Contonga is a project of rehabilitation and preparation of mine and plant, on the last stages, whose description is as follows

Location

The Contonga project is located in San Marcos district, Huari province, Ancash region to 470 Km in a straight line at Nor East of Lima and 10 Km. at North of Antamina.

ACCESS

The access from Lima is made by asphalt road of 526 Km, plus 8 Km. of  road surfacing, in 8 hours of total time.

PROPERTY

Nowadays, the Contonga project is integrated for 15 miner concessions, which the company is registered titrate of the next 11 concessions that sum a total of 948.22 Ha. Which were transferred by Sociedad Minera Gran Bretaņa liquidator, from now on (“SMGB”), in favor of the company: Contonga Nē 1, Contonga Nē2, Contonga Nē3, Contonga Nē4, Contonga Nē5, Contonga Nē6, Delicias, La Florida, La Inmaculada, Prosperidad and Prosperidad Numero Dos.

Additionally, the company acquires from third party and own solicitude, the titration of the following four (04) miner concessions: Flor de Contonga Uno, Contonga trece, Contonga 15 and Contonga 16, that sum a total of 601.77 Ha.

By last to nowadays is in transaction before General Direction of Mining of Energy and Mine Ministry the concession of benefit to operate the concentrate plant of Contonga, with a capacity of 600 ton/day.

GEOLOGY

In Contonga area outcrop sedimentary rocks, intrusive and volcanic. The sedimentary rocks are represented by clastic formations from Goyar group, over lie to this limestones, limolites, shale from Chulec formation, limestone from Pariatambo formation, lodolites limestone and greywacke from Jumasha formation, topping out the stratigraphic sequence, outcrop limestone and marl from Celendin formation.

The intrusive rocks cuts the sedimentary sequences, outcrops like “stocks” in the Contonga sector ( Stock Contonga ) and at south of this you can distinguish the Stock Taully. The composition of intrusives is represented by quartz and feldspar, whom takes characteristics of porphyry; besides inside intrusive has been recognized porphyry monzonite and some dikes felsitic of dacite.

The alteration – mineralization is related to intrusives which cuts the sedimentary sequences and principally on the contacts with limestone Jumasha and the Contonga Stock have produced Skarn and massive replacement of sulphides in carbonate, surrounding the intrusive and like mantle controlled by faultage along the stratums. Besides it can distinguish a circular structure around Stock Contonga, that shows zones brecciated cemented with sulphides.

The mineralization in Skarn presents gross grains of sphalerite ( marmatita ), galena (lead ore), pyrite, chalcopyrite and occasionally tetrahedrite (ore of silver and cooper). The first ones increases in depth, also observed pyrrhotite. Bismuthinite has been reported by SMGB, enterprise who exploited Contonga in the past.

Structures mantle kind, place it following the course of stratums Jumasha and Pariatambo. The mentioned structures named “A” (Pariatambo Formation), structures “B” and “C” (Jumasha Formation). In the present knowledge, the most important of them is the “B”, presents interesting values of Ag, Pb, Cu and Zn.

 PROJECT ANTECEDENTS

Historically Contonga is a project that has been explored systematically since their beginnings until today as is described lines below.

SMGB operated a concentrate plant with a capacity of 400 ton/day since 1984 to 1990, have produced like 420,000 ton. With head laws of 5% Zn, 1.94% Pb, 0.35% Cu and 3.25 Oz/TM Ag. Miner working and exploration works has been realized as much in Contonga Stock like in the structure “B”. From 1985 to 1990, SMGB made an miner operation, have extracted 420,000 ton. Of mineral, proceeding from 4 levels of exploitation; from lower to higher N 240, N 300, N 360, N 415 (approximately 7 Km. of underground mine work).

After a 10 years shut down, in 1999, CEDIMIN in a Joint Venture with Anglo American restarting complete studies of exploration in all the mine area and surroundings, the results to Anglo Americana were not the  expected because the reduce volume of the resources that adjust it more to a middle mining, withdraw at the end of 2000.

When Anglo America withdraw, CEDIMIN take control until end of 2001. BHL del Peru S.A.C signs a buy option of Contonga rights, this is practiced by the company on December 2003.

EXPLORATION AND DEVELOPMENT PROGRAM

During the SMGB administration has developed more than 7 Km. Of  underground mine working which had to add 11  diamantine perforation drills with a total of  3,800 mt.

In year 2000, CEDIMIN and Anglo American developed a profuse program of exploration that comprised superficial maps, geochemistry, geophysics, and  diamantine perforation of 5 drills, totalizing 1,900 mt.

In year 2001, CEDIMIN realized diamantine perforation of 15 drills, totalizing 2,900mt., perforated since level 240, principally to explore the compartment in depth of contact from Contonga Stock, until a maximum of 280 mt below the mentioned level, also a few drills were directed to explore in depth the structre “B”.

In year 2004, the company developed an additional  program of diamantine perforation, from level 240 (11 drills with 1,156.40 mt).

Until march 2005, the company has drilled 3 depth drill holes, below level 240.

Is important to say that the exploitation program  since 2005 to 2009 also includes the execution of about 4,000 mt of diamantine perforations like annual average. This explorations allowed that the indicated and inferred resources increase. Is not possible to say which would be this increment because the RC of resources by diamantine perforations is not reported.

MINERAL RESERVES AND RESOURCES

See our page of Reserves & Resources. Click Here (only in Spanish)

MINE

The exploitation method selected of cut and filling ascending, is the indicated for this kind of layer, so that must culminate the proposal ramp so that the preparation labour

In the perforation will be used Jack Leg perforators for the sub-vertical drilling in zones with less than 3 mt of power and breasting in zones with more than 3 mt of power. For the blasting will use dynamite and detonator as indicator and Anfo like main explosive. The mineral cleaning or deads .in the excavation  and its transportation to the ore pass and the waste pass will be made by scoops through the access windows to the excavation.

The proposal method is apparent to guarantee the daily production of 600 TM/day, in opinion of the expert, it must be prepare and have operational at least 7 excavations; 6 will guarantee the daily production and the last one fits to cover the contingency of paralyse the operation of any excavation for stability problems or lack of equipment etc.

 The presence of water filtrations in some excavations will make that the boxes median competent and incompetent originate an insecure condition, must use in this cases support with casing squares and/or split set or cement bolts with net and eventually shotCrete that will make slower the excavation production.

 PLANT

See FlowSheet

The principal characteristics of the process will be:

Gross hopper with 350 Ton capacity of 9” of light, a plate feeder, a stationary screen, a primary jaw crusher of 15” x 24” and a secondary cone crusher of 3” diameter with their respective shaking screen that works in closed circuit. To get a ž product that is stored in a 400 Ton capacity hopper.

The milling circuit consists of a ball mill of 8” x 8”, that operates on a open circuit and for the re-milling a 5” x 8” mill that operates in closed circuit with a 5” x 4” pump and cyclones of 10”, the produced fines are feed to flotation.

The flotation will be composed by 2 circuit, the lead-cooper  circuit that is constituted  for 2 unitary cells of 6” x 6” and 12 cells of  36” x 36”, the concentrates from the conditioner and the first 3 cells (cleaning), are conducted to a thickener of 20” diameter x 10” height and the obtained concentrate represents 80 to 85 % recovery of Pb-Ag mineral, the tailing from this circuit constitutes the head of Zinc circuit.

The Zinc circuit will be composed by a 8´x 9´ conditioner that works as a unitary cell, the concentrate is conducted to a thickener of 30” x 10” and obtain the Zinc concentrate, the tailing from the conditioner goes to 12 cells bank of 43” x 43” and the concentrate process continues with cleaning cells, the concentrate is sent to the thickener previously mentioned, the tailing is conducted to a tailings field.

The Pb and Zn concentrates will be filter and dispatch in bulk.

The new tailings deposit will be the Tucush small valley, the field will be lined with geo membrane, it will be used the central line method with gross separation  which will be pumped like hydraulic fill to the mine, the settling waters are conducted to 2 treatment wells to be recirculated  to the concentrating plant. The capacity of the tailings deposit is 1.3 millions Tons, and an approximate life of  5 years to 600 Tons/day production.

It considers that from 600 Tons/day that will be treated as tailings, the 87.1%, means 522 Tons or 177 cubic meters approximately , which returns to the mine as hydraulic fill, the 45% remains in the tailings 97.3 cubic meters/day.

The energy consumption will be of 1300Kw, which can obtain in the future from the red connected to the Interconnected National System.

In plant it has a water reservoir from the Contonga Lagoon with 700 cubic meters.

The concentrating plant has an standard flow sheet and in expert opinions is well conception. The metallurgic balance that reports is made in basis to tests made in TECSUP.

The average recovery reported in the inform Planning 2005 are as follows: to Zn 92.36%, to Pb 90.54%, to Ag 85.98%, and to Cu 42.02%. in the Company Business Plan has used the next recoveries: to Zn 91.1%, to Pb 91.03%, to Ag 82.09% and to Cu 55.76%

With respect to the laws in the concentrates, the average obtained from the metallurgic tests in TECSUP, reported in Planning 2005 are: in Zn concentrate the law is 58.27%, in Pb concentrate the law is 58.0%, and Ag is 76.01 OzAg/Ton and in the Cu concentrate the law are Cu 27.05% and 19 OzAg/Ton. The recoveries  has been ratified  in the pilot test made recently.

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