Cerro Corona mine - Mineral Resources and Mineral Reserves

Geological and evaluation models have been updated as at December 2017 to reflect the latest available data sets.

The Mineral Resources and Mineral Reserves are reported, at a net smelter return (NSR) cut-off of US$14.75/t and are constrained by the total capacity of the upgraded tailing storage facility of 112Mt (54Mt post December 2017), total in-pit TSF capacity of 31Mt and the confirmed waste storage facility (WSF) volumes.

The LoM capital costs consist predominantly of TSF wall raising and seepage control measures (containment blankets), WSF expansion and a water treatment plant.

Mineral Resources

The Mineral Resource estimates are classified as Measured, Indicated and Inferred as described in SAMREC Code. Mineral Resource categories are assigned with consideration given to geological complexity, grade variance, drill hole spacing and mine development and are reported as in situ within a pit shell. The geological model is based on lithology, mineralisation, alteration, and structure using information from exploratory and infill drill holes, blast holes and in-pit mapping. The long-term resource model is based on exploration and resource drilling data. The medium-term model, which covers three benches, uses a combination of drill holes and blast holes, and is projected three benches below the mined pit surface.

Mineral Resource classification

Gold Tonnes (kt)     Grade (g/t)     Gold (koz)  
Classification Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015  
Open pit
Measured 59,760   59,587 71,592     0.75   0.82 0.82     1,442   1,577 1,879  
Indicated 41,000   24,689 23,317     0.49   0.56 0.58     652   446 434  
Inferred 3,290   2,352 3,335     0.43   0.57 0.56     46   43 60  
Total open pit 104,050   86,629 98,245     0.64   0.74 0.75     2,140   2,066 2,373  
Surface
Oxides Measured 7,114   7,112 7,149     1.32   1.32 1.32     301   301 303  
Sulphide Measured 3,823   3,823 3,823     0.82   0.82 0.82     101   101 101  
Total surface 10,936   10,935 10,972     1.14   1.14 1.14     402   402 404  
Grand total 114,986   97,564 109,217     0.69   0.79 0.79     2,542   2,468 2,777  
Copper Tonnes (kt)     Grade (%)     Gold (Mlb)  
Classification Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015  
Open pit
Measured 59,760   59,587 71,570   0.41   0.42 0.42   538   557 663  
Indicated 41,000   24,689 23,317   0.36   0.39 0.39   328   215 201  
Inferred 3,290   2,352 3,335     0.36   0.35 0.34     26   18 25  
Total open pit 104,050   86,629 98,222     0.39   0.41 0.41     892   790 889  
Surface
Measured 3,823   3,823 3,823     0.30   0.30 0.30     25   25 25  
Total surface 3,823   3,823 3,823     0.30   0.30 0.30     25   25 25  
Grand total 107,873   90,452 102,045     0.39   0.41 0.41     917   815 914  

Modifying factors

  • The Measured and Indicated Mineral Resources are inclusive of Mineral Reserves
  • Mineral Resources and Mineral Reserves are quoted as at 31 December 2017
  • Mineral Reserves are quoted in terms of RoM grades and tonnages as delivered to the metallurgical processing facility and are therefore fully diluted
  • Mineral Reserve statement includes only Measured and Indicated Mineral Resources, modified to produce Mineral Reserves and contained within the LoM plan
  • Mineral Resources and Mineral Reserves undergo internal audits during the year and any issues identified are rectified at the earliest opportunity - usually during the current reporting cycle
December  
  Units   2017   2016 2015  
Mineral Resource parameters
Mineral Resource gold price US$/oz   1,400   1,400 1,500  
Mineral Resource copper price US$/lb   3.2   3.2 3.5  
NSR for mill feed1 US$/t   14.75   16.59 17.34  
Au cut-off for oxide ore g/t   0.4   0.4 0.4  
Mineral Reserve parameters
Mineral Reserve gold price US$/oz   1,200   1,200 1,300  
Mineral Reserve copper price3 US$/lb   2.8   2.8 3.0  
NSR for mill feed2 US$/t   18   16.59-22.00 23.5-25.5  
Strip ratio (waste:ore) ratio   1.04   0.94 0.99  
Dilution open pit %   0   0 0  
MCF %   100   100 100  
Mining recovery factor (open pit) %   98   98 98  
NSR US$/t   14.75   16.59 17.47  
Plant recovery factor (Au) - Hypogene1,3 %   69   69 70  
Plant recovery factor (Cu) - Hypogene1,3 %   87   87 88  
Processing capacity Mtpa   6.9   6.8 6.7  
1 At December 2017 approximately 99% of remaining in-pit ore consists of hypogene material
2 Net smelter return (NSR) is defined as the return from sales of concentrates, expressed in US$/t, i.e. NSR = (Au price - Au selling cost) x Au grade x Au recovery + (Cu price - Cu selling cost) x Cu grade x Cu recovery. A variable NSR is applied to the LoM plan to optimise the NPV and FCF
3 For revenue estimation a forward Cu price of US$2.5/lb for 2018 and 2019, thereafter US$2.8/lb was utilised

Grade tonnage curve

Grade tonnage curves for sulphide Mineral Resources (open pit) are presented below.

  Grade tonnage curve (sulphides) – Surface
 
Mineral Reserves

The Mineral Reserve estimate for Cerro Corona is based on a suitably detailed and engineered LoM plan. All design and scheduling work is undertaken to an appropriate level of detail by experienced engineers using specialised mine planning software. The planning process incorporates relevant modifying factors and realistic production and processing rates supported by an NSR cut-off and other techno-economic investigations, including pit staging, geotechnical domain modelling and hydrogeological studies. Appropriate LoM sustaining capital is incorporated in the cash-flow model to underpin the Mineral Reserve. Low-grade stockpile material that is value accretive, is scheduled for treatment at the end of the LoM.

The 2017 operating results show the gold and copper head grades tracking marginally above the reported LoM reserve grade, which is a result of short to medium-term mining mix and ore blending to optimise the recovery of gold and copper.

Mineral Reserve classification

Gold Tonnes (kt)     Grade (g/t)     Gold (koz)  
Classification Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015  
Open pit                        
Proved 52,365   33,480 41,599 0.79   0.96 0.96 1,337   1,033 1,283
Probable 30,004   8,809 7,632     0.52   0.59 0.65     500   168 159  
Total open pit 82,369   42,289 49,231     0.69   0.88 0.91     1,837   1,201 1,442  
Surface          
Sulphide Measured 3,823   3,823 3,823     0.82   0.82 0.82     101   101 101  
Total surface 3,823   3,823 3,823     0.82   0.82 0.82     101   101 101  
Grand total 86,191   46,112 53,054     0.70   0.88 0.90     1,937   1,302 1,543  
Copper Tonnes (kt)     Grade (%)     Gold (Mlb)
Classification Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015     Dec 2017   Dec 2016 Dec 2015  
Open pit                          
Proved 52,365   33,480 41,599 0.43   0.48 0.48 493   351 436  
Probable 30,004   8,809 7,632     0.38   0.41 0.44     249   80 73  
Total open pit 82,369   42,289 49,231     0.41   0.46 0.47     742   431 509  
Surface
Measured 3,823   3,823 3,823     0.30   0.30 0.30     25   25 25  
Total surface 3,823   3,823 3,823     0.30   0.30 0.30     25   25 25  
Grand total 86,191   46,112 53,054     0.40   0.45 0.46     767   456 534  

Mineral Resource and Mineral Reserve reconciliation year-on-year

Factors that affected Mineral Resource reconciliation year-on-year Factors that affected Mineral Reserve reconciliation year-on-year

Mining depletion

 

Mining depletion

Geological and resource model updates

  

Impact of the updated resource block model
New geotechnical model and ramp width added 331koz gold and 166Mlbs copper   Increased capacity in current TSF through raising the wall to 3,803m amsl plus increased density of tailings placed
NSR cut-off strategy  

Effect of improved pit design parameters and in-pit tailings solution with improved resource to reserve conversion
    NSR cut-off strategy - minor adjustments at end of life

Mineral Resource reconciliation (Gold - koz)   Mineral Reserve reconciliation (Gold - koz)
Mineral Resource reconciliation (Gold - koz)   Mineral Reserve reconciliation (Gold - koz)
     
Mineral Resource reconciliation (Copper – Mlb)   Mineral Reserve reconciliation (Copper - Mlb)
 

Mineral Reserve sensitivity (gold - Moz; copper - Blb)

The Mineral Reserves are constrained predominantly by the TSF and WSF facilities and are therefore reasonably insensitive to changes in the metal price. Sensitivities are not based on detailed rerun depletion schedules and should be considered on a relative and indicative basis only.

Mineral Reserve sensitivity - Au (Moz); Cu (Blb)