Bolivia
The Amayapamapa Project
The Amayapampa Gold Project is located 380 km southeast of La Paz, on the Altiplano of south eastern Bolivia, at an elevation of 4,100 metres. Mineralisation at the project is as free gold in association with pyrite, in a structural envelope of sheared quartz veins in black argillites with quartzite and siltstone interbeds. The measured and indicated resources totalling 27.1 million tonnes grading 1.13 g/t Au (at 0.40 g/t cutoff) results in a total 990,000 ounces representing an increase of 48% from 2007 resources. These gold resources were delineated by over 20,000m of RC and diamond core drilling, surface trench, shaft and underground channels. The Company is working on the final stages of an updated Definitive Feasibility Study (“DFS”) for development of this advanced gold project.
When the Company purchased Amayapampa, it had measured, indicated and mainly inferred Mineral Resources estimated, totalling 720,000 ounces of gold. These resource figures were estimated at a cut-off grade of 0.4 g/t Au.
A major upgrade of the total Mineral Resources at the Amayapampa Gold Project was estimated in February 2010, upgrading the Amayapampa total measured, indicated and inferred categories from 1,084,000 ounces to 1,294,000 ounces. This is an increase of 19.4%. Of these new Mineral Resources, 77% are in the high quality measured and indicated categories that are used for ore reserve mining estimations. This figure makes allowance for previous mining deductions and is at a cut-off grade of 0.4 g/t Au. The Company believes that these Mineral Resources still have significant potential for expansion. The Project also has significant potential for the discovery of the antimony mineral, stibnite. Amayapampa has been extensively drilled and the narrow historic underground workings have also been sampled.The new geological block model has reinforced the Company’s confidence in some very deep and high grade analysis results. Previously these had been eliminated from the mineral resource estimate. The inclusion of these results offers the potential to lead to a deeper open pit scenario or an underground mine. The new geological block model has improved the confidence levels of mineralisation along various margins of the model, meaning that these zones can now be taken into account in ore reserve calculations.
Internal Company pit optimisation studies using the previous geological block model indicated that at a gold price of US$825 per ounce and using the previous but lower metallurgical recoveries, a substantial portion of the old mineral resource of 1,084,000 ounces had the potential to be mined. The significant increase in the Measured and Indicated mineral resource to 990,000 ounces, higher metallurgical recoveries due to recently completed testwork and the higher gold price regime, bodes very well as the Company advances towards a significant ore reserve estimate at Amayapampa.
Drilling
A drilling programme of 2,241 metres was undertaken in 2008. This drilling is in addition to the extensive drilling carried out by previous companies, such as 4,660 metres of diamond core drilling in 20 holes and 5,697 metres of RC drilling in 55 holes in the mid-1990s by Da Capo Resources. Vista Gold Corp drilling amounted to 4,747 metres of diamond core drilling in 26 holes and 7,575 metres of RC drilling in 41 holes. In addition there has been 5,400 metres of systematic underground channel sampling performed. During 2009, the addition of new data to the database comprises 1,229 diamond core samples, 1,224 surface trench samples and 1,114 surface shaft samples
Geology
As Amayapampa is in an identical geological setting as the deposits of the Company’s Hodgkinson Basin project area and in Central Victoria, the Company considers that the Altiplano region of Bolivia has strong economic potential. Post commissioning of the Amayapampa Project Republic will actively seek other projects in Bolivia to utilise its knowledge and understanding of the geology of the region.
Social Considerations
The Bolivian senior employees of Minera Nueva Vista S.A. have significantly advanced social issues with the commencement of a training programme for the villagers at Amayapampa. A total of 280 people are employed under this programme, giving many of them a guaranteed income in safe working conditions. The programme is designed to give the villagers literacy and numeracy skills and then train them for mine operations roles. The Company has also met with Bolivia’s Minister for Mining and Metallurgy, who assured the Company that Western investment in the mining sector in Bolivia was very welcome and very safe.
During 2009, the Company has received considerable assistance from the Bolivian Mining Ministry, and in particular from the Vice Minister of Mines, Senor Eugenio Mendoza, culminating in Senor Mendoza’s visit to the Project in March to view progress and meet with local authorities. The Vice Minister has put in place a programme of “socialisation” for the Project, which means that he will ensure that all of the communities in the project area are fully informed about the project. This is being done in consultation with the Ministry of Government, the Prefectura’s Office of the Department of Potosi, the Chayanta Municipal Council (the local council that covers the project), the Federation of Indigenous Authorities for the North of Potosi and local government and native authorities from a number of villages and native authority areas. To show his faith in the Project, Senor Mendoza visited the Project on 20/21 March2009 and met with many community leaders and authorities. The successful conclusion of this process will result in the Company being granted its “social licence” to operate the Project.
The Morales Government recently appointed Senor Jose Pimentel as Minister for Mining and Metallurgy. Minister Pimentel was a Congressman in the previous Morales Government representing the city of Llallagua and surrounds, a very short distance from the Project. The Company is looking forward to working with Minister Pimentel on the development of Amayapampa and in bringing significant economic and social benefits to the region of the North of Potosi, in which Amayapampa and Llallagua are located.
Environment
In mid 2007 a new Environmental Permit for the mine was granted. The Company met with the Prefecto of the Department of Potosi (equal to a State Premier in Australia) and his Mining and Environmental Advisors who were all responsible for guiding this Permit through the Potosi permitting system.Work Required to Progress the Amayapampa Project
Republic has previously advised the market that the Company anticipated the BFS for Amayapampa would be completed by the end of March 2010. The revised timetable for the completion of the BFS is now June/July 2010. Much of the Definitive Feasibility Study has been completed previously with the following work still necessary to complete a Definitive Feasibility Study for Amayapampa, in order that financing for the Project can be sought: -
- Continue the workers’ training programme
- Review the geological block model constructed by the Company
- Finalise pit optimisation and mine scheduling work
- Complete a study on the new tailings dam
- Update the operating and capital costs for the project
- Gain a sign-off on the study by an independent consulting firm
- Finalise issues of increased throughput to 2.7M tpa with the metallurgical processing route and plant design