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PROYECTO SAN JOSE

MINERÍA SUBTERRÁNEA

PROFESORES: Espinoza Noriega, Gianmarcell Bendezú y Boris

Mahaví Oviedo Loayza.

ALUMNOS:
20182342 -Ernesto Maldonado Esguerra
20140288 -Rodrigo Alonso Hurtado de Mendoza Negron
20150155- Raúl Gonzalo Alarco Sánchez
-Solange Guiuliana Rios Angulo
20182257-Kennet Wagner Osorio

PONTIFICIA UNIVERSIDAD CATÓLICA DEL PERÚ

FACULTAD DE CIENCIAS E INGENIERÍA
MAYO 4 DE 2018, LIMA-PERU
 ÍNDICE
GEOMECANICA

Mine Development and Mine Plan

The Huevos Verdes complex and the Frea vein are accessed via two separate declines from
surface. The Frea vein is currently being mined by the MCF (mechanized cut-and-fill)
method whereas portions of the HV vein are scheduled to be mined by the CF

Project No. 155720

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NI 43-101 TECHNICAL REPORT

(conventional cut-and-fill) method due to narrower vein widths than at Frea. It is anticipated
that the same mine design will be implemented for the Kospi deposit, once the
characteristics of the vein are better understood.
The mining plan provided by MSC for the Huevos Verdes and Frea veins is based on
minimum mining widths of 1.0 m for conventional cut-and-fill stopes and 1.5 m for
mechanized cut-and-fill stopes. A 1-boom jumbo is used for development and production
drilling in wider stopes (i.e. over 1.5 m); otherwise, hand-held drills (i.e. “stopers”) are used
for production drilling. Ore haulage to the ore passes is by scooptrams ranging from 1.5
yd3 to 4.0 yd3. Current haulage is performed by 20 t trucks via the ramp to surface where it is
transported directly from the mine to the processing plant.
Waste rock from development will be used for backfill in the cut-and-fill mining. Later in
the mine life, when a shortage of waste rock for backfill occurs, then borrow surface till will
be used for backfill.
Fresh air is distributed throughout the mine via a “pull” ventilation system, which uses one
fan per vein to pull the air into the mine through near-vertical raise-bored raises and the
declines.
According to the RMR classification system, both the HVN and HVS zones show Poor to
Fair quality rockmass designations and the Frea zone ranges from Fair to Good. The most
competent ground occurs in the ore body, then in the footwall, and finally in the hanging
wall. Ground conditions tend to improve with increasing depth below surface. Visual
assessment underground corroborates this statement. Bolts and wire mesh were observed
occasionally; however, no systematic bolting has been implemented underground. In
AMEC’s opinion, excavations where back span exceeds 3 m, and where the RMR value is
less than 50, should be systematically bolted using a minimum 1.8 m (effective length) bolt.
Connection to the national power grid was deemed non-feasible during the Feasibility Study
due to its inadequate and unreliable supply capacity. Consequently, electrical power is
provided by an on-site, diesel-fired power generating station. The power generating plant
 consists of four generators, each capable of providing 1,600 kW of power (at 50Hz). Under
normal operations, three generators provide approximately 4,800 kW, thus allowing one
generator on standby.
Production currently comes from the Frea (60%) and HVS (40%) veins at a rate of 750 t/d.
MSC is planning to increase daily throughput to 1,500 t/d.
An annual refining contract with Argor-Heraeus SA that is under negotiation will provide a
market for gold and silver produced from the San José property.

Geomechanical
Rockmass Classification
Detailed characterization of the rockmass in the mineralized zones is based on geotechnical
mapping of the underground workings, geotechnical logging of the available cores, and a
review of previous studies, which included review of geomechanical logs of the exploration
drilling. MSC is using the RMR system (Bienawski, 1989) to classify the rockmass into the
following structural domains:
• ore domain II (RMR>61)
• ore domain IIIa-IIIb (41<RMR<60)
• ore domain IIIb-IVa (31<RMR<50)
• hanging wall domain IIIa-IIIb (41<RMR<60)
• hanging wall domain IIIb (41<RMR<50)
• footwall domain IIIb (41<RMR<50)
• footwall domain IIIa (51<RMR<60).
According to the RMR classification system, both the HVN and HVS zones show Poor to
Fair quality rockmass and the Frea zone ranges from Fair to Good. The most competent
ground occurs in the ore body, then in the footwall, and finally in the hanging wall. Ground
conditions tend to improve with increasing depth below surface. AMEC´s visual assessment
underground in May 2007 corroborates this statement.
The main rocks associated with the Frea deposit are considered to be:
• the mineralized structure
• the andesite that hosts the ore body
• the sedimentary lithologies overlying the andesites
• the basalts overlying the sedimentary rock.
Basalts have a thickness that varies from 5 m to 50 m and the thickness of the sedimentary
lithologies varies from 8 m to 80 m.

Seismicity
Seismic activity in the project area is very low. A concentration of continental seismic
events are located between latitudes 30° and 35° south, which is several hundred kilometres
north of the project area. In general, the continental seismic activity decreases to the south
and almost disappears where the project is located.

Ground support
Underground workings at HVS and Frea were toured by AMEC. Bolts and wire mesh were
observed occasionally; however, no systematic bolting has been implemented

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 SANTA CRUZ PROVINCE, ARGENTINA
NI 43-101 TECHNICAL REPORT

underground. A review of ground support requirements using a graph developed for the Q
system (Barton, et al., 1977) shows that southern stopes at HVS and eastern stopes at HVN
are borderline cases for unsupported backs, having a Q value of 0.3 and an Equivalent
Dimension of 1 (De = Span/ESR = 3/3 = 1). A stability analysis using an empirical method
(Pakalnis) concludes that a 3 m span excavation is stable for RMR values exceeding 50. In
AMEC’s opinion, excavations where back span exceeds 3 m and where RMR value is less
than 50 should be systematically bolted using a minimum 1.8 m (effective length) bolt.

Ground support
Underground workings at HVS and Frea were toured by AMEC. Bolts and wire mesh were
observed occasionally; however, no systematic bolting has been implemented

SAN JOSÉ PROPERTY

SANTA CRUZ PROVINCE, ARGENTINA
NI 43-101 TECHNICAL REPORT

underground. A review of ground support requirements using a graph developed for the Q
system (Barton, et al., 1977) shows that southern stopes at HVS and eastern stopes at HVN
are borderline cases for unsupported backs, having a Q value of 0.3 and an Equivalent
Dimension of 1 (De = Span/ESR = 3/3 = 1). A stability analysis using an empirical method
(Pakalnis) concludes that a 3 m span excavation is stable for RMR values exceeding 50. In
AMEC’s opinion, excavations where back span exceeds 3 m and where RMR value is less
than 50 should be systematically bolted using a minimum 1.8 m (effective length) bolt.

19.1.2 Mining Method

Based on the characteristics of the orebodies (dips ranging from 55º at Frea to 70º at HV),
average width (from 0.6 m to 3 m) and rock mechanics properties of the ore and walls, cut-
and-fill mining methods were selected as the preferred mining method. At the time of the
site visit, production activities were ramping up with CF at HV and MCF at Frea. Most of
the production will come from blasting “uppers” (i.e. upholes), retreating up to 50 m along
strike in one blast, while a small portion of the tonnage will come from “breasting” (i.e.
tunnelling).
Stope access is by ramp, promoting high productivity, high equipment utilization and
providing flexibility to the operation.
Production will come from numerous mining fronts separated by 3 m thick sill pillars. Once
the sill cut is completed (i.e. initial cut), subsequent cuts are drilled off, mostly with upholes
(1.8 m for CF and 3.0 m for MCF) and blasting is retreated from one end of the stope to the
entry point, usually on 50 m strike-length increments. A schematic of the mining sequence is
displayed in Figure 19-1

}
Mine Development and Mine Plan
On 26 June 2007 MSC commenced pre-production at San José at a rate of 500 t/d.
Based on the current mineral reserves and a 750 t/d mining rate, mine life is estimated at
approximately nine years (ending in 2016). Production over the LOM will come from five
areas: HVS, HVC, HVN, Frea and Kospi. Initial production comes from the Frea (60%) and
HVS (40%) veins. MSC is planning to increase daily throughput to 1,500 t/d in the second
half of 2008; however this scenario has not been considered in this report.
The HV complex, Frea and Kospi veins are accessed via separate declines from surface. At
the time of the visit, the Kospi decline was advanced down over 100 m; ground conditions
were adverse and MSC had to install steel arches to prevent subsidence of the back and
walls. MSC anticipates ground conditions to improve at depth. The Frea vein is currently
being mined by the MCF (mechanized cut-and-fill) method whereas most of the HV vein is
being mined by the CF (conventional cut-and-fill) method due to narrower vein widths than
at Frea. It is anticipated that MCF will be implemented for the Kospi deposit, once the
characteristics of the vein are better understood.

Project No. 155720

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NI 43-101 TECHNICAL REPORT

A 1-boom jumbo is used for development and production drilling in wider stopes (i.e. over
1.5 m); otherwise, hand-held drills (i.e. “stopers”) are used for production drilling. Ore
haulage to the ore passes is by scooptrams ranging from 1.5 yd 3 to 4.0 yd3. Current haulage
is performed by trucks via the ramp to surface. Transportation of the ore from the mine is
via 20 t capacity fixed-body surface-type dump trucks hauling directly from the mine to the
processing plant.
Waste rock from development will be used for backfill in the cut-and-fill mining. Later in
the mine life, when a shortage of waste rock for backfill occurs, then borrow surface till will
be used for backfill.
Fresh air is distributed throughout the mine via a “pull” ventilation system, which uses one
fan per vein to pull the air into the mine through near-vertical raise-bored raises and the
declines.
According to the RMR classification system, both the HVN and HVS zones show Poor to
Fair quality rockmass and the Frea zone ranges from Fair to Good. The most competent
ground occurs in the ore body, then in the footwall, and finally in the hanging wall. Ground
conditions tend to improve with increasing depth below surface. Visual assessment
underground corroborates this statement. Bolts and wire mesh were observed occasionally;
however, no systematic bolting has been implemented underground. In AMEC’s opinion,
excavations where back span exceeds 3 m, and where the RMR value is less than 50, should
be systematically bolted using a minimum 1.8 m (effective length) bolt.
Connection to the national power grid was deemed non-feasible during the Feasibility Study
due to its inadequate and unreliable supply capacity. Consequently, electrical power is
provided by an on-site, diesel-fired power generating station. The power generating plant
consists of four generators, each capable of providing 1,600 kW of power (at 50Hz). Under
normal operations, three generators provide approximately 4,800 kW, thus allowing one
generator on standby.
 An annual refining contract with Argor-Heraeus SA that is under negotiation will provide a
market for gold and silver produced from the San José property.

Mining
AMEC recommends the following:
• Implement a more transparent process for conversion of Mineral Resource to Mineral Reserves,
specifying category, dilution and mining recovery parameters used by stope.
• Update the economic assessment before Year 9 to confirm the ramp-down period and the end of
mining at the San José property.
• Assess mining method alternatives for the recovery of sill pillars, which will likely encounter
adverse ground conditions.
• Evaluate the operating cost savings that will be generated by connecting to the power and the
associated capital expenditures.
• Ensure all permits or authorizations have been received and that a detailed mine plan incorporating
schedule and costs are completed prior to increasing the production throughput from 750 t/d to
1,500 t/d.
• Excavations where back span exceeds 3 m and where RMR value is less than 50 should be
systematically bolted using a minimum 1.8 m (effective length) bolt.

https://www.sec.gov/Archives/edgar/data/1030219/0001193125
08071349/dex999.htm