percent copper, respectively. Underground Mineral Reserves for Alcaparrosa and
Santos are reported at cut-off grades of 0.73 and 0.76 percent copper, respectively. Parts of the
underground Mineral Reserves have been converted from open pit Mineral Resources.
September 4, 2015
Page 58
15 Mining Methods
15.1 Introduction
Minera Candelaria consists of the Candelaria open pit and the Candelaria Norte underground mine.
In 2015, two new sectors were added to the Candeleria Norte mine: Susana and Damiana, located to
the south of the open pit mine. Minera Ojos del Salado consists of the Santos and Alcaparrosa
underground mines. The Candelaria and the Minera Ojos del Salado facilities are close to each other.
As a result both facilities share a number of surface infrastructures such as the concentrator, tailings
dam as well as a shared management structure. The ore from the Candelaria open pit, Candelaria
Norte, and Alcaparrosa underground mines is processed at the Candelaria concentrator. Ore from the
Santos underground mine is processed at the Pedro Aguirre Cerda (PAC) plant located on the Ojos
del Salado property.
This section describes the open pit and underground mining methods used at the Candelaria Copper
Mining Complex.
The Candelaria open pit mine operates with an overall mining rate of approximately 235,000 tonnes
per day including 66,000 tonnes per day of ore sent to the Candelaria concentrator. The average
grade of the ore mined from the open pit over the remaining life of mine is estimated at 0.57 percent
copper while stockpiled work-in-progress (WIP) material at an average of 0.36 percent copper. The
mine operates seven electric shovels, 46 haulage trucks, eight production drills, and a fleet of support
equipment. The location of the underground mines relative to the Candelaria open pit is shown in
Figure 4.
The Candelaria Norte mine is expected to produce 6,000 tonnes per day of ore for year 2015,
ramping up to a steady state of 7,250 tonnes per day by 2019 as per the life of mine plan. The
average life of mine grade is 0.96 percent copper. The Alcaparrosa mine currently produces
4,000 tonnes per day of ore and is expected to ramp up to a steady state of 4,300 tonnes per day by
year 2016. The life of mine average grade is 0.94 percent copper. The Santos mine will continue to
produce at its current rate of production of 3,750 tonnes per day of ore with an average life of mine
grade of 1.04 percent copper. The mining method in all three underground mines is sublevel open
stoping. The underground mines currently operate in total 13 LHDs (load haul dump vehicles),
10 front end-loaders, 14 jumbos, 10 DTH (down-the-hole) drills, 45 30-ton trucks, 14 man lifts, and
a fleet of support equipment.
September 4, 2015
Page 59
15.2 Open Pit Mine Design and Production Schedule
A life of mine plan for Minera Candelaria is based on the Mineral Reserves reported in Section 14.
The plan is largely driven by supplying ore to the Candelaria processing plant from the open pit mine
and surface stockpiles once the open pit Mineral Reserves have been depleted. The current combined
open pit and WIP stockpile Mineral Reserves are estimated at 408.4 million tonnes at an average
grade of 0.52 percent copper, 0.12 g/t gold, and 1.88 g/t silver. The open pit and WIP stockpile
Mineral Reserves are reported at variable cut-off grades.
The open pit was designed to be mined in several phases of development. As of June 2015, five
phases of development remain in the life of mine plan (Phases 9 to 13). The overall strip ratio is
expected to be 2.8:1 including ore that is initially delivered to stockpiles. The total in-pit waste is
882.9 million tonnes and the overall life of the open pit mine is 17 years. The final pit design and
overall Mineral Reserves including stockpiles are shown in Figure 19.
500 metres
Total Ore to Crusher/Milled (kt)
Mill Grade (%Cu)
Mill Grade (g/t Au)
Mill Grade (g/t Ag)
FEM (%)
Stripping Ratio (excluding stockpiles)
408,431
0.52
0.12
1.88
8.54
2.8
Cu Concentrate (kt) 6,413
Cu Concentrate Grade (%) 30.2
Contained Copper Production (kt)
From Mine
From Stockpile
Total
Contained Au (koz)
Contained Ag (koz)
1,535.1
402.2
1,937.3
1,188
21,010
Figure 19: Summary of Candelaria Open Pit Mine Development
The open pit design is based upon the following key considerations:



Phase development to smooth ore and waste scheduling with stockpile material available to
supplement direct mill feed from the mine
Overall and inter-ramp slope recommendations provided by Call Nicolas International
Company (CNI) including use of pre-shear drilling and blasting
Operating constraints of the equipment available for mining
September 4, 2015



Page 60
Minimum mining width defined by double side loading of trucks with allowance for an
access ramp
Bench height achievable and within the safe operating reach of the primary loading units
Minimum haulage road operating width and maximum effective grade within the operating
limitations of the primary haulage units
The primary components for the open pit slope design include bench geometry, inter-ramp, and
overall slope angles (Figure 20). The current pit dimensions are 2,200 metres by 1,400 metres with a
depth of 700 metres. Current inter-ramp slope angles range from 45 to 52 degrees in the west wall
and from 52 to 57 degrees in the east wall. Bench face angles range from 65 to 72 degrees.
Figure 20: Slope Sectors Rock Quality Designation for Phase 9 (Left) and Phase 11 (right)
The rock at Candelaria has a typical uniaxial compressive strength of over 140 Mpa and is
considered “hard rock”. In the east, any wall instabilities are structurally controlled with north and
northwest being the most critical directions. The failure mechanism in this wall is mainly planar
failure. In the west and north walls the stability is controlled by rock mass conditions. The failure
mechanisms in these walls are wedge and circular type failures. The intersection between the Lar
fault and the Mistral Mirador fault generates a zone of rock weakness. Open wall slope
recommendations have been provided by CNI (see Section 14).
Slope monitoring is carried out in the mine on a continuous basis using robotized monitoring
systems, including two robotic prism monitoring stations, five SlideMinder extensometers,
four GroundProbe SS radar units, nine vibrating wire piezometers, and two web cameras.
The Candelaria open pit is relatively dry owing to its location in an arid region. The northeast wall
appears to be receiving some seepage from the toe of the tailings dam. Horizontal drain holes have
been drilled up to 200 metres into the wall to reduce pore pressures in the area of the Lar fault.
The pit designs include allowances for 32 to 33 metres wide roads including ditches and berms.
Haulage roads within the pit limits have a maximum gradient of 10 percent. The final pit design is
September 4, 2015
Page 61
shown in Figure 19. The flowsheet for the design and scheduling of the Minera Candelaria life of
mine plan is shown in Figure 21.
Figure 21: Candelaria Life of Mine Plan Development Process
The life of mine plan was developed using MineSight and Datamine NPVS software packages. The
resource model and standard mining block model were developed in MineSight. This standard
mining model was then imported to NPVS to calculate economic value items and to develop LerchsGrossman pit limits. A final pit design was then developed in MineSight. NPVS was then used to
develop potential pushback limits. Detailed phase designs were then completed in MineSight and
schedule optimization was undertaken in NPVS. Once a cut-off grade was chosen and a stockpile
strategy was completed, MineSight Strategic Planner was used to create the final detailed schedule
and estimation of the haulage truck requirements.
The mine production schedule for Minera Candelaria and Ojos del Salado for the period 2015 to
2032 is shown in Table 26, which shows the material sent to the Candelaria and PAC plants, and the
forecast processing plant recoveries together with the concentrate and contained copper, gold, and
silver metal. Low grade material from the open pit is initially transferred to WIP stockpiles and later
withdrawn as WIP re-handle feed for the plant. The current mine production forecast is shown
graphically in Figure 22. Examples of annual development plans are shown in Figure 23 to
Figure 25.
For 2016, the Candelaria Copper Mining Complex expects to produce 154 kilotonnes of copper, 90
kilo ounces of gold and 1.8 million ounces of silver. Over the remaining life of mine plan (to 2032),
the average annual production is estimated to be 138 kilotonnes of copper, 84 kilo ounces of gold
and 1.5 million ounces of silver.
September 4, 2015
Page 62
Table 26: Candelaria Copper Mining Complex Mine Production Schedule (100% Basis)
Mine
Open pit Ore fed to mill
Open pit Low grade to WIP
WIP** Rehandle
From Candelaria u/g
From Alcaparrosa
Total Ore to Candelaria Plant
Open pit Waste
Strip Ratio exc Stockpiles
Total Ore from Santos Mine
to PAC plant
Plant
Candelaria Plant Recoveries
Candelaria Plant Concentrate
Candelaria Contained Metal
PAC Plant Recoveries
PAC Plant Concentrate
PAC Contained Metal
Total Concentrate Production
Total Contained Metal
*
Production Plan
Tonnes (kt)
Cu (%)
Au (gpt)
Ag (gpt)
Tonnes (kt)
Cu (%)
Au (gpt)
Ag (gpt)
Tonnes (kt)
Cu (%)
Au (gpt)
Ag (gpt)
Tonnes (kt)
Cu (%)
Au (gpt)
Ag (gpt)
Tonnes (kt)
Cu (%)
Au (gpt)
Ag (gpt)
Tonnes (kt)
Cu (%)
Au (gpt)
Ag (gpt)
Tonnes (kt)
Tonnes (kt)
Cu (%)
Au (gpt)
Ag (gpt)
Production Plan
% Cu
% Au
% Ag
Tonnes (kt)
Cu (kt)
Au (koz)
Ag (moz)
% Cu
% Au
% Ag
Tonnes (kt)
Cu (kt)
Au (koz)
Ag (moz)
Tonnes (kt)
Cu (kt)
Au (koz)
Ag (moz)
2015*
10,110
0.57
0.13
2.04
3,705
0.28
0.07
1.19
905
0.54
0.13
2.02
1,104
1.21
0.28
5.83
736
0.92
0.20
3.81
12,854
0.64
0.15
2.47
26,875
1.9
690
0.97
0.22
3.81
2016
19,502
0.54
0.12
2.00
4,057
0.25
0.06
1.18
1,860
0.48
0.13
1.99
2,288
0.94
0.24
6.22
1,574
0.91
0.20
3.76
25,224
0.60
0.14
2.49
60,119
2.6
1,373
1.08
0.24
4.26
2017
14,890
0.61
0.13
1.86
655
0.26
0.08
0.91
6,574
0.38
0.09
1.57
2,373
0.90
0.24
6.27
1,570
0.95
0.17
4.23
25,406
0.60
0.13
2.34
60,877
3.9
1,369
1.11
0.26
5.41
2018
14,331
0.63
0.15
1.76
2,081
0.25
0.06
0.75
4,755
0.38
0.09
1.57
2,555
0.84
0.24
6.89
1,570
0.87
0.18
3.61
23,211
0.62
0.15
2.41
53,633
3.3
1,369
1.07
0.23
5.06
2019
14,520
0.70
0.16
2.19
2,407
0.25
0.06
0.75
6,084
0.38
0.09
1.57
2,646
0.88
0.24
5.94
1,570
0.90
0.16
4.62
24,820
0.65
0.15
2.59
58,181
3.4
1,369
1.01
0.23
4.65
2020
13,052
0.62
0.14
2.01
596
0.25
0.06
0.88
7,443
0.38
0.09
1.57
2,654
1.02
0.24
5.51
1,574
0.92
0.20
3.55
24,723
0.61
0.14
2.35
62,868
4.6
1,373
0.98
0.23
3.88
2021
13,976
0.63
0.16
1.88
3,021
0.28
0.08
1.35
8,275
0.39
0.09
1.58
2,646
1.08
0.24
3.33
446
1.41
0.30
2.75
25,343
0.61
0.15
1.95
48,801
2.9
340
0.86
0.22
3.32
92.9%
74.8%
83.8%
251
77
45
0.9
94.0%
72.0%
72.0%
21
6
4
0.1
272
83
49
0.9
92.9%
74.7%
83.8%
469
140
82
1.7
94.0%
72.0%
72.0%
47
14
8
0.1
516
154
90
1.8
93.2%
74.8%
83.5%
468
142
81
1.6
94.0%
72.0%
72.0%
48
14
8
0.2
516
156
89
1.8
90.6%
74.8%
83.7%
425
130
85
1.5
94.0%
72.0%
72.0%
47
14
7
0.2
472
144
93
1.7
91.1%
74.8%
83.5%
491
148
92
1.7
94.0%
72.0%
72.0%
44
13
7
0.1
535
161
99
1.9
88.5%
74.7%
83.7%
439
133
82
1.6
94.0%
72.0%
72.0%
43
13
7
0.1
481
145
89
1.7
92.4%
74.9%
84.7%
471
143
90
1.3
94.0%
72.0%
72.0%
9
3
2
0.0
480
146
91
1.4
2022
8,914
0.64
0.16
2.84
1,267
0.26
0.06
1.30
13,623
0.38
0.09
1.55
2,646
1.01
0.23
3.25
2023
9,692
0.68
0.16
3.35
4,240
0.27
0.07
1.31
13,000
0.34
0.08
1.42
2,646
0.91
0.21
2.96
2024
10,958
0.57
0.13
2.44
6,017
0.27
0.07
1.28
13,000
0.29
0.07
1.25
2,654
0.97
0.22
3.46
2025
14,060
0.50
0.11
2.02
334
0.24
0.05
0.61
9,998
0.29
0.07
1.25
2,646
1.02
0.22
2.75
2026
11,088
0.42
0.10
1.64
259
0.24
0.05
0.91
12,369
0.29
0.07
1.24
2,646
0.88
0.20
2.73
2027
25,170
0.67
0.15
2.42
6,107
0.27
0.07
1.20
1,002
0.29
0.07
1.24
330
0.72
0.16
2.19
2028
26,475
0.65
0.14
2.24
5,332
0.27
0.07
1.62
1,000
0.28
0.07
1.23
2029
19,990
0.60
0.13
2.36
728
0.25
0.06
1.00
6,462
0.28
0.07
1.29
2030
16,338
0.62
0.16
1.84
3,648
0.27
0.06
0.73
7,658
0.28
0.07
1.29
2031
22,468
0.78
0.17
2.07
4,594
0.27
0.06
0.63
4,141
0.28
0.07
1.20
25,183
0.54
0.13
2.18
66,352
6.5
25,339
0.53
0.13
2.32
52,163
3.7
26,611
0.47
0.11
1.96
63,382
3.7
26,704
0.47
0.11
1.80
63,500
4.4
26,104
0.41
0.10
1.56
67,273
5.9
26,502
0.66
0.15
2.37
51,651
1.7
27,475
0.64
0.14
2.20
43,449
1.4
26,452
0.52
0.12
2.10
50,176
2.4
23,996
0.51
0.13
1.67
38,467
1.9
26,608
0.70
0.15
1.93
15,152
0.6
24,749
0.29
0.07
1.13
-
90.7%
75.0%
85.0%
405
123
79
1.5
93.4%
75.0%
85.0%
412
125
78
1.6
91.9%
75.0%
85.0%
382
115
70
1.4
87.8%
75.0%
85.0%
363
110
68
1.3
92.1%
75.0%
85.0%
323
97
62
1.1
93.5%
75.0%
85.0%
550
163
95
1.7
94.5%
75.0%
85.0%
544
165
91
1.7
91.3%
75.0%
85.0%
409
125
74
1.5
91.6%
75.0%
85.0%
366
112
74
1.1
93.7%
75.0%
85.0%
583
174
99
1.4
84.9%
75.0%
85.0%
197
60
40
0.8
7,549
2,281
1,386
25
197
60
40
0.8
260
77
43
0.8
7,809
2,358
1,429
26.2
405
123
79
1.5
412
125
78
1.6
382
115
70
1.4
363
110
68
1.3
323
97
62
1.1
550
163
95
1.7
544
165
91
1.7
409
125
74
1.5
366
112
74
1.1
583
174
99
1.4
2032
24,749
0.29
0.07
1.13
Total
265,533
0.62
0.14
2.15
49,049
0.27
0.07
1.13
142,898
0.33
0.08
1.36
29,834
0.96
0.23
4.46
9,038
0.94
0.19
3.88
447,303
0.56
0.13
2.09
882,921
2.8
7,881
1.04
0.24
4.52
Second half of 2015
** Work in Progress (WIP) stockpiles
September 4, 2015
Page 63
LOM 2015 Total Ore to Candelaria and PAC Plants (kt)
30,000
25,000
KTonnes ORE
20,000
15,000
10,000
5,000
0
Santos (kt)
2015
690
2016
1,373
2017
1,369
2018
1,369
2019
1,369
2020
1,373
2021
340
Alcaparrosa (kt)
736
1,574
1,570
1,570
1,570
1,574
446
2022
2023
2024
2025
2026
2027
2,646
2,646
2,654
2,646
2,646
330
Candelaria UG
StockPiles (kt)
1,104
2,288
2,373
2,555
2,646
2,654
2,646
905
1,860
6,574
4,755
6,084
7,443
8,275 13,623 13,000 13,000 9,998 12,369 1,002
Open Pit (Kt)
10,110 19,502 14,890 14,331 14,520 13,052 13,976 8,914
2028
2029
2030
2031
2032
1,000
6,462
7,658
4,141 24,749
9,692 10,958 14,060 11,088 25,170 26,475 19,990 16,338 22,468
LOM 2015 Combined Mill Grade %Cu
0.70%
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Mill Grade %Cu
LOM 2015 Contained Copper Production (tonnes)
180,000
160,000
140,000
Cu Production (tonnes)
120,000
100,000
80,000
60,000
40,000
20,000
0
Santos
Alcaparrosa
Candelaria UG
StockPiles
Open Pit
2015
6,289
6,392
12,593
4,410
53,486
2016
13,934
13,425
20,256
8,043
98,580
2017
14,291
14,077
20,137
22,662
85,197
2018
13,814
12,897
20,191
16,425
80,842
2019
13,053
13,261
21,869
21,017
91,778
2020
12,612
13,673
25,319
25,657
68,497
2021
2,732
5,902
26,914
27,225
83,420
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
25,192 22,557 24,070 25,332 21,998 2,217
43,835 37,890 31,984 24,435 30,186 2,442 2,407 15,465 18,280 9,816 60,018
53,932 65,017 59,288 60,570 45,375 158,37 162,68 109,92 93,523 164,56
Figure 22: Candelaria Open Pit Production Schedule
Top: Total ore to Candelaria and PAC plant; Middle: Average mill feed copper grade; and Bottom:
Contained copper production
September 4, 2015
Page 64
Year
2016
N
96
112
496
512
Pushback ‐9
Pushback ‐10
Pushback ‐11
Ore Ktons
20,367
19,502
Ore Ktons
‐
Ore Ktons
‐
Ore Grade %Cu
0.624%
0.543%
Ore Grade %Cu
‐
Ore Grade %Cu
‐
Waste KTons
14,040
8,793
Waste KTons
44,990
46,079
Waste KTons
‐
Total KTons
36,102
37,599
Total KTons
44,990
46,079
Total KTons
‐
1
624
Year
2017
N
640
0
400368
Pushback ‐9
Pushback ‐9
Pushback ‐10
Pushback ‐11
Ore Ktons
19,646
14,422
Ore Ktons
0.468
‐
Ore Ktons
‐
Ore Grade %Cu
0.543%
0.608%
Ore Grade %Cu
0.592%
‐
Ore Grade %Cu
‐
Waste KTons
13,146
2760
Waste KTons
48,079
49,350
Waste KTons
8,767
‐
Total KTons
38,500
17,733
Total KTons
48,079
49,923
Total KTons
8,767
‐
2
Figure 23: Annual Development Plan for 2016 (top) and 2017 (bottom)
Note: Green = waste; Blue = WIP stockpile; Red = ore
September 4, 2015
Page 65
Year
2024
N
208
Pushback ‐11
Pushback ‐12
Pushback ‐13
Ore Ktons
5,085
Ore Ktons
5,873
Ore Ktons
‐
Ore Grade %Cu
0.54
Ore Grade %Cu
0.59
Ore Grade %Cu
‐
Waste KTons
4,759
Waste KTons
8,097
Waste KTons
Total KTons
12,351
Total KTons
17,480
Total KTons
50,022
608
1
50,022
Year
2026
N
112
Pushback ‐11
Pushback ‐12
Pushback ‐13
Ore Ktons
‐
Ore Ktons
8,566
Ore Ktons
Ore Grade %Cu
‐
Ore Grade %Cu
0.41
Ore Grade %Cu
2,522
Waste KTons
‐
Waste KTons
16,923
Waste KTons
50,327
Total KTons
‐
Total KTons
25,597
Total KTons
53,000
496
0.46
3
September 4, 2015
Page 66
Year
2029
N
-64
304
Pushback ‐11
Pushback ‐12
Pushback ‐13
Ore Ktons
‐
Ore Ktons
11,434
Ore Ktons
Ore Grade %Cu
‐
Ore Grade %Cu
0.52
Ore Grade %Cu
8,556
0.70
Waste KTons
‐
Waste KTons
5,006
Waste KTons
45,170
Total KTons
‐
Total KTons
16,894
Total KTons
54,000
3
Year
2031
N
-16
Pushback ‐11
Pushback ‐12
Pushback ‐13
Ore Ktons
‐
Ore Ktons
‐
Ore Ktons
Ore Grade %Cu
‐
Ore Grade %Cu
‐
Ore Grade %Cu
22,468
0.78
Waste KTons
‐
Waste KTons
‐
Waste KTons
15,152
Total KTons
‐
Total KTons
‐
Total KTons
42,143
1
September 4, 2015
Page 67
15.3 Underground Mine Design and Production Schedule
Each of the three underground mines and its associated facilities is accessed by a surface portal and
ramp. Figure 26, Figure 27, Figure 28, and Figure 29 show the basic layout of Candelaria Norte, the
Damiana-Susana area deposits, Santos mine, and Alcaparrosa mine, respectively.
Figure 26: Candelaria Norte Mine Layout and Sectors
Figure 27: Candelaria Norte Mine Showing the Layout of the Damiana and Susana Sectors
September 4, 2015
Page 68
Meléndez Central
Meléndez Sur
Supernova
Helena Sur
Figure 28: Santos Mine Layout and Sectors
Figure 29: Alcaparrosa Mine Layout and Sectors
The underground mines employ geology, planning, and surveying personnel. The mines operate
using detailed production, development plans, and schedules and all of the mining activities are
conducted under the guidance and oversight of the general mine manager. The operational activities
at all of the mines are performed by contractors with oversight by Candelaria and Ojos del Salado
management. The contractors employ and manage the mines’ labour personnel and they own and
maintain the mining equipment.
September 4, 2015
Page 69
The underground mines are all relatively dry owing to their location in an arid region. Geotechnical
rock mass characterization is completed from core logging, detailed mapping of geological
structures, testing of intact material properties, and measuring in situ stresses. Empirical open stope
design methodologies have been used to determine roof and wall stability and the size of pillars.
Numerical analysis simulation tools for mine sequencing analysis are also applied. External
consultants undertook global stability analysis of the planned open stoping operations for all three
underground mines in 2013 and 2014, and produced the following reports:



Análisis de Estabilidad Global Complejo Super Nova – Mina Santos, prepared by E-Mining
Technology S.A. for Minera Candelaria
Análisis de Estabilidad Global – Mina Alcaparrosa, prepared by E-Mining Technology S.A.
for Minera Candelaria
Analisis Nueva Secuencia De Explotacion Sector Mantos Elisa – Mina Candelaria Norte,
prepared by E-Mining Technology S.A. for Minera Candelaria
SRK is of the opinion that the stopes that support the proposed life of mine plan for Candelaria
Norte, Alcaparrosa, and Santos can be mined as expected.
The flowsheet for the design and scheduling of the underground Mineral Reserves in the mine plan is
shown in Figure 30.
The three underground mines utilize a sublevel open stoping mining method for ore extraction. This
method is ideal for relatively large, vertical, as well as thick deposits with favourable and stable host
rock. See Figure 31.
Figure 30: Candelaria Life of Mine Plan Development Process
September 4, 2015
Page 70
Figure 31: Typical Sublevel Open Stope
Stopes can typically be up to 100 metres high with sublevels at 25- to 50-metre intervals. The length
of the stopes is generally 80 metres with widths varying between 20 to 30 metres. Stopes are drilled
down from the sublevel drilling drifts as benches using 4.5 to 5.5 inch diameter DTH holes. The
holes are loaded and blasted in vertical slices towards an open face. The blasted ore gravitates to the
bottom of the stope and is collected through drawpoints at the production level below. This lower
level also consists of the haulage drift. The drawpoints are 7 metres high and inclined at 50 to
60 degrees to allow the blasted ore to flow. Conventionally drilled 2.5 inch upholes within the
drawpoints are loaded and blasted along with the down-holes. Once the stope is mined, a remaining
rib pillar, which can be another 20 to 30 metres wide, may be blasted into the stope providing higher
extraction. A 20-metre structural pillar remains between each stope and no backfill is used at these
operations.
Ore is mucked from the drawpoints using surface-type front-end loaders and LHDs. The mucked ore
is dumped into 30-ton, highway-type trucks and hauled up the ramp to a surface stockpile for
subsequent re-handling and processing.
Some ore may be irrecoverable at stope completion, while other ore is left in-stope as support pillars,
lowering the overall mining recovery. The mining recovery varies depending on the type of stope
and its geometry. The amount of dilution also varies depending on the stope setting. Dilution
typically contains mineralized material with low metal grades. Typical mining recovery and dilution
factors are summarized in Table 27.
Table 27: Summary of Stope Setting
Stope Type
Vertical
Inclined
Rib
Pillar
Structural pillar
Dilution
(%)
10.0
30.0
30.0
40.0
50.0
Recovery
(%)
95
85
85
80
75
September 4, 2015
Page 71
15.4 Underground Mine Plan
The current scheduled annual production for Candelaria Norte, Santos, and Alcaparrosa is
summarized in Table 28.
Table 28: Underground Mineral Reserve Schedule
Mine
Production
Plan
Candelaria
Norte
Tonnes (kt)
Santos
Alcaparrosa
Cu (%)
Au (g/t)
Ag (g/t)
Tonnes (kt)
Cu (%)
Au (g/t)
Ag (g/t)
Tonnes (kt)
Cu (%)
Au (g/t)
Ag (g/t)
2015-H2
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
1,104 2,288 2,373 2,555 2,646 2,654 2,646 2,646 2,646 2,654 2,646 2,646
1.21 0.94 0.90 0.84 0.88 1.02
0.28 0.24 0.24 0.24 0.24 0.24
5.83 6.22 6.27 6.89 5.94 5.51
690 1,373 1,369 1,369 1,369 1,373
0.97 1.08 1.11 1.07 1.01 0.98
0.22 0.24 0.26 0.23 0.23 0.23
3.81 4.26 5.41 5.06 4.65 3.88
736 1,574 1,570 1,570 1,570 1,574
0.92 0.91 0.95 0.87 0.90 0.92
0.20 0.20 0.17 0.18 0.16 0.20
3.81 3.76 4.23 3.61 4.62 3.55
1.08
0.24
3.33
340
0.86
0.22
3.32
446
1.41
0.30
2.75
1.01
0.23
3.25
0.91
0.21
2.96
0.97
0.22
3.46
1.02
0.22
2.75
0.88
0.20
2.73
2027
330
0.72
0.16
2.19
Candeleria Norte has a significant increase in its production rate beginning in 2016. Three new
sectors will be introduced into the life of mine plan: Lila, Wendy Norte, and Elisa Norte. The
increase in the life of mine itself is achieved by a later inclusion of the Susana and Damiana sectors
to the South. The schedule and ramp-up periods are summarized below:




2016 Candelaria Norte ramp ups tonnage from 6,000 to 6,500 tonnes per day
2018 Candelaria Norte ramp ups tonnage from 6,500 to 7,000 tonnes per day and then to
7,250 tonnes per day in 2019
2020 Candelaria Norte production ends and replaced with production from Susana and
Damiana sectors to maintain throughput to 7,250 tonnes per day by year end
2027 Susana and Damiana tonnage begins to ramp down
In order to meet these targets, the following development rates are planned for Candeleria Norte:




2015 to 2016 - 450 metres per month
2017 - 550 metres per month
2018 to 2019 - 600 metres per month
2020 - 600 metres per month for Damiana and Susana
The Santos mine will maintain its current production rate of 3,750 tonnes per day until the end of it
life of mine in 2021. This will be achieved by developing 150 metres per month until the second
quarter of 2017 when the development rate will increase to 250 metres per month. Beginning in
2017, two new sectors will be included, Melendez Central and Helena South.
The Alcaparrosa mine will ramp up from its current production rate of 4,000 to 4,300 tonnes per day.
This is supported by developing 430 metres per month beginning in year 2016. In 2016, two new
sectors, Viviana and Alcaparrosa South, are expected to be included in the life of mine plan.
September 4, 2015
Page 72
15.5 Waste Dumps
The capacity of each of the waste dumps is summarized in Table 29. The waste dump surface area
will be increased by approximately 347 hectares with an expanded capacity of approximately 750
million tonnes. The dumps will be constructed in 20-metre lifts and 30-metre wide access ramps.
Table 29: Waste Dump Capacity
Waste Rock Currently Additional
Dump
Approved
Project
(Mt)
(Mt)
Norte
1,660
610
Nantoco
315
140
Total
(Mt)
2,270
455
Currently
Final
Approved Projected
Projected
Elevation Elevation Surface Area
(m.a.s.l.) (m.a.s.l.)
(hectare)
832
880
730
840
940
329
15.6 Mine Equipment
15.6.1 Open Pit Mine Equipment
The open pit mine is a conventional truck and shovel operation. The unit operations are drilling,
blasting, grade control, loading, and hauling. The primary loading units are electric cable shovels.
The primary drills are rotary electric and diesel powered units. Support equipment provides
development access, road maintenance, and equipment servicing capability. The open pit mine
operates 24 hours per day, 365 days per year. Shift employees work 8-hour shifts. The overall
mining rate is currently 235,000 tonnes per day. Total primary crusher throughput is typically 70,000
tonnes per day.
The primary production blasthole drills are rotary machines capable of single pass drilling on a
16-metre bench. The current drill fleet consists of two Bucyrus BE-49R electric drills, one Atlas
Copco Pit Viper PV-271, and five PV-351 diesel units. Drill mechanical availability for the fleet
averages 83 percent and utilization averages 60 percent. Drill penetration rates are currently
20 metres per hour in Phase 8 and 27 metres per hour in Phase 9.
The rock at Candelaria is hard and fine fragmentation is required in most areas of the pit to maximize
throughput to the concentrator. As a result, drill patterns are relatively tight resulting in powder
factors ranging from 0.50 to 0.75 kilogram per tonne.
The wall control blasting includes line holes drilled for presplitting. There are two Atlas Copco Roc
L8 drills dedicated to line hole drilling. The line holes are normally drilled on 2-metre centres at the
recommended bench face angle on a double bench.
Blasting is carried out with heavy ammonium nitrate / fuel oil. Blasthole cuttings are sampled and
assayed for copper only for grade control.
The primary loading fleet currently consists of three P&H 4100 (43 cubic metres), three P&H 2800
(28 cubic metres) electric cable shovels and one P&H 2100 (13 cubic metres) electric cable shovel.
Support units include one Cat 994 (16 cubic metres) and one Cat 992 (9 cubic metres) wheel loader.
The P&H 4100 and P&H 2800 shovels mine stockpiles, ore, and waste. The P&H 2100 re-handles
ore from the Candelaria Norte underground mine to large haulage trucks for transportation to the
September 4, 2015
Page 73
primary crusher. The shovel fleet has an average availability of 84 percent and utilization of
82 percent. Candelaria implemented a rebuild program on shovels, completing major rebuilds on five
shovels between 2009 and 2011.
The Candelaria haulage fleet currently consists of 46 Cat 793 mechanical drive trucks. These trucks
use light boxes and typically carry loads of between 232 and 237 tonnes. Road conditions in the
mine are very good and tire life is 90,000 kilometres. A truck rebuild program is also in place at
Candelaria and trucks are overhauled at 100,000 hours with an extended life expectancy of
75,000 hours. The truck fleet availability is 90 percent and utilization is 87 percent. Loading times
for the trucks range from 5.0 minutes with a P&H 2100 to 1.6 minutes with a P&H 4100. The truck
fleet requirement in the life of mine plan is expected to peak at 45 units.
The mine has an extensive fleet of support equipment. The track dozer fleet includes six Cat D10 and
two Cat D11 models, which are used on dumps, stockpiles, and in the pit for bench maintenance.
There are five Cat 824 wheel dozers for road and bench maintenance. The grader fleet includes three
Cat 16M and one Cat 24M models.
The mine support equipment fleet includes five Cat 773 and one Cat 777 water trucks for watering
roads and working faces prior to loading to control dust. The excavator fleet includes two Cat 385
models that are used for wall scaling and ditching as required.
A dispatch system is used in the mine. High precision GPS locators are used on the shovels and the
drills. Lower precision systems are used on the trucks and the auxiliary equipment.
15.6.2 Underground Mine Equipment
All three underground mines utilizes conventional surface and underground equipment designed for
a hard-rock operational mine. LHDs units and front-end loaders are used for mucking ore from the
drawpoints and development headings. Currently, these units are not fitted with any remote control
capability. Therefore, any muck past the brow would remain in the stope as unrecovered loss.
Blasted ore is mucked into 30-ton, highway-type trucks. For production ore, typically three to four
trucks are assigned to one loader depending on the haul distance. For drilling, down-the-hole (DTH)
drills with a 4.5 inch diameter holes are used in the sublevels. Twin-boom jumbos drill off the
development headings and also drill holes for bolting. Man lifts are used for services and installation
of bolts.
The overall mining rate is currently 6,000 tonnes per day for Candelaria Norte (ramping up to
7,250 tonnes per day by 2020), 3,800 tonnes per day for Santos and 4,000 tonnes per day for
Alcaparrosa (ramping up to 4,300 tonnes per day in 2016).
The mining equipment currently used at Candeleria Norte, Alcaparrosa and Santos mines is
summarized in Table 30. All underground mining equipment is owned and operated by contractors
and it is expected that the number of units they employ will increase modestly as the production rate
increases.
September 4, 2015
Page 74
Table 30: Underground Mining Equipment
Equipment
Candeleria Norte
LHDS
Front-end Loaders
Jumbos
DTH Drills
Trucks (30 tonnes)
Trucks (20 tonnes)
Trucks (50 tonnes)
Simba Drills
Man Lifts
6
3
5
4
15
0
0
1
7
Alcaparrosa
and Santos
4
9
4
5
10
19
14
2
4
September 4, 2015
Page 75
16 Recovery Methods
The Candelaria Copper Mining Complex operates its own processing plants. The Candelaria
processing plant receives ore from the Candelaria open pit and Candelaria Norte and Alcaparrosa
underground mines. It has a nominal capacity of 75,000 tonnes per day. The Pedro Aguirre Cerda
(PAC) processing plant receives ore from the Santos underground mine and has a design capacity of
3,800 tonnes per day.
The Candelaria and PAC processing plants have been operating for several years. Other than
discussed herein, both processing plants operate with adequate energy, water, and process materials.
Over the projected life of mine plan, a new tailings storage facility will be required.
16.1 Minera Candelaria Plant
Minera Candelaria is a mature operation that started producing in 1995. Its processing plant has a
nominal capacity of 75,000 tonnes per day of fresh feed and produces a copper concentrate with gold
and silver metal as credits. Additionally, Minera Candelaria has an agreement with a third party
company to process Candelaria’s flotation tails to recover a magnetite concentrate as an additional
by-product credit.
The historical processing performance of Minera Candelaria from 2000 to 2014 has averaged
25 million tonnes per year, equivalent to approximately 68,600 tonnes per day with a utilization of
93 percent, see Figure 32. Production for 2015 is sustained and the production plan continues at this
capacity until 2032 with the last year being predominately stockpiled material.
Minera Candelaria - Historical Processing Capacity
80
Crushed, Milled ore
(Million dry tonnes /year)
28
75
26
24
70
22
20
65
18
60
16
14
12
Crushed ore tonnes/year
Milled ore tonnes/year
55
Milled ore, (kilo-tonnes/day)
30
Milled ore tonnes/day
10
50
Operating year
Figure 32: Historical Performance – Candelaria Processing Capacity
September 4, 2015
Page 76
Over the same period, between 2000 and June 2015, metallurgical recovery averaged 94 percent for
copper, 75 percent for gold, and 85 percent for silver (Figure 33).
Typical Candelaria copper concentrate averages 30 percent copper, 5 grams of gold per tonne
(g/t gold), and 90 g/t silver with a moisture content of 8 percent after filtration.
Minera Candelaria - Historical Processing Performance
1.00
100
90
0.90
Mill recovery
85
80
0.80
75
70
65
60
55
50
45
Mill recovery %Cu
0.70
Mill recovery %Au
Mill recovery %Ag
0.60
Mill feed grade, %Cu
95
Mill feed grade %Cu
40
0.50
Operating year
Figure 33: Historical Performance – Candelaria Metallurgical Performance
16.1.1 Processing Flowsheet
Minera Candelaria operates a conventional process plant flowsheet that incorporates crushing, two
parallel process lines for grinding and flotation, reclaimed process water from the tailings storage
facility comprised of conventionally thickened and rockfill embankment dams, final concentrate
filtration, and shipping of bulk copper concentrates.
Run of mine ore is trucked to a primary gyratory crusher. The crushed product is conveyed using an
overland conveyor belt system to a coarse ore stockpile with a combined live and dead capacity of
500,000 tonnes. Grinding takes place in a multi-stage closed circuit using semi-autogenous grinding
(SAG) mill, ball mill, and pebble crushing.
A multi-stage flotation circuit using an arrangement of mechanical cells, regrind mill, and column
cells produces copper concentrate. Final copper flotation concentrate with gold and silver by-product
metals is thickened, filtered, and stored on site before being trucked to Candelaria’s shipping port
located in Punta Padrones, near Caldera. Final flotation tails are conventionally thickened and
disposed of in a rockfill embankment tailings storage facility. Process water is reclaimed from the
tailings reclaim pond and seepage collection system for reuse in the processing plant.
Figure 34 shows the complete Candelaria process flowsheet while Table 31 lists details of the major
equipment. Recent changes not shown in the flowsheet include redeployment of the regrind ball mill
(14 by 22 feet) for use in processing crushed pebbles. It has been replaced with a new, 1,250
horsepower vertical regrind mill for Phase 1 concentrate regrinding duty.
September 4, 2015
Page 77
WATER SUPPLY AND RECOVERY OF
Intermediate Ore Stockpile
Capacity ~500,000 ton.
Buster Pump (4)
DRESSER
21
Primary Crusher
60x89 in. Gyratory
P H
P H
Pond
DR
ES
H AU LPAK
6 85 E
SE
R
DRES
SER
21
Feeders (3)
21
Feeders (3)
Alcaparrosa
Wells (5)
Dispatch Tower
Bin
PHASE I
PHASE II
Cyclone
Classifiers
(2 sets of 10)
Cyclone
Classifiers
(2 sets of 10)
SAG Mill (1)
36x15 ft.
Rougher flotation cells
(14) 3.000 ft 3
Ball Mills (2)
20x30 ft.
SAG Mill (1)
36x15 ft.
Pebbles Crushers
(3) 700 HP
Classification
Screen (2)
(stand by 1)
Cyclone
Classifiers
(1 sets of 14)
Classification
Screen (2)
(stand by 1)
Metals
Detector
Column
Cells (4)
Fresh Water
Storage Tank
Magnets
Scavenger Flotation Cells
(8) 3.000 ft3
Magnetite
Reject
To Osmosis
Plant
To Plant
Regrind
Mills (1)
14x22 ft.
Cyclone
Classifiers
(1 sets of 14)
Metals
Detector
Fire Line
Magnets
Magnetite
Reject
Rougher flotation cells
(10) 4,500 ft
Ball Mills (2)
20x30 ft.
Column
Cells (4)
Vertimill
(1)
800 hp
Scavenger Flotation Cells3
(6) 4,500 ft
To Plant
Process Water
Storage Tank
Concentrate Thickener
(3) 100 ft.
Tailing Thickener (2)
400 ft.
Evaporation
Tailing
Dam
Ceramic Disc
Concentrate Filters
(8)
O´ Flow
Pumps
Cut off Wall
Reclaim Water
Pumps
Cut off Wall Shaft
Concentrate Storage Building
5,000 tons.
MECHANIZED CLEAN PORT FACILITIES
Concentrate Storage Building
45,000 tons.
To Punta Padrones Port
Dual Linear
Ships Loader
Truck Scale
Figure 34: Minera Candelaria Flowsheet
SRK Team / ah – jfc – sg
September 4, 2015
Page 78
Table 31: Major Processing Equipment and Systems at Minera Candelaria
Area
Crushing
Mill
Mill processing line 1
Unit process
Primary crusher
Coarse ore stockpile
Grinding
Flotation
Mill processing line 2
Grinding
Flotation
Final tails
Final concentrate
Port
Water supply
Water supply
Tailings thickener
Concentrate thickener
Filtration
Storage
Storage
Fresh water wells
Ocean water
Equipment
Gyratory 60 in x 89 in
500,000 tonnes total
SAG mill 36 ft x 15 ft
3 x pebble crusher
2 x ball mill 20 ft x 30 ft
2 x 10 x hydrocyclone
1 x regrind mill 14 ft x 22 ft (for pebbles)
14 x rougher cells 3000 ft3
1 x vertical regrind mill 1250 HP
4 x column cell
3 x flotation cells 3000 ft3
SAG mill 36 ft x 15 ft
3 x pebble crusher
2 x ball mill 20 ft x 30 ft
2 x 10 x hydrocyclone
10 x rougher cells 4500 ft3
1 x vertical regrind mill 800 HP
4 x column cell
6 x flotation cells 4500 ft3
2 x 400 ft diameter
3 x 100 ft diameter
8 x ceramic filters
5,000 tonnes total
45,000 tonnes total
5 x wells at Alcaparrosa
Desalination plant at Punta Padrones
16.1.2 Reagents
Minera Candelaria applies a suite of surface modifiers in flotation to maximize recovery of copper
and by-product credit metals and for the dewatering of its flotation product. See Table 32 for the list
of reagents and range of consumption levels (in grams per tonne).
Table 32: List of Processing Plant Reagents and Consumptions
Reagent
Commercial Name
Primary collector
Secondary collector
Frother
Lime
Flocculant concentrate
Flocculant tailings
AP3894
Hostaflot-Lib K
Nalflote 9837
Lime
Optimer 9876
SNF 228
Manufacturer
Cytec
Sansil-Clariant
Nalco
Inacal
Nalco
SNF
Consumption (g/t)
minimum maximum
6
12
3
8
3
10
400
545
2
5
5
10
16.1.3 Magnetite Recovery
Since 2008, tailings from the Minera Candelaria processing plant have been treated under an
agreement with Compañía Minera del Pacifico S.A. (Minera del Pacifico) to produce a magnetite
concentrate. The Minera del Pacifico magnetite extraction plant is located to the west of the plant
site area and to the south of the tailings storage facility (see Figure 4). The magnetite concentrate
September 4, 2015
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from the plant is transferred via pipeline to Minera del Pacifico’s port near Caldera and the
remaining non-magnetic material is deposited in the Candelaria tailings storage facility.
The magnetite concentrate produces an additional source of by-product revenue to Minera
Candelaria reported in 2014 as US$32 million. The mine production plan shows 0.9 to 3.4 million
tonnes of magnetite being produced annually until 2032 from tailings with a magnetic content of 5 to
14 percent iron. The revenue from the magnetite production is linked to global iron ore prices and
therefore, similar levels of revenue may not be achieved in the future.
16.2 Ojos del Salado PAC Plant
The PAC concentrator of Minera Ojos del Salado has been in operation since 1929. The concentrator
processes 3,800 tonnes per day of fresh feed from the Santos underground mine with an historical
average head grade of 0.85 percent copper and a copper recovery of 94 percent. The copper
concentrate produced has averaged 30 percent copper, 5 g/t gold, and 67 g/t silver since 2004. Gold
and silver recoveries are slightly lower than Candelaria at 72 percent each.
The current mine plan shows the PAC plant will continue to operate at this capacity until 2021, when
it will halt production.
The concentrator flowsheet comprises a close-circuit crushing plant (Figure 35) including a primary
jaw crusher (48 x 60 inch), a secondary cone crusher (Symons 7-foot standard) and two tertiary cone
crushers (Symons 7-foot short head).
Figure 35: Ojos del Salado Flowsheet – Crushing Plant
September 4, 2015
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The grinding plant (Figure 36) has three ball mills (one 9 x 9 feet and two 10.5 x 13 feet) operating
in parallel and in closed-circuit with hydro-cyclone classifiers.
Figure 36: Ojos del Salado Flowsheet – Grinding Plant
The flotation plant (Figure 37) uses conventional multi-stage, mechanical, self-aspirated, and forcedair flotation cells (1,500, 300, and 100 cubic feet), regrind milling and column cells for the final
concentrate cleaning stage. Final concentrate is thickened and filtered with a 30 cubic metre ceramic
disc filter. Final flotation tailings from the PAC plant are pumped to the main Candelaria tailings
storage facility but are not processed through the magnetite recovery plant.
Figure 37: Ojos del Salado Flowsheet – Flotation Plant
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16.3 Candelaria Tailings Storage Facility
The Candelaria tailings storage facility, located to the northwest of the open pit (Figure 4), currently
receives flotation tails from the Candelaria and Ojos del Salado processing plants. The Candelaria
flotation tails are thickened and pumped to the tailings storage facility at an average solids
concentration of 50 percent. The Ojos del Salado flotation tails are pumped unthickened at an
average solids concentration of 35 percent. The remaining storage capacity is estimated at 36 million
cubic metres. This is sufficient to receive tailings until the end of 2017 at the current production
throughput, when the tailings level will reach 795 metres above sea level with the embankment at
800 metres above sea level.
The Candelaria tailings storage facility currently has three embankment dams, Main dam, North
dam, and South dam, built with mine waste material with a final designed height of 800 metres
above sea level. Construction of the final dam configuration is currently underway and is expected to
be completed in 2015. A small containment dike (Decidida) is built from borrow material on the
western edge of the facility. The dams have a filter system comprised of varying combinations of
granular material, geotextile and/or HDPE liner on the upstream slope. The downstream slope of the
dams is 1.6(H):1.0(V) and the upstream slope is 1.8(H):1.0(V), except for the Decidida dam where
both slopes are 1.8(H):1.0(V). To facilitate construction, the upstream slope uses benches and
slightly steeper interbench slopes resulting in a net slope of 1.8:1(H):1.0(V). All of the dams are
constructed with the downstream method.
The currently proposed closure plan for the Candelaria tailings storage facility includes a cover of
granular material with channels to direct surface run-off towards a spillway located at the south west
end of the South dam.
16.4 Los Diques Tailings Facility (Proposed)
A new tailings storage facility, known as Los Diques, to the southwest of the open pit and plant sites
(see Figure 4), has been designed to replace the Candelaria tailings storage facility. The Los Diques
facility will have an approximate designed capacity of 600 million tonnes, to a final crest elevation
of 873 metres above sea level, which is more than that required by the current projected mine life.
The Los Diques tailings storage facility is a key part of the “Candelaria 2030 - Operational
Continuity Project” environmental impact assessment that was submitted to the environmental
authorities in September 2013 and approved on July 23, 2015. Refer to Section 19 for further details
about the Candelaria 2030 approval process.
The proposed Los Diques tailings storage facility requires relocating four power lines and one
segment of the C-397 public road. A new water pipeline, parallel to the current one, is included in
the permit application, but is not included in the project plan or required for Los Diques operations.
The new tailings facility is designed with three embankments, all of them built from mine waste
material, with transition and filter zones built from engineered fill borrowed from inside the
containment area. The main embankment will have underdrains to facilitate water recovery. The
design includes a geomembrane on the upstream slope and a grout curtain for the north and south
embankments only. In addition, a cut-off wall and drain wall are proposed, along with extraction
wells to collect seepage water for recirculation to the processing plant. The currently proposed Los
Diques closure plan includes a cover and a spillway on the north embankment that will direct surface
run-off to a drainage canal located on the west boundary of the embankment. Water which is
collected in the drainage canal will be routed to the pit.
September 4, 2015
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Ongoing engineering and construction are underway to maintain adequate tailings storage capacity at
the Candelaria facility. To mitigate the risk that permitting and construction of Los Diques is not
completed before reaching the capacity of the existing tailings facility, Minera Candelaria is
implementing a plan to reduce the permitted freeboard of the existing facility, thereby gaining
approximately 14 months of additional storage capacity. Permit modifications have been submitted
to reduce freeboard between tailings and dam crest from 5.0 metres to 1.5 metres, which complies
with Chilean law. Additionally, engineering was completed on a possible dam crest raise from 800 to
804 metres above sea level. However, due to schedule issues associated with construction and
permitting, this project was put on hold. Finally, alternatives are being developed to further
maximize the available capacity in the existing tailings facility, including but not limited to cell
deposition techniques.
September 4, 2015
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17 Project Infrastructure
This section provides a summary of the major infrastructure of the Candelaria Copper Mining
Complex. This section is compiled from information collected during the site visit when all major
infrastructure was visited by SRK. The major infrastructure is shown in Figure 4.
17.1 Candelaria Copper Mining Complex
The Minera Candelaria infrastructure includes:









The Candelaria open pit mine with a capacity of approximately 270,000 tonnes of rock per
day
Surface waste dumps located to the north and southwest of the Candelaria open pit
The Candelaria processing plant with a capacity of 75,000 tonnes per day
The Candelaria Norte underground mine with a current ore capacity of 6,000 tonnes per day
(which will be ramped up to 7,250 tonnes per day later in its mine life) and access from a
portal located within the Candelaria open pit
The Candelaria tailings facility located northwest of the Candelaria open pit
Ancillary mine services and administrative buildings and road accesses
The off-site Punta Padrones port located at Caldera with a 45,000 wet metric tonne designed
storage capacity and 1,000 wet metric tonnes per hour loading capacity
A desalination plant adjacent to the port facility commissioned in January 2013 with a
capacity of 500 litres per second and related aqueduct to connect to the Bodega pump station
(80 kilometres)
A pipeline from the Bodega pump station to the Candelaria plant site (40 kilometres)
The Minera Ojos del Salado infrastructure includes:




The Alcaparrosa underground mine with an ore capacity of 4,000 tonnes per day and access
by a portal
The Santos underground mine with an ore capacity of 3,800 tonnes per day (which will be
ramped up to 4,000 tonnes per day later in its mine life) and access by a separate portal
The PAC processing plant with a capacity of 3,800 tonnes per day
Ancillary surface service buildings and road accesses
17.2 Power Supply
Power supply for the Candelaria Copper Mining Complex, as well as the port and desalination
facilities, is supplied under a contract with GENER (AES Gener S.A.) since July 2012. The contract
is in place for 10 years. The contract has a number of maximum and minimum power supply limits
with a maximum capacity of approximately 135 megawatts and under all foreseen future operating
circumstances these are likely to be met. Typical combined maximum demands for the mines, port,
and desalination plant are approximately 110 megawatts.
Minera Candelaria and Minera Ojos del Salado are listed in GENER’s list of customers for the year
2013 as consuming 749 and 61 gigawatt hours, respectively.
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The combined consumption of both companies totals 810 gigawatt hours per year representing the
third largest contract in terms of consumption for the utility company. Reported power costs in 2014
were US$0.105 per kilowatt hour.
17.3 Punta Padrones Port Facilities
Minera Candelaria infrastructure includes the Punta Padrones port facilities located at Caldera on the
Pacific Ocean seaboard (Figure 1 and Figure 3). It has been in operation since 1995. The facility
comprises a covered concentrate warehouse with a capacity of 45,000 wet metric tonnes and a
telescopic ship loader that has a capacity of 1,000 wet metric tonnes per hour. The facility is
equipped with dust collection systems and all concentrate truck discharge and warehouse loader
activities take place inside covered buildings. The telescopic ship loader is PLC controlled and
conveyor discharge to the ship hold is via an “elephant’s trunk.”
The port is able to accommodate ships of up to 58,000 metric tonnes with drafts of up to 12.4 metres.
Typically, three vessels are loaded per month. The total capacity of the port is approximately
3.5 million wet metric tonnes per annum. The maximum annual concentrate production over the
remaining life of mine is approximately 600,000 wet metric tonnes per annum. Overall utilization of
the port is therefore low and the excess capacity is potentially available for cost savings and sharing
with other concentrate exporters.
17.4 Fresh Water Supply
Historically, the Candelaria Copper Mining Complex sourced fresh water from deep wells in the
nearby Copiapó aquifer (see Table 33) for which the mines held and continue to hold water rights.
During the 2000s, water levels in many of these wells dropped significantly and some went dry.
Following an extensive examination of alternative water supplies, including more distant ground
water wells, Minera Candelaria opted to construct a desalination plant at the Punta Padrones port site
and pump the water 110 kilometres to the mine site via a dedicated pipeline and booster pump
station (Figure 38). The desalination plant was originally designed at 300 litres per second and was
later expanded to 500 litres per second.
The desalination plant itself consists of three, nominal 150 litres per second lines comprising prefiltration, ultra-filtration, micro-filtration ahead of conventional reverse osmosis. The reverse
osmosis plant includes 468 pressure vessels with 3,276 membranes operating at a pressure exceeding
1,000 pounds per square inch. The desalination plant was commissioned in early 2013 and has since
reached nameplate capacity. In November 2013, extraction from groundwater sources in the Copiapó
aquifer was stopped with the exception of water for potable supply and emergencies.
In addition to the desalination plant, the mines also source water from Agua Chanar, a private
company that treats the sewage from Copiapó and Tierra Amarilla. The Agua Chanar water is
supplied under a 10-year contract to mid-2020 to Minera Candelaria and Minera del Pacifico, who
operates the magnetite recovery from the tailings plant. The agreement established with Aguas
Chañar requires that it supplies a minimum of 175 litres per second with 70 percent of the water
supplied to Minera Candelaria and 30 percent to Minera del Pacifico.
The environmental approval of the Candelaria 2030 project requires the gradual reduction in the
utilization of treated water from Aguas Chañar (175 litres per second), and increased utilization of
water from the desalination plant. The reduction must be in the following stages: a 25 percent
reduction through Year 3 of operations; a 50 percent reduction from Year 4 to 6; a 75 percent
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reduction from Year 7 to 9; and a 100 percent from year 10 to the end of the mine life. The excess
treated water, must be discharged into the Copiapó River.
Table 33: Candelaria Fresh Water Supply Wells
Area
Alcaparrosa
Alcaparrosa
Alcaparrosa
Paipote
Paipote
Paipote
Paipote
Palermo
Palermo
Toledo - Piedra Colgada
San Pedro
San Pedro
San Pedro
San Pedro
San Pedro
Nantoco
Source
Well 8
Well 12
Well 14
Well 10
Well 11
Well 15
Well 16
Well 9
Well 13
Well 1
Well
Well PC 28
Well 29
Well 8
Well 31
Well 1
Well 2
Well 3
Well
Well 1
Well 1
Well 2
Well 2
Well 1
Well
Community Well
Community Well
Community Well
Well 6
Well 6
Well 6
Location
Alcaparrosa
Alcaparrosa
Alcaparrosa
Paipote
Paipote
Punta Negra, Paipote
Callejón Toro Lorca
Palermo
Palermo
Piedra Colgada
Parcela 26 B, Toledo
Parcela 28, Piedra Colgada
Parcela 15, Lote A, PC 27
Parcela 34, Chamonate
Lote 224, of PC 32, Piedra Colgada
PC 5, Campo Lindo
PC 5, Campo Lindo
PC 5, Campo Lindo
Parcela 24, Chamonate
San Pedro
San Pedro
San Pedro
San Pedro
San Pedro
Parcela 8, Nantoco
Piedra Colgada, Econssa
L/s
100
110
110
100
130
115
105
85
70
5,6
3,42
6,66
30
4,17
5
25
25
23
17
9,996
10,003
18
10
50
7,8
6,68
6,664
6,664
25
25
23
Year
1991
1991
1991
1991
1991
1991
1991
1994
1994
2005
2005
2000
2007
1998
2007
2008
2008
2008
2010
1997
1998
2008
2008
2008
1996
2014
2014
2014
2008
2008
2008
Source: Candelaria Copper Mining Complex
Desal Plant
(300 l/s)
24” Lined Pipeline
with 500 i/s capacity
(~80 km)
Bodega
24” Lined Pipeline
with 500 i/s capacity
(~35 km)
110 kv & 23 kv
Power lines
(~110 km)
Candelaria
Figure 38: Desalination Plant Location and Pipeline to Candelaria Site
September 4, 2015
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18 Market Studies and Contracts
The Candelaria Copper Mining Complex has been selling copper sulphide concentrates to customers
worldwide according to established contracts. Market studies are therefore not relevant to the
purpose of this technical report. This section summarizes the key contracts regarding the Candelaria
Copper Mining Complex.
The quality of the copper concentrates produced by the Candelaria Copper Mining Complex is
excellent. The concentrates are clean and have very low content of critical elements such as lead
(Pb), arsenic (As), antimony (Sb), bismuth (Bi), and mercury (Hg). The range of the zinc (Zn)
content in the Candelaria copper concentrates is very wide (0.1 percent to 3.75 percent) and may
result in modest penalties from some copper smelters.
Both copper concentrates have significant by-product credits of gold and silver. Technically, the
copper concentrates have no limitations and can be treated at all copper smelters worldwide.
The Candelaria concentrate is primarily sold under four long-term contracts. Two of these expire at
the end of 2016, a third in 2017 while the fourth, for 30,000 – 50,000 tonnes per year, runs until
2018. All contracts are based on standard copper smelter annual contract treatment terms. The
concentrate is shipped from the Punta Padrones port facility to destinations in Europe, China, Japan,
Korea, India, and Brazil. As necessary, and to adjust for production variability, a small portion of
concentrate production is sold into the spot market at then-current market terms for destinations
similar to the above.
The Ojos de Salado copper concentrate is currently sold under two long-term contracts: one for
domestic delivery in Chile and one for delivery to Japan. The contracts run to 2017 and 2018,
respectively, and both are based on standard annual contract terms.
The sales contracts for both products are a mix of “block” and “brick” contracts. Under a “block”
contract, 100 percent of the terms are based on the current year’s annual terms, while under a “brick”
contract, the terms for each year are being based on 50 percent at the prior year’s annual terms and
50 percent at the current year’s annual terms.
Minera Candelaria and Minera Ojos del Salados have entered into two Contracts of Affreightments
(COA) with two different shipping companies. These COAs are valid through 2016 with an option in
one of the COAs for one additional year, 2017. The existing COAs cover all present sales
destinations.
In addition to copper concentrate sales, Minera Candelaria has an agreement with Minera del
Pacifico to process Candelaria’s flotation tailings to produce a magnetite concentrate and this
produces an additional source of by-product revenue.
September 4, 2015
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19 Environmental Studies, Permitting, and Social or
Community Impact
This section documents a review of the environmental and social aspects of the Candelaria and Ojos
del Salado operations. The information in this section was compiled from information collected
during a site visit carried out on July 7, 2015, or made available by the Candelaria Copper Mining
Complex.
19.1 Environmental Studies and Background Information
Minera Candelaria officially began operations on March 9, 1995. The original project was submitted
to a voluntary environmental assessment process, and was approved by resolution ORD. N ° 817 of
June 9, 1992.
Since 1992, Minera Candelaria has been through a series of environmental assessment processes
submitted through Environmental Impact Studies (Estudios de Impacto Ambiental; EIA) and
Environmental Impact Declarations (Declaraciones de Impacto Ambiental; DIA). Most recently, in
September 2013 an EIA entitled “Candelaria 2030 - Project Operational Continuity” (Candelaria
2030) was submitted to Chilean regulatory authorities. The EIA was approved with conditions on
July 23, 2015 by the Environmental Evaluation Service (Servicio de Evaluación Ambiental; SEA).
At Minera Ojos del Salado, the Alcaparrosa mine obtained its initial environmental approval in 1996,
and there have been subsequent amendments. The current permit for the Alcaparrosa mine expires at
the end of 2015. A query regarding the specific requirements related to acquiring a permit to extend
the mine life was submitted to the regulatory authorities in May 2015 and their assessment is
ongoing. The Santos mine and the PAC plant began operating before 1994, prior to the development
of Chile’s modern environmental evaluation system.
19.2 Permitting and Compliance
19.2.1 Environmental Approvals
Minera Candelaria
Since receiving its original environmental permit in 1992, several modifications have been made.
The majority of the facilities required for the Candelaria 2030 project were approved on July 23,
2015.
The main active environmental approvals are presented in Table 34.
Other minor changes have been granted by the authorities under a Pertinencia. A Pertinencia is a
document submitted to the environmental authorities about whether certain activities do or do not
need to be submitted to the Environmental Impact Assessment System (Sistema de Evaluación de
Impacto Ambiental; SEIA). In the Pertinencias submitted by the Candelaria Copper Mining
Complex, the authorities accepted that the changes do not need to be submitted to the SEIA. The
changes and their legal reference are presented in Table 35.
September 4, 2015
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Table 34: Minera Candelaria Environmental Approvals (RCAs*)
Project
EIA Candelaria project Phase I
EIA Port facilities Punta Padrones
EIA Candelaria project Phase II
DIA Reception and storage of tailings from Compañía Minera Ojos del
Salado
DIA Auxiliary fuel tank Candelaria mine
DIA Mixing plan of diesel and used oil
DIA Copper concentrate transport to new destinations
DIA Exploration ramp Candelaria Norte
DIA Candelaria Norte underground project
DIA Modification of the feeding system of tailing dam
DIA Reception and processing mineral from Alcaparrosa mine
DIA Exploration ramp Candelaria Sur
DIA Candelaria Norte underground mine expansion
DIA Optimization pebbles circuit
DIA Water pipeline Chamonate - Candelaria
EIA Candelaria desalination plant
DIA Growth of height La Candelaria tailing dam wall
EIA Candelaria 2030 - Project operational continuity
*
Legal Reference*
N° 817/1992
N° 001/1994
N°1/1997
N° 044/1977
N° 006/1998
N°104/1998
N° 26/2000
N° 084/2001
N° 094/2003
N° 116/2005
N° 012/2005
N° 04/2005
N° 175/2007
N° 106/2007
N° 273/2008
N° 129/2011
N° 74/2012
N° 133/2015
Environmental Approval Resolution (RCA)
Table 35: Changes of Candelaria Approved Under Pertinencia
Project /Activity
Legal Reference
Modification of concentrate route
Modification of the path of the power line
between the mine and the desalinization plant
Extension of life of mine
Expansion Candelaria Norte underground mine
Letter N° 1088/2011, SEA Atacama
In September 2013, an EIA in support of the Candelaria 2030 project was submitted to the SEIA and
was approved on July 23, 2015, through the RCA N° 133/2015. The review process took
676 calendar days and required four Consolidated Reports of Request for Clarifications, Corrections
and Additions (ICSARA) , and four Addendas responses by Minera Candelaria.
The project was approved with a number of conditions related to additional monitoring activities,
and mitigation or compensation measures, mainly for air, water, and biological resources. None of
the requested additional measures put at risk the technical or economic feasibility of the operation.
One of the most relevant conditions imposed is the gradual reduction of the use of treated water from
the Copiapó wastewater treatment plant (175 litres per second), and increase of the utilization of
water from the desalination plant. The reduction must be in three stages: a 25% reduction through
Year 3 from the start of the Los Diques operation; a 50% reduction from Year 4 to 6; a 75%
reduction from Year 7 to 9; and discontinued use of treated wastewater from Year 10 to the end of
the mine life. The excess treated water must be discharged into the Copiapó River. The reduction in
the use of treated wastewater will be compensated by the planned increased use of the installed
capacity of the desalination plant.
September 4, 2015
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Ojos del Salado Operation
The Minera Ojos del Salado operations include the Santos underground mine, Alcaparrosa
underground mine, PAC processing plant, and a tailings pipeline.
The PAC processing plant and Santos mine operate according to the former Chilean environmental
regulations. They do not have an environmental permit and these facilities have not been changed
sufficiently to require a new environmental permit under the current environmental regulations.
The Alcaparrosa mine received its original environmental approval in 1996 with subsequent
amendments in 1999 and 2005. A Pertinencia submitted in 2012 to the environmental authorities to
extend the life of the mine to 2015 was approved. A new Pertinencia was submitted in May 5, 2015,
for the extension of the life of mine until 2017. On May 20, 2015 the authorities requested additional
information mainly related to the project’s air emissions, extraction rates, and modifications to waste
dump N°1.
In the event that the authorities do not approve the mine life extension to 2017 via the Pertinencia,
the project will need to be submitted to the SEIA for environmental assessment. The permitting
documentation (either a DIA or an EIA) can be assembled rapidly but it would not be feasible to
obtain environmental approval by the end of 2015. If at that time, a new permit is not in place or the
extension to the existing permit approved, the Alcaparrosa mine may be faced with temporary
closure, in which case stockpiled ore from Candelaria will be used to make up the plant feed
difference until a new environmental permit is granted.
Ore from the Alcaparrosa mine is shipped to the Candelaria processing plant as approved by
resolution granted to Minera Candelaria (RCA No. 012/2005).
The PAC processing plant receives ore from the Santos mine, and the tailings are deposited in the
Candelaria tailings storage facility. This situation is approved by a resolution granted to Minera
Candelaria (RCA No. 048/1997), and the lifetime was extended to 2017 through a Pertinencia
granted by Letter N°001/2013. A new environmental approval will be required prior to the end of
2017 to permit the continued delivery of PAC mill tailings to Candelaria through 2030.
Minera Ojos del Salado, which has been active since 1929, includes a number of old tailings
management facilities and smelter slag piles from the old Edwards smelter. These closed facilities
were capped or removed and extensively rehabilitated by Minera Ojos del Salado during the 2000s.
The environmental permits obtained directly by Minera Ojos del Salado for its facilities are
September 4, 2015
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Table 36: Summary of Minera Ojos del Salado Approvals (RCAs*)
Project /Facility
Description
EIA Alcaparrosa mine
DIA Tailings transport to Candelaria
2,500 tonnes per day process in Aguirre Cerda plant
Transport of tailing N° 8 to Candelaria
Process in Aguirre Cerda plant
725,000 tonnes per year between 1998 – 2006
EIA Modification to Alcaparrosa mine
913,000 – 1,450,000 tonnes per year between 2007 – 2008
570,000 tonnes per year in 2010
DIA Cerro Negro mine exploration
12 boreholes
Transport of 4,000 tonnes per day to Candelaria plant (new
DIA Modification II Alcaparrosa project
road)
DIA Tortolitas mine exploration
10 boreholes
DIA Slag removal/tunnel remediation Environmental management and closure of two abandoned
of Edwards smelter
facilities (slag deposit and tunnel) from old Edwards smelter
DIA Environmental improvement of six Environmental remediation of six old abandoned tailings
tailings dams
dams
DIA Mineral transportation between
Transportation of approximatively 1,400 tonnes per day of ore
Santos mine and Alcaparrosa mine
from Santos to Alcaparrosa
*
Approval
Reference*
N° 2/1996
N° 048/1997
N° 6/1999
N° 002/ 2000
N° 003/2005
N°089/2005
N° 118/2005
N° 228/ 2007
N°204/2008
Environmental Approval Resolution (RCA)
Minera Ojos del Salado obtained other approvals for changes through a Pertinencia. The changes are
presented in Table 37.
Table 37: Minera Ojos del Salado Changes Approved Under Pertinencia
Project/Activity
Tailing transport to Candelaria
Alcaparrosa mine life extension
Description
Extension until 2017 to the tailing N° 8 transport to
Candelaria tailing dam
Extension of mine life for three years, to end of 2015
Legal Reference
Letter N° 552/2012
Letter N°001/2013
19.2.2 Sectorial Permits
In addition to the environmental permits, other mining associated activities require permits that are
not covered by environmental regulations, or that include some technical aspects requiring other
permits. These additional permits can be required both for construction and operational phases and
must be obtained from various public agencies (potentially more than 10 agencies).
Currently, Minera Candelaria has all applicable permits in place and, through its environmental
management system, keeps a detailed record of the status of each permit and its compliance status.
Since 1992, approximately 850 specific permits have been obtained.
The proposed Candelaria 2030 project has set in place a program for the preparation and processing
of several other sectorial permits. This process has identified about 158 permits that are required.
One of the critical permits is the permit from the General Directorate of Water (DGA) for the tailings
dam, which is considered a major hydraulic structure. Typically, a new application can take between
one and two years to process. Minera Candelaria submitted the application for this permit in
November 2014, and it is still under review. Under a conservative scenario, an approval can be
expected prior to the end of 2016. Meanwhile, construction activities are scheduled to start with
works not related to the tailing dam (roads, pre-construction facilities, and studies and activities
dealing with environmental commitments).
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Another relevant DGA permit deals with the modification of the current Candelaria tailings storage
facility. The application was submitted on July 29, 2015.
Others relevant permits are the mining permits, related to the mine exploitation, waste disposal, and
the tailings dam. The application for tailings dam permits to the Servicio Nacional de Geología y
Minería (SERNAGEOMIN) was submitted in November 2014, and the application for the
exploitation method and waste disposal is expected to be submitted by September 2015.
The updated closure plan for the current operation (with a life of mine through 2017) was submitted
in November 2014 and was approved in July 2015. A new closure plan needs to be prepared and
submitted for the Candelaria 2030 project. This plan is currently in development and approval is
required before the start of the project.
Minera Ojos del Salado operates with all other applicable permits in place and through its
environmental management system keeps a detailed record of each permit and its compliance status.
Throughout its life, Minera Ojos del Salado has had to arrange for about 150 specific permits. Any
project modifications (such as extending the life of the underground mines) will require obtaining or
updating a number of specific sectorial permits.
19.2.3 Compliance Management
Minera Candelaria has received 25 Environmental Approval Resolutions, which set a number of
conditions that need to be met. Internal and external audits are monitoring the compliance with
respect to all commitments. In addition, the Superintendent of Environment (Supertintendencia de
Medio Ambiente; SMA), created in 2011, oversees environmental compliance and has the authority
to assign orders or fines if non-compliance issues are identified.
In May 2015, Minera Candelaria received from the Superintendent of Environment the Extent
Resolution N° 1/ROL D-018-2015, which identified 16 charges against the company for alleged noncompliance with certain conditions set forth in the Environmental Approval Resolutions issued to
Minera Candelaria. Eight of the charges were classified as serious and eight as minor.
In June 2015, Minera Candelaria submitted to the Superintendent of Environment a Compliance
Program, which includes specific actions for some of the charges and challenges certain aspects of
others. The charges and their severity, as well as Minera Candelaria’s comments and proposed
actions, are summarized in Table 38. The SMA rejected the Compliance Program on August 17,
2015. In response, on September 1, 2015 Minera Candelaria submitted a “descargos”, a legal
document responding to the charges and presenting evidence that Minera Candelaria is not in
violation of its environmental approvals nor of the law with respect to the original 16 charges..
Subject to the outcome of the review of the descargos, the SMA may apply fines, such as the
following:



Minor infringements: a written warning or fines up to 1,000 annual tax units (UTA), which
amounts to approximately US$800,000
Serious infringements: fines up to 5,000 UTA (approximately US$4 million), provisional or
definitive closure of facilities, and RCA revocation
Extremely serious infringements: fines up to 10,000 UTA (approximately US$8 million),
provisional or definitive closure of facilities, and RCA revocation
September 4, 2015
Page 92
In spite of the “serious” classification assigned by the SMA to eight of the charges, it is SRK’s
opinion that none of the non-compliances have caused serious environmental impacts, and most of
them can be managed through the activities required as part of the Candelaria 2030 project. Minera
Candelaria is addressing these non-compliances with the authorities and it is possible that fines, if
any, will be significantly below the maximum allowable fine limits. SRK believes that the fines, if
any, will not be material to the company.
Table 38: Charges to Minera Candelaria from the Superintendent of Environment
N°
1
2
3
4
5
Minera Candelaria
Comments*
This was a specific situation during the
Disposal of liquid effluent in a
start-up phase of the plant, which
non-authorized beach from the Serious coincided with the inspection by the
desalinization plant.
SMA. This situation has already been
resolved.
The flow meter was not in the specified
Installation of a flow meter for
point (before TK-30 tank) because that
the water impulsion between
point does not comply with the objective
the Bodega area and the mine
Minor of measuring the flow at the output of
area in a place different from
Aguas Chañar and the input to
the authorized.
Candelaria so potential leaks can be
detected.
There are two flow meters in the tailing
Unauthorized deposition of
pipeline from Ojos del Salado, one at
tailings from Minera Ojos del
the output of the pumping station and
Salado, considering that the
one before the discharge to the
Minor
operation does not have a
Candelaria tailing facility. The flow rate
mechanism to quantify the
is 4,000 tonnes per day, as authorized.
tailings deposited in the facility.
The system is controlled in the Ojos del
Salado control room.
Insufficient use of irrigation
There are dust control measures.
measures to prevent dust
However, currently there is no
emissions in the discharge
Serious comprehensive wetting plan, but one
area of the waste dumps and
has been included in the 2030
on public roads used for
Candelaria project.
concentrate transportation.
During the fragmentation, the stage
In the blasting activities, there
before blasting, water is added. So,
are dry explosions and not wet Serious
water is added at the stage where it is
as committed.
technically possible to do so.
Charge
Severity
6
Non application of bischofite on
At the date of the SMA inspection, the
the tailings freeboard and on
Serious raising to elevation 800 m was not
roads.
completed.
7
Has not performed
conservation activities on the
C-397 route, as committed.
8
Disposal of waste tires in a
non-authorized place (in the
waste dumps).
Minera Candelaria
Action Plan
 Inform SMA of the
canalization and venting
works developed.
 Cleaning any waste left in the
beach.
Install a flow meter at the inlet to
tank TK-30.
Candelaria will implement a
register system in the Candelaria
Copper Mining Complex. The
system will be controlled also in
the Candelaria control room.
To implement a wetting plan
(included in the Candelaria 2030
project).
Use water in fragmentation and
report and record water used.
 Send tailing construction
program to SMA.
 Put bischofite in the tailing
construction phase.
 Put bischofite in the tailing
freeboard, according to the
construction program.
Candelaria does maintenance activities
Develop a maintenance plan of
on Route C-397 and Route 5 in the 12Route C-397 during the
Serious
kilometre access to the complex. An
Candelaria mine life.
updated plan will be delivered.
 Generate a record of the
waste tires disposed of
already.
The Candelaria 2030 project included a
Minor specific plan for the disposal of the
 Do not dispose more waste
waste tires.
tires in the places authorized
by SERNAGEOMIN until the
health sectorial approval.
September 4, 2015
N°
9
10
11
12
13
14
15
16
*
Minera Candelaria
Comments*
The beacon remained for several years.
Has not installed a beacon at
However, because of the crossing
the junction of Route C-397
Minor
improvements made by the road
with Route 5.
authority, the beacon was not justified.
Does not measure sulfates and
The parameters were identified in
aluminum in the monitoring of
Serious relevant documents approved by the
settleable dust, as committed.
various agencies.
Does not have the permit to
The capture and rescue of reptiles was
capture protected species
Minor not carried out, which was reported to
(reptiles).
the competent authorities.
The last slope of the North
waste dump does not comply
There is no commitment in the RCA
with the minimum distance
N°1/1997 or in other documents
Minor
from the cemetery wall, as
specifying a distance between the
committed in RCA N°1/1997
North waste dump and the cemetery.
(60 metres).
The route for the pipeline
The different layout runs inside the
Chamonante - Candelaria is
industrial area, as described in the
different than the one
Serious
documentation contained in the
authorized under RCA N°
Candelaria 2030 project submission.
273/2008.
Has not reduced the
consumption of fresh water
Candelaria has reduced water
considering the increasing
consumption from wells. Current
recirculation of water from the
Minor
extraction from wells is for the supply of
tailings dam and the insertion
the local population (115 l/s).
of desalinated water to the
system.
The path of the power line is the one
modified through the Addenda N°1 of
Constructed the power line in a
the evaluation process related to RCA
different path from the
Serious N° 129/11. The path was modified as
authorized one.
requested by the authority in order to
not affect the Bahia Inglesa
Paleontological Formation.
The current waste dump area is
covered under the mining approval, but
Project facilities in the pit and
it is outside the boundaries of the
Nantoco waste dump areas
Minor approved environmental area. The pit
use an area bigger than the
area is bigger that the environmental
one authorized.
approval, but will be authorized under
the Candelaria 2030 project.
Charge
Page 93
Minera Candelaria
Action Plan
Severity
The beacon will be installed and
will operate at the night.
Include sulfates and aluminum in
the monthly monitoring.
A technical report justifying the
situation will be delivered.
A topographic survey will be
developed that will show the
distance. If the distance is less
that the legal requirements, the
waste dump would be modified.
Obtain approval of the
Candelaria 2030 project.
Deliver a technical report
containing the historical
reductions of fresh water
consumption for Candelaria.
Deliver a technical report with
the real power line layout and
the approved layout.
 Report current conditions of
Nantoco waste dump.
 The pit area will be in
regulation with the approval of
the Candelaria 2030 project.
Comments related to the explanation provided by Minera Candelaria in the Compliment Program submitted to the Superintendent of
Environment. (“Programa de Cumplimiento Minera Candelaria”, June 2015)
September 4, 2015
Page 94
19.3 Environment Management
The Candelaria Copper Mining Complex is located near the town of Tierra Amarilla and near an
agriculture area of the Copiapó valley. In this region mining activities coexist with residential and
agricultural uses. The Copiapó River Basin has significant shortages of groundwater resources and
aquifer levels have decreased due to water extraction for agricultural, industrial, and domestic uses.
The Copiapó valley is characterized by a normal desert climate in its medium section and coastal
desert in its lower section. The Tierra Amarilla area has an average annual temperature of 17 degrees
Celsius, an average relative humidity of 60 percent, and an annual rainfall of 17 millimetres. In the
coastal area, Caldera has an average annual temperature of 15 degrees Celsius, an average relative
humidity of 82 percent, and an annual rainfall of 6 millimetres.
The mining operations are located in the lower portion of the El Bronce and El Buitre sub-basins.
Both sub-basins are oriented east-west, and drain towards the Copiapó River.
19.3.1 Key Environmental Issues
The key environmental management issues facing the Candelaria Copper Mining Complex are
related to the specific sensitivities of the region.
Water supply
Taking in consideration the sensitivities of water resources in the Copiapo basin, the Candelaria
Copper Mining Complex has a water resource optimization plan for its operations. Since 2013, the
operations have eliminated use of groundwater for process water. The main source of water is now
desalinated seawater and water from the Aguas Chañar wastewater treatment plant. Water from
groundwater wells remains available in case of emergency and maintenance and for the supply of
potable water.
As stated previously, one of the commitments of the Candelaria 2030 project (RCA N° 133/2015) is
the gradual phase out of the use of water from the wastewater treatment plant, in approximately ten
years when the operations will depend only on water from the desalinization plant.
Water quality
Water quality management and control of potential leaks from the mining facilities is an important
issue in the environmental management of the operations.
The current Candelaria tailings storage facility and the proposed new Los Diques tailings storage
facility have been designed to minimize water losses and maximize water reuse in the processing
plant.
For the proposed Los Diques tailings facility, hydrogeological studies indicate that seepage flows
will be low and will flow towards the current open pit mine, which will act as a sink. Preferential
infiltration flows occur toward the pit, at depths greater than 500 metres below the surface, deeper
than the depth of the Copiapó aquifer in the area, which is located at a depth between 40 and
120 metres.
The project is located in a dry arid region. Geochemical studies completed to date indicate a low risk
for acid rock drainage. Despite this, during the review of the proposed Candelaria 2030 project, the
authorities raised concerns about the potential seepage from the tailings and a potential impact on the
September 4, 2015
Page 95
Copiapó River Basin. In this regards, one of the commitments from the Candelaria 2030 approval
(RCA N° 133/2015) is that if water is present in any of the wells of the Los Bronces drainage (P1
and PP2 monitoring wells), Minera Candelaria must proceed immediately with the hydrogeological
isolation of the Los Bronces sub-basin from the Copiapó area aquifer system, by a mechanism that
will require an agreement from the environmental authorities.
Air quality
The Candelaria Copper Mining Complex operates close to populated areas where agriculture is a
significant land use along with a number of other mining operations. Air quality is a relevant
environmental issue. In their comments on the Candelaria 2030 project, the authorities pointed out
that the area is technically saturated for breathable particulate matter (PM 10 and PM 2.5), although
there is no official statement on this. In this context, the Candelaria Copper Mining Complex utilizes
a series of measures to control dust emissions, including a road wetting plan, nebulizers on
stockpiles, crusher dust collectors, and internal monitoring of emission control. Dust emissions have
also been a major topic of discussion in the Candelaria 2030 environmental approval process. The
approval of the Candelaria 2030 project added a number of additional measures.
Monitoring Program
Since 1993 a monitoring program has been in place to identify any changes or modifications with
respect to the environmental baseline data. The results are periodically sent to the responsible
government authorities. The monitoring program includes groundwater quality and levels, dust,
noise and vibration, and marine parameters, among others. A summary of the current monitoring
program is provided in Table 39.
19.3.2 Environmental Management System
The environmental management system of the Candelaria Copper Mining Complex is certified under
ISO 14001 and the health and safety management system under OSHAS 18001 standards.
Since the acquisition by Lundin, the operations have been integrated into Lundin’s sustainability
practices, the targets and commitments of which address occupational health and safety,
environmental performance, sustainability policy and management systems, water management,
energy and greenhouse gas management, mineral waste management, mine closure, biodiversity
management, and stakeholder engagement.
The approval of the Candelaria 2030 project (RCA N°133/2015) has added additional monitoring
conditions.
September 4, 2015
Page 96
Table 39: Environmental Monitoring Program
Item
Air Quality /
Meteorology
Noise and
Vibrations
Water
Marine Area
Desalination
Plant
Parameter
Frequency
PM 10, and PM 2, 5
(particular matter less than 10 microns)
Every three days
Settleable dust (TDS) and Fe, Cu; As and
SiO2 composition
Monthly
Wind velocity and direction
Continuous
Evaporation from tailing dam (l/s)
Continuous
NPS
Annual
Vertical acceleration
Annual
Phreatic levels
Monthly
Underground water quality
Biannual and annual,
depending on parameter
Recirculated water quality
Drinking water quality
Fresh water consumption, water from
sewage plant, desalinated water, and
recirculated water (m3)
Oceanographic parameters in sea water
column
Metals and granulometry in sediments
Seawater communities
Plankton communities
Fish fauna
Water quality in brine discharge
Marine Area
Metals, temperature, salinity, dissolve
Punta Padrones oxygen in sea water column;
Port
metals and granulometry in sediments
Seawater communities
Piedra Colgada Physical, biological, hydro biological
Wetland
characteristics
Biannual and annual
Monthly
Area
Tierra Amarilla
Caldera
Nantoco
Candelaria mine
Punta Padrones
Nantoco
Candelaria mine
Caldera
Punta Padrones
Mine
Tierra Amarilla
Caldera
Tierra Amarilla
Mine area/El Bronce
drainage
Tierra Amarilla
Paipote
Aquifer 4 area
Mine area/El Bronce
drainage
Tierra Amarilla
Paipote
Aquifer 4 area
Mine
Port
Monthly
Mine
Biannual
Punta Padrones
Depending on production
of desalinated water
Biannual
Punta Padrones
Biannual
Copiapó River mouth
September 4, 2015
Page 97
19.4 Closure
Closure of mine sites and installations in Chile has been recently regulated by Law 20.551/2011 and
Supreme Decree N°41/2012. Law No. 20.551 regulates the closure of mining works. It establishes
that mining projects must submit for approval to SERNAGEOMIN a mining closure plan prepared in
accordance with the corresponding RCA.
The objective of the closure plan should be to mitigate the effects caused by the mining activities,
according to the environmental regulations. The closure plan has to be approved by
SERNAGEOMIN before starting the exploration, exploitation by mining activities or the operation
of processing facilities. Additionally, mining projects with an extraction capacity of over
10,000 tonnes per month must provide a financial guarantee, the amount of which will be determined
based on the periodic re-evaluation of the closure plan implementation and management costs.
The mine closure plan is part of the mine life cycle and, thus, should be implemented gradually
during the various stages of the mining operation so that at the end of the mine life, the closure
measures have been fully implemented in a way that complies with the law. The implementation of
the regulation is different for new and existing operations.
For new mining operations, closure plans should be submitted at the start of the project and must be
updated continuously (at least once every five years) until the end of operations.
For existing operations, the regulation provides transition measures to re-evaluate mine closure plans
prepared under the previous Mine Safety Act. The complete re-evaluation had to be submitted to
SERNAGEOMIN by November 11, 2014, and the guarantee must be in place six months and one
day from the approval of the closure plan.
In relation to the Chilean mine closure legislation, the status of the Minera Candelaria closure plan
is:





The re-evaluation of the closure plan was submitted in November 2014 and approved by
SERNAGEOMIN through Resolution No. 1883 issued in July 2015.
Estimated closure costs are US$ 42.4 million including direct costs (US$ 24.0 million),
indirect cost (US$9.2 million), contingencies (US$8.0 million), and post-closure costs
(US$1.2 million).
The closure of the processing plant represents 57 percent of the direct costs.
Minera Candelaria has one year from July 2015 to provide at least 20 percent of the present
value of the closure costs.
The approved closure plan does not include the project’s modification under the Candelaria
2030 project. An updated closure plan must be submitted. The approval of the closure plan is
required for the start of the new project. This plan is currently in development, and includes
the old San Esteban tailing facility.
The status for the Minera Ojos del Salado closure plan is:



The updated closure plan, including closure cost estimates, was approved by
SERNAGEOMIN on May 16, 2014 through Resolution No 394 issued in May 2014.
Estimated closure costs are US$7.9 million including direct costs (US$3.9 million), indirect
cost (US$ 1.4 million), contingencies (US$2.0 million), and post-closure costs
(US$0.6 million).
The closure of the PAC processing plant represents 52 percent of the direct costs.
September 4, 2015



Page 98
Minera Ojos del Salado should have provisioned 20 percent of the financial guarantee.
Any extension to the Alcaparrosa mine’s life will require the update of the closure plan.
The legacy abandoned facilities (old tailings and slag deposit) have already been closed and
remediated.
19.5 Social and Communities
The Candelaria Copper Mining Complex is located a short distance from the village of Tierra
Amarilla. The proximity of Tierra Amarilla to the mine’s major facilities (open pit mine, waste
dumps, plant, tailings, roads, etc.) results in potential impacts from noise, dust, visual intrusion,
blasting, and vehicular traffic. Also, the town of Caldera is close to the port and desalination plant
and the potential impacts are primarily associated with the transport of concentrate.
Other smaller towns, among which there are indigenous communities (Collas), are related to the
project by the linear paths (for power lines, water pipelines) and concentrate transportation.
Within the last two years, the local community of Tierra Amarilla has made claims against the
Candelaria Copper Mining Complex expressing a number of social investment and legacy
environmental concerns in the town, which has been surrounded by extensive mining activity by
multiple different companies for many decades. Minera Candelaria and Minera Ojos del Salado are
committed to a long term, multi-staged social investment program, the details of which are being
finalized with the community of Tierra Amarilla. This program is part of a larger plan focussed on
the communities in Atacama Region III affected by the Candelaria operations, including Nantoco,
Tierra Amarilla, Paipote, Copiapo, Chamonate and Caldera. The town of Tierra Amarilla is
designated as “the Primary Impacted Community”. Initially, use of community investment funds will
include the March 2015 flood disaster relief initiative, which included housing and infrastructure
reconstruction support and land donations. In the medium and longer term, it is anticipated that
programs will be funded by the mining operations and managed by a multi-party board that will
consider projects for environmental reclamation, small business support, municipal infrastructure
and equipment and community services (includes health care, education, and vocational training)
Since Lundin acquired the Candelaria Copper Mining Complex in November 2014, Minera
Candelaria and Minera Ojos del Salado have implemented a series of improvements to the social and
community investments. The most relevant investments are the following:





Continued support of the Productive Development Fund for Artisanal Fisheries in Caldera,
which aims to respond to the priority needs of the fishermen organizations through the
implementation of a sustainable project with a local identity that will improve their quality
of life in the long term. The fund offers to these organizations, for a period of three years,
funding through projects related to the development of production, housing, healthcare, and
education.
Repair and improvements of the technical secondary school and workshop in Tierra
Amarilla, from which more than 300 students and their teachers will benefit.
Continuation and further development of the Candelaria Community Office in Tierra
Amarilla to provide a forum for interaction with members of the community. The space also
offers the community an information centre, along with ten computers with free internet
access, document printing facilities, and technological skills training workshops.
Implementation of a grievance mechanism.
Implementation of a formal stakeholder engagement process.
September 4, 2015
Page 99
20 Capital and Operating Costs
20.1 Operating Costs
The forecast operating costs for the next four years at Minera Candelaria and Minera Ojos del Salado
are shown in Table 40.
Total Candelaria unit costs are expected to remain reasonably static over the next four years. Unit
costs have fallen from recent levels as a result of cheaper diesel, energy and consumables prices,
efficiency initiatives particularly in the open pit mine, lower overhead costs, and the weaker Chilean
peso against the US dollar (1 US Dollar equals US$625 Chilean Pesos). At the Ojos del Salado
operations, unit operating costs are forecast to drop for the same reasons, while the extended mine
lives now continue to 2021.
Table 40: Actual and Forecast Unit Operating Costs
Candelaria
Mining cost - OP
Mining cost - UG
Processing cost
G&A cost
Total Unit Cost
Ojos del Salado
Mining cost
Processing cost
G&A cost
Total Unit Cost
Unit
US$/t mined
US$/t mined
US$/t milled
US$/t milled
US$/t milled
2015
2.30
22.10
7.10
2.20
19.10
2016
2.50
21.10
7.70
1.90
20.90
2017
2.80
21.40
7.50
1.70
20.60
2018
3.10
20.80
8.70
1.90
23.20
2019
2.70
20.20
8.10
1.70
21.60
Average
2016-2019
2.80
20.90
8.00
1.80
21.50
US$/t mined
US$/t milled
US$/t milled
US$/t milled
19.7
10.0
3.1
33.1
20.8
10.1
2.3
32.2
20.5
10.1
2.1
32.6
20.5
10.2
2.0
32.8
20.7
10.3
2.1
33.1
20.6
10.2
2.1
32.7
The following sections present a breakdown of the mining, processing, and general and
administrative operating costs.
20.1.1 Mining Operating Costs
Table 41 presents a breakdown of the forecast Candelaria open pit mining costs.
The average open pit mining cost over the next four years, including capitalized waste stripping is
forecast to be US$2.80 per tonne of material moved, with annual fluctuations as result of changing
haul depths and lengths associated with the various mining phases as well as changes in the quantity
of material mined. Costs have reduced recently with lower fuel and consumables prices and the
effect of the weaker Chilean peso. The biggest elements of the open pit mining cost comprise
supplies (explosives, drill tools, tires, maintenance supplies, etc.) with approximately 40 percent and
energy (diesel fuel and electricity) at 25 percent. The total costs presented in Table 41 include the
costs for both ore production and waste stripping with the latest phasing of the open pit resulting in
less waste stripping in the next four years than previous mine plans.
September 4, 2015
Page 100
Table 41: Forecast of Candelaria Open Pit Mining Costs
Candelaria
Mining Cost - Open Pit
Unit Cost
Labour
Contractors
Supplies
Energy
Other
Total Unit Cost
Total Cost
Labour
Contractors
Supplies
Energy
Other
Total Cost
Capitalized Waste Stripping
Total Cost Excluding
Capitalized Waste
Total Unit Cost Excluding
Waste Stripping
Unit
2015
2016
2017
2018
Average
2019 2016-2019
US$/t mined
US$/t mined
US$/t mined
US$/t mined
US$/t mined
US$/t mined
0.50
0.40
0.90
0.50
2.30
0.50
0.40
0.90
0.70
2.50
0.60
0.40
1.10
0.70
2.80
0.60
0.50
1.20
0.80
3.10
0.50
0.40
1.10
0.70
2.70
0.60
0.40
1.10
0.70
2.80
US$M
US$M
US$M
US$M
US$M
US$M
US$M
41.1
35.1
79.6
41.6
1.2
198.7
97.4
42.0
33.8
79.1
57.3
1.3
213.4
108.0
43.6
29.6
86.9
56.4
1.3
217.8
134.0
43.9
32.4
83.8
57.3
1.2
218.7
74.0
40.9
31.7
79.2
53.6
1.2
206.5
120.0
42.6
31.9
82.2
56.1
1.3
214.1
109.0
US$M
101.3
105.4
83.8
144.7
86.5
105.1
1.20
1.30
1.10
2.10
1.20
1.40
US$/t mined
Table 41 also shows the effect on the open pit operating cost with the removal of waste stripping
costs that are capitalised. Lundin capitalizes waste stripping costs when experienced strip ratios are
above the average planned strip ratio for each open pit phase under development. Between 2016 and
2019, the removal of capitalised waste stripping costs reduces the average unit cost of material
mined to US$1.40/t.
The forecast operating costs of the Candelaria underground mine operations, Candelaria Norte, are
presented in Table 42. The average forecast underground mining cost over the next four years at
Candelaria Norte is US$20.90 per tonne. The Candelaria Norte underground mine is operated by a
contractor on a unit rate contract and costs therefore remain fairly constant on a year by year basis
with the significantly increased mine life.
Table 42: Forecast of Operating Cost for Candelaria Underground Operations
Candelaria
Mining Cost - UG
Unit Cost
Labour
Contractors
Supplies
Energy
Other
Total Unit Cost
Total Cost
Labour
Contractors
Supplies
Energy
Other
Total Cost
Unit
2015
2016
2017
2018
Average
2019 2016-2019
US$/t
US$/t
US$/t
US$/t
US$/t
US$/t
1.40
19.70
0.40
0.40
0.10
22.10
1.00
19.30
0.50
0.30
0.10
21.10
1.00
19.50
0.50
0.30
0.10
21.40
1.00
18.90
0.40
0.30
0.10
20.80
0.90
18.50
0.40
0.30
0.10
20.20
1.00
19.10
0.40
0.30
0.10
20.90
US$M
US$M
US$M
US$M
US$M
US$M
2.9
41.0
0.9
0.9
0.3
45.9
2.2
44.1
1.0
0.8
0.3
48.4
2.4
46.4
1.1
0.8
0.3
50.9
2.5
48.4
1.1
0.8
0.2
53.0
2.5
48.9
1.1
0.8
0.3
53.6
2.4
46.9
1.1
0.8
0.3
51.5
September 4, 2015
Page 101
The forecast costs of the Ojos del Salado underground mine operations, Santos and Alcaparrosa, are
shown in Table 43.
The forecast average Ojos del Salado unit underground mining cost over the next four years is
approximately US$20.60 per tonne. Both the Santos and Alcaparrosa mines are operated by a
common contractor on unit rate contracts, and these contract costs make up over 80 percent of the
total mining costs. The mine lives for both of these mines has now been extended by exploration
success to 2021.
Table 43: Forecast of Operating Cost for Ojos del Salado Underground Operations
Ojos del Salado
Mining Cost
Unit Cost
Labour
Contractors
Supplies
Energy
Other
Total Unit Cost
Total Cost
Labour
Contractors
Supplies
Energy
Other
Total Cost
Unit
2015
2016
2017
2018
2019
Average
2016-2019
US$/t
US$/t
US$/t
US$/t
US$/t
US$/t
1.60
16.60
0.30
0.90
0.30
19.70
1.80
17.10
0.30
0.90
0.60
20.80
1.80
17.00
0.30
0.90
0.50
20.50
1.90
16.90
0.30
0.90
0.50
20.50
1.90
17.10
0.30
0.90
0.50
20.70
1.90
17.00
0.30
0.90
0.50
20.60
US$M
US$M
US$M
US$M
US$M
US$M
4.6
46.4
1.0
2.4
0.8
55.2
5.4
50.5
0.9
2.7
1.6
61.2
5.4
49.9
0.8
2.6
1.5
60.2
5.6
49.7
0.8
2.7
1.5
60.4
5.6
50.3
0.8
2.7
1.5
61.0
5.5
50.1
0.8
2.7
1.6
60.7
20.1.2 Processing Operating Costs
A breakdown of the forecast Candelaria processing costs, which includes primary crushing and
conveying, the conventional flotation plant, and water supply, are shown in Table 44.
Table 44: Forecast of Candelaria Processing Cost
Candelaria
Processing Cost
Unit Cost
Labour
Contractors
Supplies
Energy
Other
Total Unit Cost
Total Cost
Labour
Contractors
Supplies
Energy
Other
Total Cost
*
Unit
2015
2016
2017
2018
Average
2019 2016-2019
US$/t
US$/t
US$/t
US$/t
US$/t
US$/t
0.90
1.00
2.40
3.10
-0.40
7.10
1.10
1.10
2.90
3.20
-0.50
7.70
1.10
1.00
2.80
3.10
-0.50
7.50
1.20
1.10
3.20
3.60
-0.50
8.70
1.10
1.00
3.10
3.40
-0.50
8.10
1.10
1.00
3.00
3.30
-0.50
8.00
US$M
US$M
US$M
US$M
US$M
US$M
23.7
25.4
61.1
77.8
-9.7
178.3
25.5
25.3
67.5
75.9
-11.2
183.1
26.2
23.6
66.8
74.1
-11.1
179.7
26.6
24.8
69.9
78.4
-11.2
188.5
26.3
22.3
71.9
79.8
-11.0
189.3
26.2
24.0
69.0
77.1
-11.1
185.1
The negative values under Other refer to the forecast cost of treating ore from the Alcaparrosa underground mine
which is undertaken to the Candelaria plant, while the costs are allocated to Ojos del Salado.
September 4, 2015
Page 102
The forecast average unit processing cost in Candelaria over the next four years is US$8.00 per
tonne, with the varying unit costs year on year largely influenced by changes in throughput (as a
result of ore hardness) and the treatment of stockpiled material. The biggest elements of the
processing costs comprise electrical energy at approximately 42 percent and operating supplies
(grinding media, reagents, maintenance spares etc.) at circa 37 percent. The cost of both energy and
key consumables has fallen recently and this coupled with the weaker Chilean peso has resulted in
significantly lower processing costs over the next four years.
The forecast processing costs for the next four years for Ojos del Salado are presented in Table 45.
The average processing cost for Ojos del Salado over the next four years is US$10.20 per tonne. This
is a combination of the costs for treating the Santos ore at the PAC plant and the Alcaparrosa ore at
the Candelaria plant. The PAC plant is smaller than the main Candelaria plant and has higher
operating costs that average approximately US$15.00 per tonne. Energy and supplies again make up
the largest cost element, although given the significantly smaller scale of the plant, labour and
contractor costs are proportionately larger. Overall, costs at this plant have fallen for the same reason
as the main Candelaria plant.
Table 45: Forecast of Ojos del Salado Processing Cost
Ojos del Salado
Processing Cost
Unit Cost
Labour
Contractors
Supplies
Energy
Other
Total Unit Cost
Total Cost
Labour
Contractors
Supplies
Energy
Other
Total Cost
Unit
2015
2016
2017
2018
2019
Average
2016-2019
US$/t
US$/t
US$/t
US$/t
US$/t
US$/t
0.90
1.50
1.60
2.50
3.50
10.00
0.90
2.40
1.50
1.50
4.00
10.10
0.90
2.30
1.50
1.50
3.90
10.10
0.90
2.40
1.50
1.50
3.90
10.20
0.90
2.50
1.50
1.50
3.90
10.30
0.90
2.40
1.50
1.50
3.90
10.20
US$M
US$M
US$M
US$M
US$M
US$M
2.3
4.2
4.3
7.0
9.6
27.4
2.5
6.9
4.3
4.4
11.7
29.7
2.6
6.9
4.3
4.3
11.5
29.5
2.6
7.1
4.4
4.5
11.5
30.1
2.6
7.2
4.4
4.5
11.5
30.2
2.6
7.0
4.3
4.4
11.6
29.9
September 4, 2015
Page 103
20.1.3 General and Administrative Costs
A breakdown of the forecast general and administration (G&A) costs for Candelaria is shown in
Table 46.
Table 46: Forecast of Candelaria General and Administration Cost
Candelaria
G&A Cost
Unit Cost
Labour
Contractors
Supplies
Energy
Other
Total Unit Cost
Total Cost
Labour
Contractors
Supplies
Energy
Other
Total Cost
Unit
2015
2016
2017
2018
Average
2019 2016-2019
US$/t
US$/t
US$/t
US$/t
US$/t
US$/t
1.10
0.90
0.10
0.00
0.20
2.20
0.90
0.90
0.10
0.00
0.10
1.90
0.90
0.70
0.00
0.00
0.10
1.70
1.00
0.70
0.10
0.00
0.10
1.90
1.00
0.70
0.00
0.00
0.10
1.70
0.90
0.80
0.10
0.00
0.10
1.80
US$M
US$M
US$M
US$M
US$M
US$M
26.4
23.1
1.4
0.3
5.1
56.0
20.7
22.0
1.5
0.3
1.5
46.1
22.1
16.6
1.2
0.2
1.7
41.7
22.2
15.6
1.1
0.2
1.7
40.9
22.2
15.4
1.1
0.3
1.7
40.6
21.8
17.4
1.2
0.3
1.6
42.3
The forecast average unit G&A cost in Candelaria over the next four years is US$1.80 per tonne.
G&A costs have fallen from previous costs estimates as a result of cost saving and efficiency
initiatives, lower and simplified overheads and the weaker Chilean peso. G&A costs are mainly fixed
and therefore the cost per tonne variations reflect changes in throughput. Total costs over the period
range between US$40 and US$56 million.
The forecast G&A costs at the Ojos del Salado mines are summarized in Table 47.
Table 47: Forecast of Ojos del Salado General and Administration Cost
Ojos del Salado
G&A Cost
Unit Cost
Labour
Contractors
Supplies
Energy
Other
Total Unit Cost
Total Cost
Labour
Contractors
Supplies
Energy
Other
Total Cost
Unit
2015
2016
2017
2018
Average
2019 2016-2019
US$/t
US$/t
US$/t
US$/t
US$/t
US$/t
0.90
1.60
0.50
3.10
0.70
0.90
0.60
2.30
0.80
0.70
0.70
2.10
0.70
0.60
0.70
2.00
0.80
0.60
0.70
2.10
0.70
0.70
0.70
2.10
US$M
US$M
US$M
US$M
US$M
US$M
2.4
4.5
1.4
8.4
2.10
2.70
1.9
6.6
2.2
1.9
1.9
6.1
2.2
1.8
1.9
6.0
2.2
1.9
2.0
6.0
2.2
2.1
1.9
6.2
The forecast average unit G&A cost at Ojos del Salado over the next four is US$2.10 per tonne.
September 4, 2015
Page 104
20.1.4 C1 Cash Costs
The forecast 2016 C1 cash operating cost for the combined Candelaria Copper Mining Complex is
US$1.58 per pound of copper net of by-product credits and the effect of the Franco-Nevada gold and
silver streaming agreement and the forecast C1 cash cost for the following three years are shown
below in Table 48.
Coincident with Lundin’s acquisition of the Candelaria Copper Mining Complex, the company
entered into a definitive agreement with Franco-Nevada (Barbados) Corporation, a subsidiary of
Franco-Nevada to sell to Franco-Nevada a gold and silver stream from Candelaria in exchange for an
upfront deposit of US$648 million payable at closing. Under the agreement, Franco-Nevada acquired
68 percent of the gold and silver production from Candelaria until 720 kilo ounces of gold and
12 million ounces of silver have been delivered. Thereafter, Franco-Nevada will be entitled to
receive 40 percent of the gold and silver production from Candelaria. In addition to the upfront
deposit, for each ounce of gold and silver delivered, Franco-Nevada will make ongoing payments
equal to the lesser of (1) the prevailing market prices and (2) US$400 per ounce gold and US$4.00
per ounce silver. The ongoing payments for gold and silver will be subject to a 1 percent inflationary
adjustment, beginning three years after the closing of the acquisition. It should be noted that the
agreement with Franco-Nevada is with a separate wholly-owned subsidiary of Lundin and it is not an
encumbrance or obligation on either Minera Candelaria or Minera Ojos del Salado. The effect of the
agreement is reflected in the C1 cash costs below to allow an assessment of the economic impact to
Lundin.
Life of mine C1 cash costs are forecast to be US$1.54 per pound of copper net of by-product credits
and the Franco-Nevada gold and silver streaming agreement. Fluctuations in the cash cost are largely
driven by the changes in the copper head grade in the open pit, and hence copper metal production,
over the life of mine.
Table 48: C1 Copper Cash Costs*
Minera Candelaria
Minera Ojos del Salado
Candelaria Copper Mining Complex
*
Unit
2016
2017
2018
US$/lb Cu
US$/lb Cu
US$/lb Cu
1.54
1.76
1.58
1.53
1.75
1.57
1.82
1.81
1.82
LoM
Average
1.68
1.53
1.85
1.74
1.71
1.54
2019
Net of By-Projects and Effect of the Franco-Nevada Stream Agreement. The C1 cash cost represents the cash cost
incurred at each processing stage, from mining through to recoverable metal delivered to market, less net by-product
credits
September 4, 2015
Page 105
20.2 Capital Costs
The forecast Candelaria capital investment plan for the 10-year period from 2016 to 2024 is
Table 49: Forecast Capital Investment Plan for Minera Candelaria
Candelaria
Capital Costs
Mine
Mill
Tailings
G&A
Total
Capitalized Waste
Total Cost
Unit
US$M
US$M
US$M
US$M
US$M
US$M
US$M
2016
2017
2018
2019
25.3
4.0
70.9
1.4
101.7
108.0
209.7
19.3
2.0
180.0
201.3
134.0
335.3
10.2
2.8
75.0
3.5
91.5
74.0
165.5
12.1
2.6
50.0
0.3
65.0
120.0
185.0
2016-2019
2020-2024
66.9
11.4
375.9
5.2
459.5
436.0
895.5
100.0
4.0
192.1
2.1
298.2
470.4
768.6
As shown, total capital expenditures excluding waste stripping over the period 2016 to 2019 are
forecast at US$459.5 million and from 2020 to 2024 at US$298.2 million.
The main capital project at Candelaria is the construction of the new Los Diques tailings storage
facility, which is scheduled to start in 2015 and is expected to be ready to receive its first tailings in
early 2018. The forecast capital for this project includes the cost of detailed engineering, the
construction of the initial starter dam, and the associated tailings distribution, seepage water
collection, relocation of site infrastructure (e.g., road and power lines), and return pumping systems.
From 2019, when the dam enters regular use, the capital cost includes conventional raises to the dam
and extensions to the distribution systems.
The mine capital costs comprise typical sustaining capital items for a mature open pit mine the cost
of which decreases as the mine approaches the end of its life. These sustaining items include
primarily the continuation of a well-established mine equipment rebuild programme on major rope
shovels and haul trucks as well as other mine equipment replacement. Capital expenditure in the
Candelaria Norte underground mine is also forecast on items such as power distribution and
ventilation infrastructure for the extended mine life.
Mill capital costs include sustaining items such as upgrades to the control systems and equipment
replacements in the Candelaria processing plant.
G&A costs include the final lift to the existing tailings dam as well as a number of environmental
and local community initiatives.
Lundin capitalizes waste stripping costs when experienced strip ratios are above the average planned
strip ratio for each open pit phase under development. During the production phase of the Candelaria
open pit mine, waste stripping costs, which provide probable future economic benefits and improved
access to the orebody are capitalized to mineral properties. Capitalized waste stripping from the open
pit is forecast to be US$436 million for the period 2016 to 2019, and US$470 million between 2020
and 2024 (Table 49).
The forecast capital expenditure estimate for the two contractor operated Ojos del Salado mines over
the next four years totals US$2.6 million, as it can be seen in Table 50.
September 4, 2015
Page 106
Table 50: Forecast Capital Investment Plan for Minera Ojos del Salado
Ojos del Salado
Capital Costs
Mine
Mill
Tailings
G&A
Total Cost
Unit
US$M
US$M
US$M
US$M
US$M
2016
1.1
0.0
0.1
1.2
2017
0.5
0.2
0.7
2018
0.4
0.1
0.5
2019 2016-2019 2020-2024
2.0
0.4
0.2
0.0
2.6
0.0
September 4, 2015
Page 107
21 Economic Analysis
Producing issuers may exclude the information required under Economic Analysis (Item 22 of
Form 43-101F1) for technical reports on properties currently in production unless the technical
report includes a material expansion of current production.
September 4, 2015
Page 108
22 Adjacent Properties
There are no adjacent properties that are relevant to the purpose of this technical report.
September 4, 2015
Page 109
23 Other Relevant Data and Information
There is no other relevant data available about the Candelaria Copper Mining Complex.
September 4, 2015
Page 110
24 Interpretation and Conclusions
The Candelaria Copper Mining Complex is a world class copper mining operation with a long life
potential. In 2014 the two operations’ combined payable metal was 155 kilotonnes of copper and
87,000 ounces of gold. Based on the June 30, 2015 Mineral Reserves, the projects are expected to
continue operations until 2032. Aggressive ongoing resource expansion exploration, however, has
the potential to extend the mine life beyond 2032 and further change the projected copper production
profile by replacing low grade open pit and stockpile mill feed with higher grade ore extracted from
the expanding underground mines and defer depletion of the low grade stockpiles.
In November 2014, Lundin acquired Freeport’s 80 percent interest in the Candelaria Copper Mining
Complex. As part of the acquisition process, a team of independent consultants under the leadership
of SRK prepared an initial technical report pursuant to National Instrument 43-101. The technical
report was filed on October 6, 2014. A team of independent consultants returned to the Candelaria
Copper Mining Complex from July 6 to 10, 2015 to review changes to the assets since June 2014.
The technical information about the Candelaria Copper Mining Complex is extensive and attests to
the overall high quality of the exploration, mine planning, and design work completed by site
personnel, as is expected from such an asset.
SRK examined the exploration, geology, Mineral Resource modelling, mine designs, Mineral
Reserve estimates, processing, and environmental aspects of the Candelaria Copper Mining
Complex. The purpose of the investigation was to confirm that the Mineral Resource and Mineral
Reserve estimates prepared by mine personnel were prepared in compliance with generally
recognized industry best practices and can be reported according to Canadian Institute of Mining,
Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (May
2014).
The Mineral Resources and Mineral Reserves are distributed in one open pit mine and three separate
underground mines. The resource models include 18 distinct block models and mine designs. SRK
audited a representative sample of the various block models and mine designs. For those models,
SRK was able to replicate the tabulations prepared by mine personnel within rounding errors. On the
basis of the results from the audit sample, SRK concludes that the Mineral Resources and Mineral
Reserves Statements for the Candelaria Copper Mining Complex as of June 30, 2015 are
appropriately categorized and free of material errors. Financial information examined during the
SRK investigations confirm that the Mineral Reserves are economic under the assumptions
considered.
SRK draws the following conclusions:




The Candelaria Copper Mining Complex is world class mining operations with a long life
potential.
Aggressive exploration conducted since 2010 has increased the Mineral Reserves of the
assets and allows extending the life of mine by three years to 2032.
Mineral Reserves are estimated using a copper price of US$2.75 per pound and a gold price
of US$1,000 per ounce.
A new tailings storage facility is required to support the current life of mine plan. The
environmental impact assessment submitted in 2013 under the name “Candelaria 2030 -
September 4, 2015










Page 111
Project Operational Continuity,” which includes the new Los Diques tailings facility, was
approved on July 23, 2015.
Delay in the construction of the new tailings facility could curtail production. However,
contingency plans exist (freeboard reduction and dam raise) to extend the life of the existing
tailings facility and mitigate construction delays.
The mines have their own state of the art export port facility at Punta Padrones with
significant excess capacity.
The successful commissioning in 2013 of the desalination plant (capacity of 500 litres per
second) at the Punta Padrones port site has greatly increased the water supply security of the
mines and has greatly reduced their reliance on sensitive local ground water supplies.
Ongoing aggressive exploration has defined new Mineral Resources and Mineral Reserves
in the underground mines, significantly extending their lives. Further exploration success has
the potential to extend their lives further and potentially allow increasing their throughput.
This will improve the copper production profile by replacing low grade open pit and
stockpile mill feed with higher grade underground ore and will defer stockpile depletion.
The proposed aggressive exploration program (US$119 million to 2018) could result in
further Mineral Resource and Mineral Reserve expansions if implemented.
Recent exploration in other parts of the large properties has identified several other
exploration targets, with good potential for identifying new IOCG sulphide deposits in this
exceptional IOCG deposit district.
Exploration has been successful in extending the life of the Candelaria Copper Mining
Complex to at least 2032. This success, coupled with the potential for further discoveries,
has the potential to extend the life of the mining complex further, but will require
modifications to the existing permits.
The environmental permit for the Alcaparrosa mine expires at the end of 2015, unless a
permit application to extend the mine life is submitted in 2015. There is a risk that the
Alcaparrosa mine could be forced to close temporarily at the end of 2015 until the extension
is approved.
The environmental permit for the Alcaparrosa mine expires at the end of 2015. Minera Ojos
del Salado has applied for an extension of the existing permits to continue to operate
Alcaparrosa. If by the end of 2015, a new permit is not in place, the Alcaparrosa mine may
be faced with temporary closure and in which case stockpiled ore from Candelaria will be
used to make up the plant feed difference until a new environmental permit is granted.
In May 2015, Minera Candelaria received from the Superintendent of Environment
notification of 16 environmental non-compliance charges, eight of which were classified as
serious. A compliance program submitted in June 2015 was rejected in July 2015. There is a
risk that Minera Candelaria could receive fines for the non-compliances. SRK is of the
opinion, however, that none of the non-compliances have caused serious environmental
impacts, and that most can be managed through the activities required as part of the
Candelaria 2030 project. SRK believes that the fines, if any, will not be material to the
company.
Other than disclosed in this technical report, SRK is not aware of any other significant risks and
uncertainties that could reasonably be expected to affect the reliability or confidence in the Mineral
Resource and Mineral Reserve estimates prepared for the Candelaria Copper Mining Complex.
September 4, 2015
Page 112
25 Recommendations
The Candelaria Copper Mining Complex comprises several operating copper mines with a combined
life of mine projected to 2032 with the depletion of the Mineral Reserves disclosed herein. Since
2010, aggressive exploration has defined several new sulphide mineralization zones amenable to
underground mining. These significant discoveries have a positive impact on the life and value of the
Candelaria Copper Mining Complex by replacing low grade open pit and stockpile plant feed with
higher grade underground ore, thereby deferring processing low grade work-in-progress stockpiles to
a later date. The increase in underground Mineral Reserves also allows increasing the throughput of
the underground mines.
In this context, SRK strongly recommends that if market conditions allow for discretionary
expenditures on exploration, Lundin continues the implementation of the exploration program
proposed to 2018. Furthermore, the rapid modelling of the Mineral Resources discovered by
exploration should continue to allow the conversion to underground Mineral Reserves and updating
of the life of mine plan to allow timely permitting.
The recent exploration discoveries at depth highlight the good exploration potential for the discovery
of new sulphide deposits elsewhere on the large exploration properties controlled by the Candelaria
Copper Mining Complex. In this context, the work on regional exploration targeting should continue,
including the use of high resolution geophysical data.
Presently, the three underground mines are not interconnected. Conceptual plans envision connecting
the Minera Ojos del Salado underground mines with Candelaria Norte with access to the new Susana
and Damiana sulphide zones. This interconnection would greatly facilitate material movement and
provide additional access for deep exploration. SRK is of the opinion that this proposed
interconnection has merit and should be studied further.
September 4, 2015
Page 113
26 References
AMEC International Ingeniería y Construcción Limitada (AMEC), 2013a: Estimation of useful life
of Minera Candelaria. Nr. M40210-FO-00-RPT-001. Freeport-McMoRan Copper & Gold
Inc., Project No. M40210, Compañia Contractual Minera Ojos del Salado. Issued: Dec. 9,
2013.
AMEC International Ingeniería y Construcción Limitada (AMEC), 2013b: Estimation of useful life
of Minera Ojos del Salado. Freeport-McMoRan Copper & Gold Inc., Project No. M40231,
Compañia Contractual Minera Ojos del Salado (LOM 2013). Issued: Nov. 27, 2013.
Arevalo, C., Grocott, J., Martin, W., Pringle, M., Tayler, G., 2006: Structural Setting of the
Candelaria Fe Oxide Cu-Au Deposit, Chilean Andes (27°30’ S), Economic Geology, 101, p.
819-841.
Chlumsky, Armbrust and Meyer, LLC (CAM), 2012: Resource and Reserve Verification, Candelaria
Project, Copiapó, Chile. Report prepared for Freeport-McMoRan Inc. on Feb. 3rd, 2012.
Dallmeyer, D., Brown, M., Grocott, J., Taylor, G.K., and Treloar, P., 1996: Mesozoic magmatic and
tectonic events within the Andean plate boundary zone, 26º-27º 30', North Chile: Constraints
from 40Ar/39Ar mineral ages: Journal of Geology, v. 104, p. 19–40.
Freeport-McMoRan (FMMR), 2014a: Candelaria & Ojos del Salado Overview, Exploration Review,
March 2014 Presentation.
Freeport-McMoRan (FMMR), 2014b: Mine Candelaria, Geology Superintendence, June 2014
Presentation.
Marschik, R., and Fontbote, L., 2001: The Candelaria-Punta del Cobre Iron Oxide Cu-Au(-Zn-Ag)
Deposits, Chile, Economic Geology, 96, p. 1799-1826.
Laznicka, P., 2010: Giant Metallic Deposits: Future Sources of Industrial Minerals, Springer, 2nd
edition, p. 950.
Richards, J.P., and Mumin, A.H., 2013: Magmatic-hydrothermal processes within an evolving Earth:
Iron oxide-copper-gold and porphyry Cu ± Mo ± Au deposits, Geology, 41, p. 767-770.
Sillitoe, R., 2003: Iron oxide-copper-gold deposits: an Andean view, Mineralium Deposita, 38, p.
787-812.
SRK, 2014: Technical Report for the Compañía Minera Candelaria and Minera Ojos del Salado
Copper Projects, Atacama Province, Region III, Chile. Technical Report prepared by SRK
Consulting (Canada) Inc. for Lundin Mining Corporation and dated October 6, 2014.
September 4, 2015
Page 114
APPENDIX A
Mineral Tenure Information
September 4, 2015
Page 115
September 4, 2015
Page 116
September 4, 2015
Page 117
September 4, 2015
Page 118
September 4, 2015
Page 119
APPENDIX B
List of Mining and Exploration Concessions
September 4, 2015
Page 120
Schedule A – Minera Candelaria Mining Exploitation Concessions
National Rol
03203-1863-7
03203-1817-3
03203-1987-0
03203-1287-6
03203-1775-4
03203-1904-8
03202-1986-8
03202-1987-6
03202-1988-4
03202-1389-2
03202-1990-6
03202-1991-4
03202-1992-2
03202-1993-0
03202-1994-9
03202-1983-3
03202-1984-1
03202-1985-K
03201-9704-K
03201-A368-6
03201-A369-4
03201-A370-8
03201-A366-K
03201-9705-8
03201-A364-3
03201-A365-1
03203-2009-7
03203-2717-2
03203-2718-0
03203-2719-9
03203-2720-2
03203-2721-0
03203-2722-9
03203-2723-7
03203-2724-5
03203-2108-5
03203-0053-3
03202-0932-3
03202-0933-1
03202-0934-K
03203-4953-2
03203-4955-9
03203-4956-7
03203-4954-0
03203-0230-7
03203-0229-3
03203-1622-7
03203-1623-5
03203-1624-3
03203-1370-8
03203-1371-6
03203-1372-4
03203-1373-2
03203-1704-5
03203-1705-3
03203-1374-0
03203-1441-0
03203-1479-8
Name
AFUERINA 1/12
AGUILA 1/12
AGUILA 31/35
ALCE 1/3
ANA 6
ANDALUCIA 1/10
ANDREA 10 1/20
ANDREA 11 1/20
ANDREA 12 1/20
ANDREA 13 1/20
ANDREA 14 1/40
ANDREA 15 1/40
ANDREA 16 1/40
ANDREA 17 1/60
ANDREA 18 1/60
ANDREA 7 1/20
ANDREA 8 1/20
ANDREA 9 1/20
ANDREA CINCO 1/40
ANDREA CUATRO 1/6
ANDREA CUATRO 11/20
ANDREA CUATRO 21/30
ANDREA DOS 1
ANDREA SEIS 21/40
ANDREA UNO 1/4
ANDREA UNO 11/20
ANGELICA 11/13
ANTONIA 1/10
ANTONIA 11/20
ANTONIA 21/30
ANTONIA 31/40
ANTONIA 41/50
ANTONIA 51/70
ANTONIA 71/80
ANTONIA 81/90
ANTONIA I 1/24
AURORA
BAHIA IV 1/10
BAHIA V 1/30
BAHIA VI 1/9
BELLAVISTA 1/8
BELLAVISTA 11/14
BELLAVISTA 15/18
BELLAVISTA 9/10
BERTA DOS AL ESTE
BERTA UNO AL NORTE
BRISA 1/10
BRISA 21/40
BRISA 41/45
BRONCE 1/10
BRONCE 11/20
BRONCE 21/30
BRONCE 31/36
BRONCE 37
BRONCE 38
BRONCE 41/50
BRONCE 51/70
BRONCE 71/89
Area
(ha)
96
50
25
9
5
50
100
100
100
100
200
200
200
300
300
100
100
100
200
32
50
70
4
200
42
130
15
100
100
100
100
100
100
100
100
120
200
200
100
24
16
20
6
3
4
50
60
100
89
100
47
1
2
100
100
86
Registration Information
Page Number
Year Registry
1404
278
10/10/1991 Property
1727 vta
299
09/07/1990 Property
1005
182
17/07/1991 Property
78
37
10/03/1986 Property
2676
536
18/12/1990 Property
27 vta
5
Año 1991 Property
850
779
21/11/2012 Discovery
852
780
854
781
856
782
858
783
860
784
862
785
864
786
866
787
844
776
846
777
848
778
3778
754
26/09/2013 Property
2728
517
24/06/2013 Property
4655 vta
950
13/11/2013 Property
2734 vta
518
24/06/2013 Property
4650 vta
949
13/11/2013 Property
3784 vta
755
26/09/2013 Property
2740
519
24/06/2013 Property
4644 vta
948
13/11/2013 Property
662
112
28/05/1991 Property
1772
318
27/10/1993 Property
1780
319
27/10/1993 Property
1788
320
27/10/1993 Property
1796
321
27/10/1993 Property
1804
322
27/10/1993 Property
1811
323
27/10/1993 Property
1818 vta
324
27/10/1993 Property
1826
325
27/10/1993 Property
204 vta
37
08/02/1994 Property
150 vta
255
Año 1904 Property
12
4
14/09/1999 Property
21
6
07/12/1999 Property
26
7
07/12/1999 Property
1467 vta
366
21/12/2009 Property
56 vta
14
13/01/2010 Property
63
15
13/01/2010 Property
1474
367
21/12/2009 Property
316
119
19/08/1939 Property
316
119
19/08/1939 Property
2232 vta
383
03/09/1990 Property
13 vta
3
11/01/1991 Property
21
4
Año 1991 Property
142
31
09/02/1987 Property
81
23
23/01/1987 Property
09/02/1987 Property
134
30
91 vta
24
23/01/1987 Property
935 vta
226
26/07/1989 Property
942
227
26/07/1989 Property
102
25
23/01/1987 Property
470
118
09/09/1987 Property
418 vta
166
19/10/1988 Property
Status
City
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
CALDERA
CALDERA
CALDERA
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
September 4, 2015
National Rol
03203-1583-2
03203-1584-0
03203-3940-5
03203-3939-1
03203-3938-3
03203-3945-6
03203-1905-6
03203-4354-2
03203-2762-8
03203-2782-2
03203-2688-5
03203-2689-3
03203-2781-4
03203-2685-0
03203-2686-9
03203-2687-7
03203-3346-6
03203-2330-4
03203-2331-2
03203-1338-4
03203-1808-4
03203-2095-K
03203-2154-9
03203-1749-5
03203-1645-6
03203-1646-4
03203-1647-2
03203-4995-8
03203-1772-K
03203-1773-8
03203-0784-8
03203-0775-9
03203-0324-9
03203-5820-5
03203-0289-7
03203-7012-4
03203-7013-2
03203-1463-1
03203-1409-7
03201-B587-0
03201-B595-1
03201-B596-K
03201-B597-8
03201-B598-6
03201-B599-4
03201-B600-1
03201-B601-K
03202-1941-8
03201-B588-9
03201-B589-7
03201-B289-8
03201-B590-0
03201-B591-9
03201-B592-7
03201-B593-5
03201-B594-3
03203-0053-3
03203-5824-8
03203-5825-6
03203-6400-0
Area
(ha)
Page Number
Year Registry
BRONCE 91/100
50
966
158
17/04/1990 Property
BRONCE 101/115
75
959
156
12/04/1990 Property
BRONCE CINCO 16/30
150 475 vta
136
22/05/2000 Property
BRONCE CUATRO 1/30
300
465
135
22/05/2000 Property
BRONCE TRES 1/30
300
2164
486
18/10/2011 Property
BRONCE VEINTE 1/10
40
1407
323
18/11/1999 Property
CALEDONIA 1/5
25
34 vta
6
Año 1991 Property
CARLA 10 11/15
300
67 vta
33
08/02/2005 Property
CAROLITA CINCO 1/10
40
540
85
11/04/1994 Property
CAROLITA CUATRO 1/10 200 1787 vta
316
26/12/1996 Property
CAROLITA DOS 1/25
120 2069 vta
372
28/12/1993 Property
CAROLITA DOS 31
2
2079
373
28/12/1993 Property
CAROLITA TRES 1/14
200 1776 vta
315
26/12/1996 Property
CAROLITA UNO 1/15
75
2046
369
28/12/1993 Property
CAROLITA UNO 16/22
14
2054
370
28/12/1993 Property
CAROLITA UNO 34/35
56
2062
371
28/12/1993 Property
CAROLITA VEINTIDOS
50 1495 vta
261
08/10/1996 Property
1/5
CHIQUITA
4 1083 vta
343
03/06/1992 Property
CHIQUITA I
1 1076 vta
342
03/06/1992 Property
CIERVO 1/3
9
85
38
10/03/1986 Property
CONDOR 1/3
6
1754
302
09/07/1990 Property
CORA 1/20
200 1352 vta
266
07/10/1991 Property
CORA 21/40
200
1758
332
09/12/1991 Property
COSTANERA 1/12
43 1648 vta
281
Año 1990 Property
CRUCES 1/20
88
952
155
12/04/1990 Property
CRUCES 21/40
100 1768 vta
304
09/07/1990 Property
CRUCES 41/66
130 2217 vta
381
30/08/1990 Property
CRUCES DOS 1/26
200 610 vta
138
22/06/2010 Property
CRUCES I 16/20
100
1750
331
09/12/1991 Property
CRUCES I 21/27
100
1646
316
13/11/1991 Property
DECIDIDA 1/2
10
261
140
Año 1956 Property
DELIRIO
5
929
148
06/04/1990 Property
DESPRECIADA 1
5
180 vta
82
14/09/1948 Property
DESPRECIADA 1/2
6 2921 vta
612 20-Aug-2012 Property
DICHOSA
5
272 vta
99
13/12/1936 Property
ELENA 1 1/8
60
ELENA 1 11/12
20
ESPERANZA 1/7
80 1652 vta
317
13/11/1991 Property
ESTEBAN 1/4
14
499 vta
70
01/02/1990 Property
ESTELA 1 1/40
200 4209 vta
1038
11/12/2014 Property
ESTELA 10 1/60
300 780 vta
161
11/02/2015 Property
ESTELA 11 1/30
200 4236 vta
1042
11/12/2014 Property
ESTELA 12 1/22
150 787 vta
162
11/02/2015 Property
ESTELA 12 31/43
150 793 vta
163
11/02/2015 Property
ESTELA 13 1/60
300
800
164
11/02/2015 Property
ESTELA 14 1/40
200
807
165
11/02/2015 Property
ESTELA 15 1/40
200 4243 vta
1043
11/12/2014 Property
ESTELA 16 1/40
200 898 vta
811
ESTELA 3 1/50
300
4216
1039
11/12/2014 Property
ESTELA 4 1/7
100 753 vta
157
11/02/2015 Property
ESTELA 5 1/60
300
1922
369
12/05/2015 Property
ESTELA 6 31/50
150 759 vta
158
11/02/2015 Property
ESTELA 7 1/40
300
766
159
11/02/2015 Property
ESTELA 8 1/44
220 4223 vta
1040
11/12/2014 Property
ESTELA 8 45/60
80 4230 vta
1041
11/12/2014 Property
ESTELA 9 1/60
300 773 vta
160
11/02/2015 Property
ESTRELLA
147
253
Año 1904 Property
FLORENCIA 14 1/9
50 2434 vta
528
26/07/2012 Property
FLORENCIA 15 1/5
15 2442 vta
529
26/07/2012 Property
FLORENCIA 18 2
100 669 vta
185
13/03/2014 Property
Page 121
Name
Status
City
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
COPIAPO Granted
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
CALDERA
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
In Process
In Process
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
September 4, 2015
National Rol
03203-5826-4
03203-5822-1
03203-7023-K
03203-7021-3
03203-5821-3
03203-0322-2
03203-1655-3
03203-0419-9
03203-0419-9
03203-1464-K
03203-4748-3
03203-1676-6
03203-4749-1
03203-0097-5
03203-1204-3
03203-2405-K
03203-2484-K
03203-2486-6
03203-2406-8
03203-2487-4
03203-2488-2
03203-2407-6
03203-2408-4
03203-2489-0
03203-2490-4
03203-2491-2
03203-2493-9
03203-2494-7
03203-2495-5
03203-2496-3
03203-2497-1
03203-2409-2
03203-2498-K
03203-2499-8
03203-2500-5
03203-2501-3
03203-2502-1
03203-2503-K
03203-2504-8
03203-1501-8
03203-7004-3
03203-6273-3
03203-6495-7
03203-7005-1
03203-0053-3
03203-1893-9
03203-1894-7
03203-0853-4
03203-1474-7
03203-1502-6
03203-1438-0
03203-1666-9
03203-1667-7
03201-5473-1
03201-5472-3
03201-5465-0
03201-5987-3
03203-3616-3
03203-3618-K
03203-3617-1
Name
FLORENCIA 22 1/15
FLORENCIA 4 1/5
FLORENCIA A18 21/40
FLORENCIA A3 1/12
FUNDENTE 1/20
FUNDENTE 1/5
GRANATE 120/126
INDEPENDENCIA
INDEPENDENCIA 1/20
LA PIRITA 1/7
LA PITA 1/15
LA POLLITA 1/13
LA POLO 1/6
LA SIETE POR CIENTO
1/3
LAR 1/10
MACARENA 111/129
MACARENA 131/140
MACARENA 176/180
MACARENA 181/195
MACARENA 196/200
MACARENA 211/240
MACARENA 241/260
MACARENA 261/270
MACARENA 271/273
MACARENA 274/280
MACARENA 281
MACARENA 288/297
MACARENA 298/305
MACARENA 306/307
MACARENA 316/325
MACARENA 336
MACARENA 346/365
MACARENA 366/385
MACARENA 386/405
MACARENA 406/425
MACARENA 426/433
MACARENA 434/437
MACARENA 442/444
MACARENA 445/464
MANTO PEDREGAL 1/3
MARTITA 1 1/2
MARTITA 10 1/40
MARTITA 6 1/17
MARTITA 9 1
MERCEDES
MILANO 41/44
MILANO 51/54
NIC CARTER 1/2
NIC CARTER II 1/20
OCHO POR CIENTO 1/5
OJANCO 1/20
OJANCO 61/84
OJANCO 85/96
OJANCO CINCO 14/15
OJANCO CINCO 3/5
OJANCO CUATRO 4/14
OJANCO DOS 1
OJANCO DOS 1/4
OJANCO DOS 11/16
OJANCO DOS 6/9
Page 122
Area
(ha)
Page Number
Year Registry
200 2449 vta
530
26/07/2012 Property
40
2426
527
26/07/2012 Property
100
7609
5343
150
7603
5340
200 1905 vta
429
21/06/2012 Property
18
130
95
08/10/1951 Property
35
40 vta
5
02/01/1990 Property
3
835
149
06/04/1990 Property
50
264 vta
109
13/12/1958 Property
43
100
39
09/04/1988 Property
60 1459 vta
365
21/12/2009 Property
100
623
160
10/05/1989 Property
24
1480
368
21/12/2009 Property
10
294
133
50
200
100
100
150
150
300
200
100
30
35
25
100
80
14
50
30
200
200
200
100
40
48
12
100
12
12
200
100
30
220 vta
1357 vta
1437 vta
1049 vta
1366 vta
1375 vta
1057
1384
1393 vta
1403
1412 vta
1421
1066 vta
1075
1083
1090 vta
1100
683 vta
1107 vta
1115 vta
454
1123 vta
1132 vta
1140
1148
1049
6050 vta
745
662
6052 vta
130 vta
484 vta
1012
134 vta
1119 vta
1035
205
2430 vta
1300 vta
546 vta
540
164 vta
869 vta
773
786 vta
779 vta
111
261
271
203
262
263
204
264
265
266
267
268
205
206
207
208
209
144
210
211
106
212
213
214
215
251
4185
156
184
4186
227
77
183
95
349
249
73
429
216
177
176
27
227
267
269
268
50
50
7
100
18
100
120
60
100
21
110
300
40
54
15
Status
City
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
In Process
In Process
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
12/12/1955 Property COPIAPO Granted
22/08/1983
13/09/1993
20/09/1993
18/08/1993
13/09/1993
13/09/1993
18/08/1993
13/09/1993
13/09/1993
13/09/1993
13/09/1993
13/09/1993
18/08/1993
18/08/1993
18/08/1993
18/08/1993
18/08/1993
19/05/1993
18/08/1993
18/08/1993
21/04/1993
18/08/1993
18/08/1993
18/08/1993
18/08/1993
22/08/1989
23/09/2013
11/02/2015
13/03/2014
23/09/2013
Año 1905
23/04/1991
17/07/1991
08/09/1942
11/06/1992
22/08/1989
22/06/1988
19/10/1990
10/05/1990
09/04/1998
09/04/1998
18/01/1999
07/12/2000
08/06/1998
08/06/1998
08/06/1998
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Discovery
Property
Property
Discovery
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
September 4, 2015
National Rol
03203-2264-2
03201-5988-1
03201-5461-8
03201-5463-4
03201-5460-K
03201-5474-K
03201-5476-6
03201-5475-8
03203-5261-4
03203-3609-0
03203-3607-4
03203-3612-0
03203-3613-9
03203-1497-6
03203-1403-8
03203-1744-4
03203-1585-9
03203-1586-7
03203-1587-5
03203-1588-3
03203-1625-1
03202-0849-1
03203-1099-7
03203-1506-9
03203-1626-K
03203-0325-7
03203-1431-3
03203-2327-4
03203-2328-2
03203-2329-0
03203-2904-3
03203-2903-5
03203-2906-K
03203-2037-2
03203-0077-0
03203-1496-8
03203-1755-K
03203-0053-3
03203-1022-9
03203-1789-4
03203-1790-8
03203-0053-3
03203-1788-6
03203-1680-4
03203-1742-8
03203-1743-6
03203-0112-2
03203-1698-7
03203-1756-8
03203-1757-6
03203-1758-4
03203-1846-7
03201-7174-1
03203-1480-1
03203-1543-3
03203-1663-4
03203-1759-2
03203-2451-3
03203-1478-K
Name
OJANCO I 41/50
OJANCO SEIS 1/18
OJANCO TRES 11/20
OJANCO TRES 24/38
OJANCO TRES 4/10
OJANCO VEINTIUNO 1/3
OJANCO VEINTIUNO
12/16
OJANCO VEINTIUNO 5/10
OLI CINCO 1/4
PAME UNO 24/28
PAME UNO 6/7
PAME DOS 26/36
PAME DOS 38/66
PELIGROSA 1/20
PELUSIN 1/10
POLA 1/4
PROTECTORA 1/10
PROTECTORA 21/40
PROTECTORA 41/52
PROTECTORA 55/68
PUDU 1/2
PUNTA PADRONES 1/33
RENO 1/6
RESCATADA 1/8
RINCON 1/2
RINCONADA 1/3
RORO 1/6
ROSALIA I
ROSALIA II
ROSALIA III
ROSICLER DOS 1/31
ROSICLER CUATRO 1/40
ROSICLER TRES 1/20
ROSITA
SAN GREGORIO
SAN JOSE 1/5
SAN JOSE Y SOFIA 1
SAN LUIS
SAN PANCRACIO 1/3
SAN PEDRO I 11/20,
31/34 Y 46/48
SAN PEDRO II 1/48
SAN RAMON
SANTA GEMITA II 1/20
SANTA GEMITA III 1/20
SANTA GEMITA IV 1/5
SANTA GEMITA V 1/10
SANTA ROSA 1/10
SANTA SOFIA 1/60
SANTA TERESA I 1/20
SANTA TERESA II 1/20
SANTA TERESA III 1/20
SUR 1/2
TOLITO II 1/6
VENADO 1/22
VENADO 25/39
VENADO II 1/10
VENADO II 17/46
VENTARRON 1/20
VIENTO 1/20
Page 123
Area
(ha)
Page Number
Year Registry
50
492
78
23/04/1991 Property
80
236 vta
69
11/04/2001 Property
80 1177 vta
340
14/07/1998 Property
80
499 vta
170
09/04/1998 Property
56 1033 vta
316
08/07/1998 Property
16
555 vta
178
09/04/1998 Property
Status
City
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
30
561 vta
179
60
100
24
24
60
120
100
50
100
50
100
70
70
2
132
25
100
5
12
30
1
1
1
200
200
200
4
5
25
200
1062 vta
438 vta
1290 vta
793 vta
184
1296 vta
713
35
1029 vta
487
1364 vta
1372
1488
2225
55
81 vta
181
403
464
261 vta
1152
1158
1836 vta
1438
1214
1430
927 vta
173
748
2080
152
102 vta
320
99
363
270
30
364
178
12
176
68
267
268
243
382
9
79
61
57
136
94
353
354
472
265
232
264
171
72
191
356
256
49
08/07/1998
27/02/2012
17/08/1998
08/06/1998
09/02/1999
17/08/1998
05/06/1989
04/02/1988
30/04/1990
31/01/1990
07/10/1991
07/10/1991
31/05/1990
03/09/1990
24/06/1997
25/06/1979
09/02/1989
31/01/1990
26/09/1966
11/08/1988
11/06/1992
11/06/1992
09/10/1992
05/10/1994
14/09/1994
05/10/1994
17/07/1991
28/07/1939
30/06/1989
14/08/1990
Año 1904
11/07/1972
300 1386 vta
227
98
123
200
50
100
51
60
100
100
100
2
1378
54 vta
2543
927
2691
2145
321
664 vta
1842 vta
1849
1856 vta
2331
226
19
450
225
538
368
142
166
473
474
475
400
15/05/1990
Año 1968
Año 1990
Año 1989
Año 1990
Año 1990
22/06/1959
12/05/1989
13/10/1992
13/10/1992
13/10/1992
12/09/1990
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
104
65
33
150
100
100
568
1213
386
573
577 vta
95 vta
234
290
55
82
130
35
22/12/1988
10/10/1989
31/01/1990
28/02/1990
05/05/1993
13/01/1989
Property
Property
Property
Property
Property
Property
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
13
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
CALDERA
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
September 4, 2015
National Rol
Name
03203-1408-9
03203-1544-1
03203-1545-K
03203-1546-8
03203-1508-5
03203-1664-2
03203-7092-2
03203-7093-0
03203-7094-9
03203-7095-7
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
VIENTO 21/31
VIENTO 41/58
VIENTO 59/84
VIENTO 85/102
VIENTO 103/122
VIENTO II 21/29
GEMA II 1/40
GEMA III 1/40
GEMA IV 1/10
GEMA V 1/20
ANDREA A7 1/20
ANDREA A8 1/20
ANDREA A9 1/20
ANDREA A10 1/20
ANDREA A11 1/20
ANDREA A12 1/20
ANDREA A13 1/20
ANDREA A14 1/40
ANDREA A15 1/40
ANDREA A16 1/40
ANDREA A17 1/60
ANDREA A18 1/60
ESTELA A16 1/40
ESTELA A1 1/40
ESTELA A2 1/60
ESTELA A3 1/60
ESTELA A4 1/20
ESTELA A5 1/60
ESTELA A6 1/60
ESTELA A7 1/60
ESTELA A8 1/60
ESTELA A9 1/60
ESTELA A10 1/60
ESTELA A11 1/40
ESTELA A12 1/30
ESTELA A12 31/60
ESTELA A13 1/60
ESTELA A14 1/40
ESTELA A15 1/40
Page 124
Area
(ha)
Page Number
Year Registry
41
150 vta
32
09/02/1987 Property
90
869 vta
214
19/07/1989 Property
130
502
132
20/04/1989 Property
90
508 vta
133
20/04/1989 Property
100
102
36
13/01/1989 Property
100 1745 vta
301
09/07/1990 Property
3369 vta
2328
3371
2329
3372 vta
2330
3374
2331
133
89
135
90
137
91
139
92
141
93
143
94
145
95
147
96
149
97
151
98
153
99
155
100
157
101
3914 vta
2749
3922 vta
2753
3924 vta
2754
3908 vta
2746
3926 vta
2755
3928 vta
2756
3930 vta
2757
3932 vta
2758
3934 vta
2759
3936 vta
2760
3916 vta
2750
3910 vta
2747
3912 vta
2748
3938 vta
2761
3918 vta
2751
3920 vta
2752
Status
City
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
CALDERA
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
In Process
Schedule A – Minera Candelaria Exploration Concessions
National Rol Name
03201-I114-8
03203-D035-6
03203-D037-2
03203-D038-0
03203-D039-9
03203-D024-0
03203-D321-5
03203-D322-3
03203-D323-1
03203-D324-K
03203-D325-8
03203-D331-2
03203-D332-0
03203-D333-9
ESTELA A10
MARTITA B10
FLORENCIA B3
FLORENCIA B14
FLORENCIA B18
BELLAVISTA A1
MARTITA B5
MARTITA B6
MARTITA B7
MARTITA B8
MARTITA B9
MARTITA B17
MARTITA B18
MARTITA B19
Area
(ha)
300
300
300
300
300
100
300
300
300
100
300
300
100
200
Page Number
Year Registry City
7239 vta
5051 13/11/2013 Discovery COPIAPO
3573
3568
3569 vta
3571 vta
5157 vta
223 vta
225
226 vta
228
229 vta
238 vta
240
241 vta
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Expiration
Date
09/09/2015
12/03/2016
13/03/2016
13/03/2016
13/03/2016
02/06/2016
14/10/2016
14/10/2016
14/10/2016
14/10/2016
14/10/2016
14/10/2016
14/10/2016
14/10/2016
September 4, 2015
National Rol Name
03203-D334-7
03203-D335-5
03203-D336-3
03203-D302-9
03203-D303-7
03203-D317-7
03203-D318-5
03203-D319-3
03203-D320-7
03203-D326-6
03203-D327-4
03203-D328-2
03203-D329-0
03203-D330-4
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
MARTITA B20
MARTITA B21
MARTITA B22
LICHA 1
LICHA 2
MARTITA B1
MARTITA B2
MARTITA B3
MARTITA B4
MARTITA B12
MARTITA B13
MARTITA B14
MARTITA B15
MARTITA B16
ANDREA B7
ANDREA B8
ANDREA B9
ANDREA B10
ANDREA B11
ANDREA B12
ANDREA B13
ANDREA B14
ANDREA B15
ANDREA B16
ANDREA B17
ANDREA B18
ESTELA B16
JUANITA 2
JUANITA 3
JUANITA 4
ESTELA B1
ESTELA B2
ESTELA B3
ESTELA B4
ESTELA B5
ESTELA B6
ESTELA B7
ESTELA B8
ESTELA B9
ESTELA B10
ESTELA B11
ESTELA B12
ESTELA B13
ESTELA B14
ESTELA B15
Area
(ha)
200
200
100
200
200
300
300
300
300
300
300
300
300
200
100
100
100
100
100
100
100
200
200
200
300
300
200
100
200
100
200
300
300
100
300
300
200
300
300
300
200
300
300
200
200
Page 125
Status Expiration
Page Number
Year Registry City
Date
243
162 12/01/2015 Discovery COPIAPO Granted 14/10/2016
244 vta
246
7461
7462 vta
217 vta
219
220 vta
222
231
232 vta
234
235 vta
237
159
102 17/04/2015 Discovery CALDERA In Process
N/A
161
N/A
163
N/A
165
N/A
167
N/A
169
N/A
171
N/A
173
N/A
175
N/A
177
N/A
179
N/A
181
N/A
183
N/A
2694
1844 20/05/2015 Discovery COPIAPO In Process
N/A
2696
N/A
2697 vta
N/A
2699
N/A
2700 vta
N/A
2702
N/A
2703 vta
N/A
2705
N/A
2706 vta
N/A
2708
N/A
2709 vta
N/A
2711
N/A
2712 vta
N/A
2714
N/A
2715 vta
N/A
2717
N/A
2718 vta
N/A
2720
N/A
September 4, 2015
Page 126
Schedule B – Minera Ojos del Salado Mining Exploitation Concessions
National Rol Name
03203-0748-1
03203-0749-K
03203-0932-8
03201-0095-K
03203-2165-4
03201-5796-K
03201-5728-5
03201-5797-8
03201-5800-1
03201-5798-6
03201-5799-4
03201-5795-1
03201-5189-9
03201-0728-8
03203-3245-1
03203-1876-9
03203-3170-6
03201-2431-K
03203-1978-1
03203-1981-1
03203-1982-K
03203-1983-8
03203-1984-6
03203-1985-4
03203-1979-K
03203-1970-6
03203-2980-9
03203-5655-5
03203-5656-3
03203-6329-2
03203-6486-8
03203-0276-5
03201-5991-1
03203-4067-5
03203-4068-3
03201-5990-3
03201-2203-1
03201-0180-8
03201-1509-4
03203-2751-2
03201-0034-8
03201-2118-3
03203-1648-0
03203-1649-9
03203-1650-2
03203-1651-0
03203-1652-9
03203-1653-7
03203-1654-5
03203-1632-4
03203-1885-8
03203-3224-9
03203-3621-K
03203-3968-5
03203-0829-1
03203-2800-4
Area
(ha)
5
10
8
5
Status
Page Number
Year Registry City
163 vta
207 24/07/1877 Property COPIAPO Granted
370
86
4
ALCAPARROSA
ALCAPARROSA II y IV
ALTA SIERRA 1/11
AURORA 1
BLANCA TORRE DE
25
1906
CARRIZALILLO 1/25
BONANZA CUARTA 1/60
300 347 vta
BONANZA DOS 1/10
40 177 vta
BONANZA SEXTA 1
4 354 vta
BONANZA SEXTA 11, 12, 33/60 260
370
BONANZA SEXTA 6
10 359 vta
BONANZA SEXTA 7/10
20 364 vta
BONANZA TERCERA 1/60
300 340 vta
BONANZA UNO 1/40
200 288 vta
CARMEN
1
253
CARO TRES 37
200 230 vta
CAROLITA 1/7
56
1296
CAROLITA SEIS 1/10
30
1919
CECILIA 1/106
506
173
CHICA 1/3
6 997 vta
CHICA 14/20
40
1222
CHICA 22/25
8 971 vta
CHICA 26/31
18 988 vta
CHICA 32/38
42
979
CHICA 39
1 965 vta
CHICA 4/12
36 957 vta
CLAUDIA 1/17
100 153 vta
COALA DOS 11/24
200
42 vta
COALA TRES 13/20
200
51
COIPA 1/30
144 238 vta
CONDOR 1/20
100
847
COOPERATIVA AGUSTINA
50
438
1/10
COTOPAXI 1/3
15
483
CRUCES NUEVE 1/20
200 829 vta
CRUCES OCHO 1/15
200 816 vta
CRUCES OCHO 41/60
100
823
CRUCES SIETE 1/20 y 31/50
300
810
CUTANA 1/10
47
138
DESCUBRIDORA 1/2
10
123
DESPRECIADA 1/2
10
1
DICASO 1/9
200 131 vta
ESCAPADA
30 406 vta
GLADYS 1/73
358 111 vta
GRANATE 1/21
105
1279
GRANATE 22/41
100 1293 vta
GRANATE 42/48
110
1761
GRANATE 64/76
110
1249
GRANATE 86/90
30 190 vta
GRANATE 92/104
65
425
GRANATE 105/119
75 1695 vta
HERCULES 35/60
154
610
HERCULES II 1/12
100 257 vta
JILGUERO DOS 1/10
210
36 vta
JILGUERO SEGUNDA 21/23
100 1395 vta
JILGUERO SEGUNDA 41/45
100
1401
LA DICHOSA 1/2
10 304 vta
LADRILLOSDOS 27/39
39
2037
78
29
79
82
80
81
77
44
94
34
243
302
71
181
365
178
180
179
177
176
25
6
7
98
143
22/03/1999
09/02/1999
22/03/1999
22/03/1999
22/03/1999
22/03/1999
22/03/1999
27/02/1997
08/11/1935
19/02/1996
26/09/1991
01/12/1995
24/04/1986
17/07/1991
03/07/1992
17/07/1991
17/07/1991
17/07/1991
17/07/1991
17/07/1991
18/02/1991
05/01/1995
05/01/1995
13/06/1957
30/06/1997
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
Property
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
124
207
205
206
204
44
62
1
61
177
57
213
215
303
210
21
60
294
87
40
5
321
322
137
368
16/11/1962 Property
29/11/2000 Property
29/11/2000 Property
29/11/2000 Property
29/11/2000 Property
02/07/1971 Property
09/10/1952 Property
06/05/1947 Property
16/04/1981 Property
01/11/1938 Property
09/04/1981 Property
11/05/1990 Property
11/05/1990 Property
09/07/1990 Property
11/05/1990 Property
09/01/1990 Property
31/01/1990 Property
05/07/1990 Property
08/03/1990 Property
12/02/1992 Property
03/01/1996 Property
18/11/1999 Property
18/11/1999 Property
12/12/1955 Property
28/12/1993 Property
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
COPIAPO
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
September 4, 2015
National Rol Name
03203-2810-1
03203-2811-K
03203-2799-7
03201-2169-8
03203-4107-8
03203-4109-4
03203-4110-8
03203-4111-6
03203-4108-6
03203-0440-7
03203-0444-K
03203-0445-8
03201-5125-2
03203-4028-4
03203-2481-5
03203-2479-3
03203-2480-7
03203-2506-4
03203-2508-0
03203-2483-1
03203-2482-3
03203-4014-4
03203-0564-0
03203-1736-3
03203-1976-5
03201-2302-K
03203-0843-7
03203-0700-7
03203-3260-5
03203-1891-2
03203-1988-9
03203-1989-7
03203-2065-8
03203-1971-4
03203-3477-2
03203-3472-1
03203-3473-K
03203-3824-7
03203-3750-K
03203-3474-8
03203-3475-6
03203-3476-4
03203-0663-9
03203-1657-K
03203-1659-6
03203-1660-K
03203-2249-9
03203-3703-8
03203-2912-4
03203-0677-9
03203-0725-2
03203-2111-5
03203-2112-3
03203-2113-1
03203-2110-7
03203-2114-K
03203-2115-8
03203-2116-6
03203-2118-2
03203-0582-9
03203-0588-8
LADRILLOSTRES 1/10
LADRILLOSTRES 51/52
LADRILLOSUNO 1/22
LAS ADRIANITAS 1/28
LAS PINTADAS 1/37
LAS PINTADAS 121/125
LAS PINTADAS 131/135
LAS PINTADAS 141
LAS PINTADAS 61/120
LASTENIA
LAURA REBECA
LAURA SEGUNDA
LEON 1/20
MACA DOS 61/62
MACARENA 61/70
MACARENA 11/28
MACARENA 41/49
MACARENA 469/478
MACARENA 495/497
MACARENA 101/110
MACARENA 81/87
MAK CUATRO 1/4
MALAQUITA 1/156
MALAQUITA 157
MALAQUITA 159/161
MAMIÑA 1/125
MANTO MONSTRUO UNO
MARCELA DEL CARMEN 1/5
MARTA 1/30 (27/28)
MILANO 1/10
MONUNA 1/2
MONUNA 3
NEGRA 1/30
OLGA 1/10
PANDA CUARTA 1/20
PANDA CUATRO 1
PANDA CUATRO 2/8
PANDA CUATRO 9/10
PANDA QUINTA 1/24
PANDA SEGUNDA 1/15
PANDA TERCERA 1/10
PANDA TERCERA 11/30
PEDRO A. CERDA 1/10
PINTADAS 21/39
PINTADAS 66/72
PINTADAS 79/96
PINTADAS 73
POR SI ACASO 1
QUILIMARI I 1/11
REBECA SEGUNDA
RELAVE 1/2
RENACER 14/26
RENACER 28/32
RENACER 35/51
RENACER 4/13
RENACER 55/58
RENACER 69/83
RENACER 84/92
RENACER 105/135
RESGUARDO
RESGUARDO 1/4
Area
(ha)
110
15
150
45
300
50
50
50
300
2
2
2
100
200
100
200
100
80
25
100
100
300
589
4
12
582
5
25
8
100
2
2
300
100
100
5
21
6
140
150
50
100
40
120
91
120
4
8
200
1
10
70
35
100
50
70
75
50
200
1
4
Page 127
Status
Page Number
Year Registry City
1206 vta
1560 vta
2025 vta
266 vta
1
24 vta
32
38 vta
11
58
95 16-07-1890 Property COPIAPO Granted
434
434
855
485 vta
1023 vta
1014
587
1164
1182 vta
1040 vta
1032 vta
491
183
580
835 vta
219 vta
192
235
192
477 vta
951 vta
945 vta
608
146 vta
1558
1546
1551 vta
1028 vta
63 vta
1564 vta
1570 vta
1577 vta
487 vta
498 vta
60 vta
1737
616
1428
1274
434
118
1135 vta
1144
1575
582 vta
1585
178
807 vta
186 vta
192
418 vta
September 4, 2015
Page 128
National Rol Name
03203-0980-8
03203-2750-4
03203-2752-0
03203-2749-0
03203-0904-2
03203-0888-7
03203-0054-1
03203-3908-1
03203-3909-K
03201-4993-2
03203-2759-8
03203-2760-1
03203-0139-4
03203-0145-9
03203-0985-9
03203-0603-5
03203-1637-5
03203-1638-3
03203-1639-1
03203-1642-1
03203-1643-K
03203-1644-8
03203-1662-6
03203-2517-K
03203-1590-5
03203-1591-3
03203-1482-8
03201-7107-5
03203-0782-1
03203-0294-3
03203-0296-K
03201-5048-5
03203-1633-2
03203-1634-0
03203-2505-6
03203-2507-2
03203-1990-0
03203-1991-9
03203-0625-6
03203-1658-8
03203-1818-1
03203-1595-6
03203-1596-4
03203-1592-1
03203-1593-K
03203-1594-8
03201-8842-3
03201-9234-K
03201-9235-8
03201-9236-6
03201-9237-4
03201-9238-2
03201-9239-0
03201-9240-4
03201-9241-2
03201-7795-2
03201-7796-0
03201-7797-9
Area
Status
(ha)
Page Number
Year Registry City
SAN CARLOS 1/2
15
COPIAPO
SAN ESTEBAN
10
48 vta
SAN JOSE Y SOFIA 2
200
2080
SAN PEDRO I 1/10,21/30,35/45 300 1386 vta
SAN PEDRO II 49/68
200
1378
SANTA AURORA 1/8
32 121 vta
SANTOS VETA Y STOS.
8
306
MANTOS
SOFIA
1
85 vta
90 05-07-1890 Property COPIAPO Granted
SOL SEGUNDA 10/12
120 376 vta
SOL SEGUNDA 13/22
80 382 vta
SUERTE CINCO 1, 2, 3, 7, 8,
300
221
13, …
TAURO TRES 1
20 1225 vta
TAURO TRES 3
4 693 vta
TERESA MARIA
3
57 vta
TIRANA
5 113 vta
VERI 1/11
48 302 vta
VETA GRUESA
2
7 vta
ALBA 17/36
100 1064 vta
ALBA 37/56
100 1157 vta
ALBA 57/76
100
447
ALBA 127/156
132 1164 vta
ALBA 157/160
11
470
ALBA 163/169
22 478 vta
CORITA 1/8
40
1896
MACARENA 969/978
34
1231
TORO 1/20
100 574 vta
TORO 21/40
94 630 vta
ROCIO 1/8
55 209 vta
72 Año 1989 Property COPIAPO Granted
LECHUZA 1/40
200
65
DESCUIDADA 6
3
COPIAPO
DESCUIDADA 11
2
COPIAPO
DESEADA
5
71
NATALIA 1/3
6 799 vta
HERCULES 63/90
112 1903 vta
HERCULES 91/101
40 1306 vta
MACARENA 467
4
1157
MACARENA 485/494
20
1174
MONUNA 7
3 939 vta
MONUNA 8
1 933 vta
ÑA LU 1/6
30
158
PINTADAS 45/65
80 1267 vta
PINTADAS II 1/15
50 1257 vta
TORO 101/120
99
653
TORO 121/133
100
645
TORO 41/60
100 580 vta
TORO 61/75
100
639
TORO 81/100
100
587
LECHUZA SUR 1/15
100 2464 vta
MARK I 1/40
200 1913 vta
MARK II 1/60
300 3410 vta
MARK III 1/60
300 1919 vta
MARK IV 1/33
200
3417
MARK V 1/59
300
3426
MARK VI 1/54
270
56
MARK VI 55/57
15
3435
MARK VI 59/60
15
1926
MARK 1/40
200
445
MARK 41/100
300 1362 vta
MARK 101/160
300 452 vta
September 4, 2015
National Rol Name
03201-7798-7
03201-7799-5
03201-7800-2
03203-5655-5
03203-5656-3
03203-5801-9
03203-5802-7
03201-9891-7
03203-6329-2
03203-6486-8
03203-6774-3
03203-6775-1
03203-6881-2
03203-6954-1
03203-6955-K
03203-6956-8
03203-6957-6
03203-6958-4
03203-6959-2
MARK 161/193
MARK 201/259
MARK 261/318
BRISA TRES 1/2
BRISA CUATRO 1/2
PINTA 1
PINTA 2/11
PUNTA NEGRA A 1/40
BRISA SIETE 1/2
BUITRE 2 1/48
VIENTO A10 1
VIENTO A11 1/20
DANIELA DIEZ 1/3
CORA A1 1/60
CORA A2 1/60
CORA A3 1/40
CORA A4 1/39
CORA A5 1/43
CORA A6 1/7
Area
(ha)
200
300
300
6
10
5
30
200
54
300
100
100
100
300
300
200
300
300
100
Page 129
Status
Page Number
Year Registry City
1370
1379 vta
1389 vta
2457 vta
747 vta
2472
2478 vta
675 vta
689 vta
682
866 vta
872
813 vta
11292 vta
11294 vta
11296 vta
11298 vta
11300 vta
11302 vta
Schedule B – Minera Ojos del Salado Exploration Concessions
National Rol Name
03203-A905-5
03203-A906-3
03203-A907-1
03203-A908-K
03203-C120-9
03203-C121-7
03203-C122-5
03203-C123-3
03203-C124-1
03203-C125-K
03203-C126-8
03203-C127-6
03203-C128-4
03203-C497-6
03203-D655-9
03203-D663-K
03203-D656-7
03203-D662-1
03203-D658-3
03203-D661-3
03203-D657-5
03203-D660-5
03203-D659-1
N/A
N/A
N/A
N/A
N/A
N/A
CAMILA B1
CAMILA B2
CAMILA B3
BUITRE B2
VIENTO B1 (renewal)
VIENTO B2 (renewal)
VIENTO B3 (renewal)
VIENTO B4 (renewal)
VIENTO B5 (renewal)
VIENTO B6 (renewal)
VIENTO B7 (renewal)
VIENTO B8 (renewal)
VIENTO B9 (renewal)
CORA B3 (renewal)
VIENTO C1
VIENTO C2
VIENTO C3
VIENTO C4
VIENTO C5
VIENTO C6
VIENTO C7
VIENTO C8
VIENTO C9
CORA C1
CORA C2
CORA C3
CORA C4
CORA C5
CORA C6
Area
(ha)
200
300
300
300
100
100
100
100
100
100
100
100
100
100
300
300
300
300
300
200
200
200
300
300
300
200
300
300
100
Status
Expiration
Page Number
Year Registry City
Date
211
212 vta
215
216
299 vta
301
302 vta
304
305 vta
307
308 vta
310
311 vta
6679
6157
6158 vta
6160
6161 vta
6163
6164 vta
6166
6167 vta
6169
3277 vta
N/A
3279
N/A
3280 vta
N/A
3282
N/A
3283 vta
N/A
3285
N/A
September 4, 2015
Page 130
APPENDIX C
Detailed Mining and Surface Rights Maps
September 4, 2015
Page 131
September 4, 2015
Page 132
September 4, 2015
Technical Report for Candelaria Copper Mining Complex, Chile
Page 133
Signature Page
Prepared for:
150 King Street West, Suite 1500
P.O Box 38
M5H 1J9
Prepared by:
Suite 1300, 151 Yonge Street
M5C 2W7
SRK Project Number 3CL016.000
Effective date:
Signature date:
June 30, 2015
September 4, 2015
Authored by:
[Signed and sealed]
(Geology)
[Signed and sealed]
Glen Cole, PGeo
(Resource Geology)
[Signed and sealed]
[Signed and sealed]
John Nilsson, PEng
Independent Consultant
[Signed and sealed]
Adrian Dance, PEng
(Mineral Processing)
[Signed and sealed]
(Environment)
Approved by:
[Signed and sealed]
(Geology)
September 4, 2015
Page 134
CERTIFICATE OF QUALIFIED PERSON
To accompany the report entitled Technical Report for the Candelaria Copper Mining Complex,
Region III, Chile and having an effective date of June 30, 2015.
I, Jean-François Couture, do hereby certify that:
1) I am a Corporate Consultant (Geology) with the firm of SRK Consulting (Canada) Inc. with an office at Suite
1300, 151 Yonge Street, Toronto, Ontario, Canada;
2) I am a graduate of the Université Laval in Quebec City with a BSc. in Geology in 1982. I obtained a MScA in
Earth Sciences and a PhD in Mineral Resources from Université du Québec à Chicoutimi in 1986 and 1994,
respectively. I have practiced my profession continuously since 1982. From 1982 to 1988, I conducted regional
mapping programs in the Precambrian Shield of Canada, from 1988 to 1996; I conducted mineral deposit studies
for a variety of base and precious metals deposits of hydrothermal and magmatic origins. From 1996 to 2000, I
was a Senior Exploration Geologist responsible for the development, execution and management of exploration
program for base and precious metals in Precambrian terranes, including volcanogenic sulphide deposits. Since
2001 I have authored and co-authored several independent technical reports on several base and precious metals
exploration and mining projects worldwide;
3) I am a Professional Geoscientist registered with the Association of Professional Geoscientists of the province of
Ontario (APGO#0197) and l’Ordre des Géologues du Québec (OGQ#1106);
4) I have visited the subject projects from July 6 to 10, 2015;
5) I have read the definition of Qualified Person set out in National Instrument 43-101 and certify that by virtue of
my education, affiliation to a professional association, and past relevant work experience, I fulfill the requirements
to be a Qualified Person for the purposes of National Instrument 43-101 and this technical report has been
prepared in compliance with National Instrument 43-101 and Form 43-101F1;
6) I, as a Qualified Person, am independent of the issuer as defined in Section 1.5 of National Instrument 43-101;
7) I am the co-author of this report and responsible for Sections 1 to 11, 18, 21, 22, 23, 26 and parts of 24 and 25, and
accept professional responsibility for those sections of this technical report;
8) In 2014, I have co-authored a previous technical report about Compañía Contractual Minera Candelaria and
Compañía Contractual Minera Ojos del Salado for Lundin Mining Corporation and Franco-Nevada Corporation;
9) I have read National Instrument 43-101 and confirm that this technical report has been prepared in compliance
therewith;
10) SRK Consulting (Canada) Inc. was retained by Lundin Mining Corporation to prepare a technical report, including
a Mineral Resource and Mineral Reserve Statement, for the Compañía Contractual Minera Candelaria and
Compañía Contractual Minera Ojos del Salado copper projects located in Chile in accordance with National
Instrument 43-101 and Form 43-101F1 guidelines. This assignment was completed using CIM Estimation of
Mineral Resources and Mineral Reserves Best Practice Guidelines and Canadian Securities Administrators’
National Instrument 43-101 guidelines. This assignment was completed using the environmental and social
requirements applicable at the time in Chile and taking cognisance of good international industry practice as
specified in the IFC Performance Standards;
11) I have not received, nor do I expect to receive, any interest, directly or indirectly, in the Compañía Contractual
Minera Candelaria and Compañía Contractual Minera Ojos del Salado copper projects or securities of Lundin
Mining Corporation; and
12) That, as of the effective date of this technical report, to the best of my knowledge, information and belief, this
technical report contains all scientific and technical information that is required to be disclosed to make the
technical report not misleading.
Toronto, Ontario
September 4, 2015
[“signed and sealed”]
Jean-François Couture, PGeo (APGO#0197)
Corporate Consultant (Geology)
September 4, 2015
Page 135
I, Glen Cole, do hereby certify that:
1) I am a Principal Consultant (Resource Geology) with the firm of SRK Consulting (Canada) Inc. with an office at
Suite 1300, 151 Yonge Street, Toronto, Ontario, Canada;
2) I am a graduate of the University of Cape Town in South Africa with a BSc (Hons) in Geology in 1983; I obtained
a MSc (Geology) from the University of Johannesburg in South Africa in 1995 and a M.Eng in Mineral
Economics from the University of the Witwatersrand in South Africa in 1999. I have practiced my profession
continuously since 1986. Between 1986 and 1989 I worked as a staff geologist on various Anglo American mines.
Between 1989 and 2005 I have worked for Goldfields Ltd at several exploration projects, underground and open
pit mining operations in Africa and held positions of Mineral Resources Manager, Chief Mine Geologist and Chief
Evaluation Geologist, with the responsibility for estimation of Mineral Resources and Mineral Reserves for
development projects and operating mines. Since 2006, I have estimated and audited Mineral Resources for a
variety of early and advanced base and precious metals projects in Africa, Canada, Chile and Mexico;
3) I am a Professional Geoscientist registered with the Association of Professional Geoscientists of the Province of
Ontario (APGO#1416), the Association of Professional Engineers and Geoscientists of the Province of
Saskatchewan (PEGS#26003) and am also registered as a Professional Natural Scientist with the South African
Council for Scientific Professions (Reg#400070/02);
4) I have personally inspected the subject projects between June 16 and 18, 2014;
7) I am the co-author of this report and responsible for Sections 13 and parts of 24 and 25, and accept professional
responsibility for those sections of this technical report;
Compañía Contractual Minera Ojos del Salado for Lundin Mining Corporation and Franco-Nevada Corporation;;
therewith;
Toronto, Ontario
September 4, 2015
Glen Cole, PGeo (APGO#1416)
Principal Consultant (Resource Geology)
September 4, 2015
Page 136
I, Adrian Dance, do hereby certify that:
1) I am a Principal Consultant (Metallurgy) with the firm of SRK Consulting (Canada) Inc. with an office at
22nd Floor, 1066 West Hastings Street, Vancouver, British Columbia, Canada;
2) I am a graduate of the University of British Columbia in 1987 and the University of Queensland in 1991 where I
obtained a BASc in Mineral Processing and a PhD in Mineral Processing. I have practiced my profession
continuously since 1991 where I have both worked at copper processing operations in Canada and Peru as well as
consulted on a range of copper-gold processing projects around the world;
3) I am a professional engineer registered with the APEGBC, license # 37151;
4) I have not personally visited the subject projects but relied on a site visit conducted between July 6 and 10, 2015
by Jean-Francois Couture, PGeo (APGO#0197), a co-author of this technical report;
7) I am the co-author of this report and responsible for Sections 12, 16, 17 and parts of 20, 24, and 25, and accept
professional responsibility for those sections of this technical report;
8) I have participated in a review of Candelaria’s grinding circuit performance in 2006, and in 2014, I have coauthored a previous technical report about Compañía Contractual Minera Candelaria and Compañía Contractual
Minera Ojos del Salado for Lundin Mining Corporation and Franco-Nevada Corporation;
therewith;
Vancouver, British Columbia
September 4, 2015
Adrian Dance (PEng #37151)
Principal Consultant (Metallurgy)
September 4, 2015
Page 137
I, Gary Poxleitner, do hereby certify that:
1) I am a Principal Consultant (Mining Engineering) with the firm of SRK Consulting (Canada) Inc. with an office at
Suite 101, 1984 Regent Street South, Sudbury, Ontario, Canada;
2) I am a graduate of the Laurentian University in Sudbury, Ontario in 1991, I obtained a Bachelor of Engineering
degree. I have practiced my profession continuously since 1991. I have 24 years of both operations and
engineering underground experience. I have worked primarily in underground mines including blast hole open
stope and narrow vein mining in commodities such as base metals, gold, silver, diamonds, salt, copper and
uranium. I have designed and managed complex studies, including mine optimization; budgeting and cost
estimation; economic evaluations; due diligence and independent review; as well as mine audits. I have also been
engaged in the process of converting Mineral Resources to Mineral Reserves;
3) I am a Professional Engineer registered with Professional Engineers Ontario (PEO#100015286);
4) I have personally inspected the subject projects between June 10 and 12, 2014, between June 16 and 18, 2014 and
from July 6 to 10, 2015;
7) I am the co-author of this report and responsible for parts of Sections 14 and 15, and accept professional
responsibility for those sections of this technical report;
therewith;
Gary Poxleitner, PEng (PEO#100015286)
Sudbury, Ontario
Principal Consultant (Mining Engineering)
September 4, 2015
September 4, 2015
Page 138
I, John Nilsson, do hereby certify that:
1) I am President with the firm of Nilsson Mine Services with an office at 20263 Mountain Place, Pitt Meadows,
British Columbia;
2) I am a graduate of Queen’s University in Kingston, Ontario with a BSc in Geology in 1977, I obtained an MSc in
Mining Engineering from Queen’s University in 1990. I have practiced my profession continuously since 1977.
3) I am a professional Engineer registered with the Association of Professional Engineers and Geoscientists of British
Columbia (#20697);
4) I have personally inspected the subject projects between June 10 and 12, 2014, June 16 and 18, 2014 and from
July 6 to 10, 2015;
7) I am the co-author of this report and responsible for parts of Sections 14, 15, 20, 24 and 25, and accept
professional responsibility for those sections of this technical report;
therewith;
10) Nilsson Mine Services Ltd. was retained by Lundin Mining Corporation to prepare sections of a technical report,
including contributions to a Mineral Reserve Statement, for the Compañía Contractual Minera Candelaria copper
project located in Chile in accordance with National Instrument 43-101 and Form 43-101F1 guidelines. This
assignment was completed using CIM Estimation of Mineral Resources and Mineral Reserves Best Practice
Guidelines and Canadian Securities Administrators’ National Instrument 43-101 guidelines;
Pitt Meadows, British Columbia
September 4, 2015
John Nilsson, PEng (APEGBC#20697)
President Nilsson Mine Services Ltd.
September 4, 2015
Page 139
I, Cameron C. Scott, do hereby certify that:
1) I am a Principal Consultant (Geotechnical Engineering) with the firm of SRK Consulting (Canada) Inc. with an
office at Suite 2200, 1066 West Hastings Street, Vancouver, British Columbia, Canada;
2) I am a graduate of the University of British Columbia in 1974, I obtained a BASc Degree in Geological
Engineering and subsequently was granted an MEng. I also obtained a Degree in Civil Engineering (Geotechnical
Option) by the University of Alberta in 1984. I have practiced my profession continuously since 1974. I have
worked as a Geotechnical Engineer for a total of 40 years. Most of my professional practice has focused on the
geotechnical and hydrogeological aspects of mining, including the site selection, design, permitting, operation and
closure of mine waste facilities in Canada, the US, Mexico, Central and South America, Europe and various
countries within the former Soviet Union.
3) I am a professional Engineer registered with the Association of Professional Engineers and Geoscientists of British
Columbia (#11523) since 1978;
4) I have not personally visited the subject projects but relied on a site visit conducted between July 6 and 10, 2015
by Jean-Francois Couture, PGeo (APGO#0197), a co-author of this technical report;
7) I am the co-author of this report and responsible for Section 19, and accept professional responsibility for that
section of this technical report;
Compañía Contractual Minera Ojos del Salado for Lundin Mining Corporation and Franco-Nevada Corporation;
therewith;
Vancouver, British Columbia
September 4, 2015
Cameron C. Scott (PEng #11523)
Principal Consultant (Geotechnical Engineering)
September 4, 2015

Candelaria NI 43-101 Technical Report

Transcription

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