Guanaco – Amancaya

Guanaco is located approximately 220km SE of Antofagasta in Northern Chile at an elevation of 2,700masl and 45km east of the Pan American Highway. The trip from Antofagasta takes about three hours. The climate is typical Atacama Desert, with little or no rainfall, and a resulting absence of practically any form of vegetation.

Guanaco is located in the Paleocene/Eocene belt, a structural trend which runs north/south through the center of North of Chile, and hosts several large gold and copper mining operations.

The alteration pattern and the mineralogical composition of the Guanaco mineralization have led to the classification as a high-sulphidation epithermal deposit.

The Guanaco mine was recommissioned by Austral Gold in 2010 and commenced operations in 2011.

The Amancaya project was acquired by the Company in 2014 from Yamana, who retain a 2.25% royalty over precious metal production. It is 75km south-west of Guanaco mine by public road. The Company started open-pit mining operations in March 2017, and ore is transported to the agitation leach plant at Guanaco for processing.

The Amancaya mine represents a low sulphidation gold-silver epithermal deposit hosted in the Depression Central; a Paleocene-Eocene volcanic belt that host numerous epithermal deposits in northern Chile. The critical features that define the mineralization at Amancaya include lithological and structural controls.

The Paleocene intermediate volcanic belong to the Chile-Alemania Formation, and are divided into two sections. The Lower Section comprises andesitic lavas and thick pyroclastic deposits that host most of epithermal veins. The Upper Section was developed over a district-scale unconformity and is dominated by andesitic to dacitic lava flows and subvolcanic stocks that were interpreted as post-mineral units.

Mining Rate Guanaco underground: 1000-1100 tpd
Mining Rate Amancaya: 400-500 tpd
Processing: 1500 tpd crushing circuit to agitation leaching and Merril-Crowe processing plant.
Annual Production (2013-16): 45-51,000 oz p.fa.
Average Cash Cost (2013-16): $683/ oz Au Eq.
Average All-in Sustaining Cost (2013-16): $753/oz Au Eq

Gold mineralization at Guanaco is controlled by pervasively silicified, E/NE trending sub-vertical zones with related hydrothermal breccias. Silicification grades outward into advanced argillic alteration and further into zones with propylitic alteration. The deposit is classified as a high sulphidation epithermal system. The weathering profile is very deep, with all ore production being oxidized material.
Mineralization is structurally controlled with some lithological controls over higher grade mineralization seen at the Cachinalito and Dumbo vein system.

The Amancaya project represents a low sulphidation gold-silver epithermal deposit hosted in the Depression Central; a Paleocene-Eocene volcanic belt that host numerous epithermal deposits in northern Chile. Mining operations are currently focused on the Central vein, a N-S striking vein. The Central Vein exhibits banded textures, with bands of grey chalcedony, clear crystalline quartz, amethyst, and dark bands containing sphalerite, silver, and lead. Other textures include colloform, sinuous alternating bands of chalcedony and amethyst, and crustiform quartz. Interstices are filled with clays, limonite, manganese oxides, and carbonates (ankerite mainly). Supergene enrichment of silver in the oxide zone is exhibited.

Dozens of mineralized veins have been exploited in the district, the most important veins being the Defensa, Perseverancia, Abundancia, San Lorenzo and Dumbo.
Current operations are all underground with typical mining width of 2-6 meters. Production stopes within ore shoots utilize open sub-level stopping methodology.

The project has had no historical mining, despite outcropping at surface. The open-pit mine at Amancaya is carried out as a conventional operation using 30t trucks and a combination of excavators and front-end loaders. Waste and ore is blasted and mined separately using a “trenching” method to reduce the amount of dilution.

Ore from Guanaco and Amancaya is treated at the Company’s new plant at Guanaco (Figure 1). Ore trucked from Amancaya is batched through the plant due to its higher silver content.
Ore is passed through a three stage crushing process, prior to entering the 1500 tpd agitation leach plant. Pregnant solution is passed into a Merrill-Crowe circuit where gold and silver are extracted and a gold and silver doré is produced.