Chihuahua State, Northern Mexico
Pinos Altos is located in the mountainous region of northern Mexico, 220 km west of Chihuahua. It is an open-pit and underground mining operation containing substantial reserves of gold and silver. The nearby Creston Mascota deposit is a satellite stand-alone pit and heap leach operation of Pinos Altos.
Open Pit and Underground
2016 production and costs
Production - 192,772 oz gold
Production costs - $594/oz gold
Total cash costs - $356/oz gold
Production - 47,296 oz gold
Production costs - $578/oz gold
Total cash costs - $516/oz gold
Pinos Altos has proven and probable reserves containing 1.4 million ounces of gold and 38.1 million ounces of silver (17 million tonnes grading 2.55 g/t gold and 68.15 g/t silver) as of December 31, 2016. In addition, Creston Mascota has proven and probable reserves containing 102,000 ounces of gold and 909,000 ounces of silver (2.5 million tonnes grading 1.28 g/t gold and 11.35 g/t silver). Pinos Altos is expected to produce 170,000 ounces of gold in 2017, and to average 175,000 ounces of gold per year from 2018 to 2019. Creston Mascota is expected to pour 40,000 ounces of gold in 2017, 30,000 ounces of gold in 2018, and 5,000 ounces of gold in 2019 when it is expected to complete operations.
Pinos Altos lies in the Sierra Madre gold belt, on the northeast margin of the Ocampo Caldera, which hosts many epithermal gold-silver occurrences. The property is underlain by volcanic and intrusive rocks disturbed by faulting. Its geological focus is a horst structure – which is an uplifted block of rocks – at least 10 km long by 3 km wide, defined by the Reyna de Plata Fault to the north and the Santo Niño Fault to the south.
The property’s mineral reserves are in four zones hosted by the Santo Niño Fault – the El Apache, Oberon de Weber, Santo Niño and Cerro Colorado lenses – as well as the San Eligio lens 600 metres north of the fault. More than 55% of the current Pinos Altos mineral reserve is located in the steeply dipping Santo Niño vein zone, which is up to 40 metres thick and 2.5 km long. Other promising zones include the Reyna de Plata and Sinter Zones, Creston Mascota, and the Cubiro deposit, which is 2 km west of Creston Mascota.
Pinos Altos is a series of open pits and an underground mine along the Santo Niño Fault. Surface mining is carried out at the Santo Niño and San Eligio pits, and, in future, the El Apache pit. Mining is by conventional open pit methods, using shovels and trucks to remove about 5 million tonnes of ore and waste in 2016, and about 2 million tonnes of ore and waste per year in future years. The underground mining method is sub-level stoping (paste backfill) to extract ore from the Santo Niño and Cerro Colorado deposits. The shaft project for hoisting underground ore was completed in mid-June 2016, with ramp-up to the design capacity of 6,000 tonnes of ore per day completed in July.
Creston Mascota is an open-pit, heap-leach facility. It mines an average of 5,500 tonnes of ore/day and employs the same surface mining method as Pinos Altos.
Ore from the Pinos Altos mine is treated by two different processes – conventional processing, as well as the lower grade ore through heap-leaching. The conventional, 5,500-tonne/day process plant includes crushing, grinding, gravity concentration and agitated leaching followed by counter-current decantation. Gold and silver are recovered using the Merrill-Crowe method, and a refinery produces gold/silver doré bars on site. Metals recovery in the plant are expected to average 93% for gold and 43% for silver over the remaining life of the mine. The Company has approved for construction a flotation plant for the leaching of tailings, which is expected to increase silver recovery resulting in approximately 50,000/month additional ounces of silver. The lower grade Pinos Altos ore is treated in a heap-leach system designed to accommodate 5.6 million tonnes of material over the life of the mine. The heap leach facility is expected to contribute about 1% of the total metal production over the remaining life of Pinos Altos mine.
All the Creston Mascota ore is processed using heap-leaching. Its 4,000-tonne- per-day heap leach facility is similar to the Pinos Altos facility, but the precious metals are recovered by a small carbon adsorption circuit.
We continue to evaluate the sequencing of additional satellite zones, which could provide additional ore to the Pinos Altos complex. Drilling data is being incorporated into preliminary studies along with metallurgical testing and geotechnical data in order to better optimize the development potential of remaining satellite resources including Sinter and Bravo. In 2016, exploration at the Cerro Colorado Zone outlined additional mineralization on the boundaries of the zone. Further drilling will be carried out in 2017 to evaluate this potential. In 2017, the Company expects to spend $6.1 million on 34,000 metres of exploration drilling and $0.5 million on 2,000 metres of conversion drilling at Pinos Altos including Creston Mascota and Madrono.
Agnico Eagle has undertaken a first campaign of drilling on the recently acquired Madrono prospect surrounded by the Pinos Altos mine property, and just 0.5 km from the Creston Mascota pit and the Bravo Zone. Previous mining in this area included small-scale bonanza production from underground mine development on three levels in the 1930s. Mapping and sampling of historical mine workings quickly identified high-potential targets. The Madrono prospect includes at least three gold-silver veins: Madrono, Santa Martha and La Curva.
Exploration drilling in 2016 yielded favourable results from the Bravo and Madrono zones. The Company believes that these two zones could potentially extend the life of the Creston Mascota heap leach facility. In addition, the Company believes that the Bravo, Madrono and Cubiro zones may have higher grade areas that could potentially provide additional feed to the Pinos Altos mill. Additional drilling is planned for 2017.