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IMPORTANT NOTICEThis report was prepared exclusively for Minera Panamá, S.A. (MPSA)by AMEC Americas Limited (AMEC). The qu...
MINERA PANAMA, S.A.                                                                                        MINA DE COBRE P...
MINERA PANAMA, S.A.                                                                                         MINA DE COBRE ...
MINERA PANAMA, S.A.                                                                                               MINA DE ...
MINERA PANAMA, S.A.                                                                        MINA DE COBRE PANAMÁ PROJECT   ...
MINERA PANAMA, S.A.                                                                          MINA DE COBRE PANAMÁ PROJECT ...
MINERA PANAMA, S.A.                                                                 MINA DE COBRE PANAMÁ PROJECT          ...
MINERA PANAMA, S.A.                                                                              MINA DE COBRE PANAMÁ PROJ...
MINERA PANAMA, S.A.                                                                                   MINA DE COBRE PANAMÁ...
MINERA PANAMA, S.A.                                                                        MINA DE COBRE PANAMÁ PROJECT   ...
MINERA PANAMA, S.A.                                                                         MINA DE COBRE PANAMÁ PROJECT  ...
MINERA PANAMA, S.A.                                                                       MINA DE COBRE PANAMÁ PROJECT    ...
MINERA PANAMA, S.A.                                                                         MINA DE COBRE PANAMÁ PROJECT  ...
MINERA PANAMA, S.A.                                                                      MINA DE COBRE PANAMÁ PROJECT     ...
MINERA PANAMA, S.A.                                                                    MINA DE COBRE PANAMÁ PROJECT       ...
MINERA PANAMA, S.A.                                                                          MINA DE COBRE PANAMÁ PROJECT ...
MINERA PANAMA, S.A.                                                                                                 MINA D...
MINERA PANAMA, S.A.                                                                                     MINA DE COBRE PANA...
MINERA PANAMA, S.A.                                                                                        MINA DE COBRE P...
MINERA PANAMA, S.A.                                                                              MINA DE COBRE PANAMÁ PROJ...
MINERA PANAMA, S.A.                                                                           MINA DE COBRE PANAMÁ PROJECT...
MINERA PANAMA, S.A.                                                                           MINA DE COBRE PANAMÁ PROJECT...
MINERA PANAMA, S.A.                                                                       MINA DE COBRE PANAMÁ PROJECT    ...
MINERA PANAMA, S.A.                                                                         MINA DE COBRE PANAMÁ PROJECT  ...
MINERA PANAMA, S.A.                                                                                                       ...
MINERA PANAMA, S.A.                                                                        MINA DE COBRE PANAMÁ PROJECT   ...
MINERA PANAMA, S.A.                                                                            MINA DE COBRE PANAMÁ PROJEC...
MINERA PANAMA, S.A.                                                  MINA DE COBRE PANAMÁ PROJECT                         ...
MINERA PANAMA, S.A.                                                              MINA DE COBRE PANAMÁ PROJECT             ...
MINERA PANAMA, S.A.                                                                    MINA DE COBRE PANAMÁ PROJECT       ...
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
2010 Feed Study - Cobre Panama Project
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Transcript of "2010 Feed Study - Cobre Panama Project"

  1. 1. IMPORTANT NOTICEThis report was prepared exclusively for Minera Panamá, S.A. (MPSA)by AMEC Americas Limited (AMEC). The quality of information,conclusions and estimates contained herein is consistent with the levelof effort involved in AMEC’s services and based on: i) informationavailable at the time of preparation, ii) data supplied by outsidesources and iii) the assumptions, conditions and qualifications set forthin this report. This report is intended to be used by MPSA only, subjectto the terms and conditions of its contract with AMEC. Any other useof this report by any third party is at that party’s sole risk.
  2. 2. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARYCONTENTS1.0 INTRODUCTION ...................................................................................................... 1-1 1.1 Purpose and Objective of the FEED Report ................................................. 1-1 1.2 Terms of Reference ...................................................................................... 1-1 1.3 Scope of Facilities ........................................................................................ 1-2 1.4 Production Summary .................................................................................... 1-4 1.5 Project Background and History ................................................................... 1-5 1.6 Property Description and Location ............................................................... 1-6 1.7 Legal Status.................................................................................................. 1-62.0 TECHNICAL SUMMARY.......................................................................................... 2-1 2.1 Geology ........................................................................................................ 2-1 2.2 Mining ........................................................................................................... 2-4 2.3 Metallurgy ..................................................................................................... 2-7 2.4 Waste and Water Management .................................................................... 2-8 2.5 Process Plant ............................................................................................. 2-10 2.5.1 Plant Site Location .......................................................................... 2-10 2.5.2 Process Description ........................................................................ 2-12 2.5.3 Tailings Disposal ............................................................................. 2-14 2.5.4 Port Site Process Facilities ............................................................. 2-15 2.6 Infrastructure/Ancillary Facilities ................................................................. 2-15 2.6.1 Mine/Plant Site ................................................................................ 2-19 2.6.2 Eastern Infrastructure Area ............................................................. 2-19 2.6.3 Port Site Infrastructure .................................................................... 2-20 2.6.3.1 On-Shore Facilities............................................................ 2-20 2.6.3.2 Marine Facilities ................................................................ 2-20 2.6.4 Security Buildings ........................................................................... 2-21 2.6.5 On-Site Roads ................................................................................ 2-21 2.6.6 Access Roads to Site ...................................................................... 2-21 2.6.7 Other Services and Facilities .......................................................... 2-22 2.6.7.1 Water Supply..................................................................... 2-22 2.6.7.2 Power Supply .................................................................... 2-23 2.6.7.3 Pipeline Systems............................................................... 2-23 2.6.7.4 Diesel Storage................................................................... 2-24 2.6.7.5 Solid Waste Management ................................................. 2-24 2.6.7.6 Sewage Treatment ............................................................ 2-24 2.6.7.7 Communications Services................................................. 2-25 2.7 Power Generating Plant ............................................................................. 2-253.0 SOCIAL AND ENVIRONMENTAL IMPACT ASSESSMENT ................................... 3-1 3.1 Sustainability Objectives ............................................................................... 3-1 3.2 The ESIA ...................................................................................................... 3-1Project No.: 155529 TOC iMarch 2010
  3. 3. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY 3.3 Stakeholder Consultations and Engagement ............................................... 3-2 3.4 Baseline Studies ........................................................................................... 3-2 3.4.1 Scope of Studies ............................................................................... 3-2 3.4.2 Existing Environmental Conditions ................................................... 3-2 3.4.3 Existing Socioeconomic Conditions .................................................. 3-2 3.5 Impact Assessment ...................................................................................... 3-3 3.5.1 Valued Ecosystem Components ....................................................... 3-3 3.5.2 Potential Environmental Impacts ...................................................... 3-3 3.5.3 Potential Socioeconomic Effects ...................................................... 3-3 3.5.4 Measures to Limit/Mitigate Project Impacts ...................................... 3-4 3.5.5 Residual Impacts and Mitigation ....................................................... 3-44.0 MARKETING AND MARINE TRANSPORT OF CONCENTRATE ........................... 4-1 4.1 Concentrate Production ................................................................................ 4-1 4.2 Copper Concentrate ..................................................................................... 4-1 4.3 Molybdenum Concentrate ............................................................................ 4-25.0 PROJECT EXECUTION........................................................................................... 5-1 5.1 Project Delivery ............................................................................................ 5-1 5.2 Engineering and Procurement ...................................................................... 5-2 5.3 Access and Transportation ........................................................................... 5-3 5.4 Safety, Environmental, and Community Affairs (SECA) Program ................ 5-3 5.5 Scheduling Considerations ........................................................................... 5-4 5.6 Temporary Infrastructure .............................................................................. 5-5 5.7 Construction Workforce ................................................................................ 5-6 5.8 Security......................................................................................................... 5-66.0 LOGISTICS .............................................................................................................. 6-1 6.1 Introduction ................................................................................................... 6-1 6.2 Inbound Freight Volumes ............................................................................. 6-1 6.3 Ocean Transport........................................................................................... 6-3 6.3.1 Ports in Panamá ............................................................................... 6-3 6.3.2 Colón Marshalling Yard .................................................................... 6-3 6.3.3 Barging and Crew Supply Vessel ..................................................... 6-3 6.3.4 Punta Rincón .................................................................................... 6-3 6.4 Road Transport............................................................................................. 6-47.0 CAPITAL COST ESTIMATE .................................................................................... 7-18.0 OPERATING COST ESTIMATE .............................................................................. 8-19.0 FINANCIAL EVALUATION ....................................................................................... 9-1 9.1 Introduction ................................................................................................... 9-1 9.2 Base Case .................................................................................................... 9-1 9.3 Levered Case ............................................................................................... 9-3 9.4 Performance Statistics.................................................................................. 9-410.0 KEY RISKS AND OPPORTUNITIES ..................................................................... 10-1Project No.: 155529 TOC iiMarch 2010
  4. 4. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARYTABLESTable 1-1: Mine Production Summary .............................................................................................. 1-4Table 1-2: Mill Production Details ..................................................................................................... 1-5Table 2-1: Summary of Mina de Cobre Panamá Resource ............................................................. 2-3Table 2-2: Mine Production Schedule .............................................................................................. 2-5Table 2-3: Mineral Reserve Estimates by Classification and Ore Type ........................................... 2-6Table 2-4: Concentrator Production Summary ................................................................................. 2-8Table 6-1: Inbound Freight Volumes* (tonnes) ................................................................................ 6-1Table 7-1: Summary of Capital Costs .............................................................................................. 7-2Table 8-1: Summary of Operating Cost Estimate ($/t milled) ........................................................... 8-1Table 9-1: Long-Term Metal Price Assumptions .............................................................................. 9-1Table 9-2: Summary of Key Financials (base case)......................................................................... 9-2Table 9-3: Impact of Metal Price Change ......................................................................................... 9-3Table 9-4: Levered Case Financial Results ..................................................................................... 9-4Table 9-5: Summary of Base Case Performance Statistics ............................................................. 9-4Table 9-6: Summary of Levered Case Performance Statistics ........................................................ 9-4Table 10-1: Key Higher-Risk Items for Project Development........................................................... 10-1FIGURESFigure 1-1: General Arrangement of Project Facilities ...................................................................... 1-3Figure 2-1: Regional Geology and Deposit Locations ....................................................................... 2-2Figure 2-2: Mineral Resources by Category ...................................................................................... 2-3Figure 2-3: Layout of Process Plant Area ........................................................................................ 2-11Figure 2-4: Process Flow Diagram .................................................................................................. 2-13Figure 2-5: Layout of Mine/Plant Site .............................................................................................. 2-16Figure 2-6: Layout of Eastern Infrastructure Area ........................................................................... 2-17Figure 2-7: General Arrangement of Port Site Facilities .................................................................. 2-18Figure 2-8: Locations of Electricity Supply Components ................................................................. 2-27Figure 2-9: Power Plant and Port Site ............................................................................................. 2-29Figure 6-1: Inbound Volumes by Material Type (tonnes/quarter) ...................................................... 6-2Figure 6-2: Inbound Volumes by Access Points (tonnes/quarter) ..................................................... 6-2Figure 6-3: Coclecito Access Road – Average Number of One-way Trips Each Day....................... 6-4Figure 9-1: Sensitivity of After-Tax NPV @ 8% ................................................................................. 9-2Figure 9-2: Sensitivity Spider Graph for After-Tax IRR ..................................................................... 9-3Project No.: 155529 TOC iiiMarch 2010
  5. 5. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY E X EC U T I V E S U M M A R Y1.0 INTRODUCTION1.1 Purpose and Objective of the FEED Report The purpose of the FEED Study (Front End Engineering Design) is to describe the status of the Mina de Cobre Panamá project, in the Donoso District of Panamá, as of 12 March 2010 in sufficient detail for MPSA to pursue international financing options and move on to the next stage of project delivery. AMEC was retained in early 2007 to develop the Draft Interim FEED Report (AMEC, 2008), a study produced for Teck Cominco to bring the Mina de Cobre Panamá project (then known as the Petaquilla project) to full feasibility level. This FEED Study follows on from that body of work. The objective of the FEED Study is to produce a capital cost estimate with an accuracy of +15%/-15% with a confidence level of 80% of estimated final cost based on 10% completion of engineering.1.2 Terms of Reference The FEED Study addresses the mineral resource, mine plan, processing and support facilities, management of tailings, water, and waste rock, site access, transportation of materials and equipment, port requirements, power supply, environmental aspects, and project execution. MPSA commissioned AMEC to prepare this report with input from MPSA, Inmet, and their various consultants, as listed below.  Inmet/MPSA  WLR Consultants, Inc.  Sim Geological Inc.  AMEC  SGS Mineral Services Limited  G&T Metallurgical Services Ltd.  Pocock Industrial, Inc.  Sandwell Inc.  Swiss Energy LLC  Golder Associates Ltd.  Pipeline Systems Inc. (PSI)  DJB Consultants Inc.  Estudios Electricos.Project No.: 155529 ES 1-1March 2010
  6. 6. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY E X EC U T I V E S U M M A R Y1.3 Scope of Facilities  The mine plan has been developed for the life of mine and includes three open pit areas: Botija, Colina, and Valle Grande. The FEED Study develops the project facilities sufficiently to commence production from Botija. In the early years of production, both Colina and Valle Grande will be brought into production well before the process plant expansion planned for Year 10.  The copper concentrate will be pumped as a slurry through a pipeline to the port site for filtration, storage, and loading into ocean-going vessels for shipment to market destinations. The molybdenum concentrate will be dewatered at the mine / plant site and bagged for truck delivery to the port site.  The new project port site at Punta Rincón will cover close to 28 ha, approximately one-third of which will be used for laydown and container storage. The power plant, including ash storage facilities, covers an area of 61 ha. The port will be used for material import, including coal for the new power generating plant adjacent to the port site, and for concentrate export. Marine facilities will include a causeway and jetty, a radial shiploader, a shore-based crane, a main berth for ships from 30,000 dwt to 65,000 dwt in size, a separate berth for barges and costal vessels, and a tug pen.  Both the mine/plant site and port site operations will be supported by equipment maintenance shops, warehouses, container storage areas, administration and security facilities, potable water supply, sewage treatment plants, and gravel batch plants for use during both construction and operations. A permanent camp will be established at the mine / plant site for personnel working in both operating areas.  The independently owned and operated coal-fired power station will generate 300 MW of electricity for distribution to the project and connection to the Panamanian power grid.  A new access road will be constructed between the mine/plant site and the port site. Three pipelines will be buried in the shoulder of the road, one for pumping the copper concentrate to the port site, one for diesel fuel delivery to the mine, and the third for returning filtrate water from the dewatered concentrate, together with fly ash from the power plant, back to the tailings management facility (TMF) at the mine / plant site.  Another new access road will be constructed from approximately 5.2 km west of Coclecito to the southeast corner of the TMF. This will permit project traffic to access the mine site from the Pan-American Highway via the existing road from Penonomé and avoid the Molejón mine site.  All facilities are designed to operate continuously, 24 h/d, 365 days per year. A general arrangement drawing of the project facilities is provided in Figure 1-1.Project No.: 155529 ES 1-2March 2010
  7. 7. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY E X EC U T I V E S U M M A RYFigure 1-1: General Arrangement of Project FacilitiesProject No.: 155529 ES 1-3March 2010
  8. 8. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY1.4 Production Summary  Ore from the Botija, Colina, and Valle Grande pits will be treated in a large concentrator using current technology to produce a copper concentrate and a molybdenum concentrate for sale on the world market. The concentrator will initially treat a nominal 150,000 t/d of ore supplied from the Botija pit; later, ore will be received from the Colina and Valle Grande pits. From Year 10, the concentrator ore throughput will be increased by 50%, to a nominal 225,000 t/d, to maintain production of concentrate despite a falling head grade. Crushing, grinding, bulk rougher flotation, water, and air systems will increase in capacity by 50% to accomplish the increase in ore treatment rate; all other systems will remain at the same size.  The metallurgical testwork supports a conventional flowsheet of crushing, grinding, differential flotation, and filtration designed to process a nominal 150,000 t/d of ore at a head grade of up to 0.7% copper and 0.013% molybdenum.  The metallurgical results indicate that the concentrates will be of good quality with no significant levels of deleterious constituents. A total of 27.289 million dry tonnes of copper concentrate at a grade of 28% Cu, containing 7.641 million tonnes of copper, 2.690 million troy ounces of gold, and 45.228 million troy ounces of silver, is scheduled to be produced over the 30-year life of the mine. Production of molybdenum concentrate is expected to total 185,648 dry tonnes at a grade of 52%, containing 96,537 tonnes of molybdenum. The molybdenum concentrate will also contain 520 g/t of rhenium.  Project cash costs are estimated to average US$0.78/lb during Years 2 to 16 and US$0.90/lb LOM. Annual metal production over the life of the mine is shown in Table 1-1, followed by mill production details in Table 1-2. Table 1-1: Mine Production Summary Average Annual Metal Production Total Metal Years 2–16 Life of Mine Life of Mine Copper (tonnes) 289,069 254,695 7,640,850 Gold (oz) 108,325 89,674 2,690,230 Silver (oz) 1,544,468 1,507,612 45,228,358 Molybdenum (tonnes) 3,604 3,218 96,537Project No.: 155529 ES 1-4March 2010
  9. 9. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY Table 1-2: Mill Production Details Year kt NSR $/t Cu% Mo% Au g/t Ag g/t RCu %* RMo %* RAu g/t* Ag Rec % Y1 Y1 Q1 5,775 15,04 0.41 0.010 0.08 1.31 0.36 0.006 0.05 47.3 Y1 Q2 10,580 17.47 0.47 0.008 0.11 1.35 0.42 0.005 0.07 47.3 Y1 Q3 12,739 18,99 0.52 0.009 0.11 1.30 0.46 0.006 0.07 47.3 Y1 Q4 13,351 19.69 0.53 0.010 0.11 1.53 0.48 0.006 0.07 47.3 Total Y1 42,445 18.29 0.50 0.009 0.11 1.39 0.44 0.006 0.06 47.3 Y2 Y2 Q1 14,857 20.40 0.55 0.010 0.12 1.43 0.49 0.007 0.07 47.3 Y2 Q2 14,674 20.75 0.56 0.009 0.12 1.42 0.51 0.006 0.07 47.3 Y2 Q3 14,056 19.66 0.53 0.010 0.11 1.31 0.48 0.006 0.07 47.3 Y2 Q4 14,600 20.62 0.56 0.010 0.11 1.51 0.51 0.006 0.06 47.3 Total Y2 58,187 20.37 0.55 0.010 0.11 1.42 0.50 0.006 0.07 47.3 3 57,221 20.73 0.56 0.011 0.11 1.41 0.50 0.007 0.07 47.3 4 57,106 20.67 0.56 0.010 0.11 1.46 0.51 0.006 0.07 47.3 5 55,906 22.00 0.59 0.011 0.11 1.61 0.54 0.007 0.07 47.3 6 57,104 21.88 0.59 0.011 0.11 1.69 0.54 0.007 0.07 47.3 7 56,811 20.61 0.56 0.008 0.14 1.74 0.50 0.005 0.09 47.3 8 56,676 19.23 0.53 0.009 0.09 1.73 0.47 0.006 0.06 47.3 9 54,800 18.74 0.52 0.010 0.09 1.67 0.46 0.006 0.05 47.3 10 80,187 15.47 0.43 0.008 0.08 1.48 0.38 0.005 0.04 47.3 11 82,601 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3 12 82,601 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3 13 82,601 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3 14 82,600 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3 15 82,600 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3 16 84,078 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3 17 84,078 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3 18 84,078 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3 19 84,079 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3 20 84,079 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3 21 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3 22 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3 23 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3 24 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3 25 73,880 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3 26 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5 27 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5 28 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5 29 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5 30 38,938 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5 Total 2,142,652 14.60 0.41 0.008 0.07 1.43 0.36 0.005 0.04 45.8 * Recovered grade1.5 Project Background and History The potential of the Mina de Cobre Panamá project has been investigated since 1968. A preliminary feasibility report was prepared by Panamá Mineral Resources Development Co. Ltd. in 1977 and updated in 1979. In 1994 and 1995, Kilborn Engineering Pacific Ltd. issued a prefeasibility study and update for Adrian Resources Ltd., a precursor of Petaquilla Minerals Ltd. and Petaquilla Copper Ltd. In November 1996, H.A. Simons,Project No.: 155529 ES 1-5March 2010
  10. 10. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY now AMEC, produced a feasibility study for Teck Corporation with a subsequent update in January 1998. In May 1998, the updated January 1998 document was submitted to Dirección General de Recursos Minerales (General Directorate of Mineral Resources, DGRM) of the Panamanian Ministry of Industry and Commerce, and was accepted as the official Feasibility Study to satisfy concession law requirements for the delivery of a feasibility study. The Petaquilla (Mina de Cobre Panamá) concession rights had been granted to Minera Petaquilla, S.A., now Minera Panamá, S.A. (MPSA), under Panamanian Law No. 9 on 26 February 1997. At that time the shareholders of MPSA were Petaquilla Copper Ltd., Teck Cominco, and Inmet Mining Corporation. In September 2008 Inmet acquired Petaquilla Copper Ltd., and in November 2008 Inmet acquired Teck Cominco’s remaining share in MPSA, taking Inmet to a 100% interest in MPSA. In October 2009 Inmet announced an option agreement with LS-Nikko Copper Inc. under which LS-Nikko has the right to acquire a 20% interest in the Minera de Cobre Panamá copper project. If LS-Nikko exercises the option, it will receive an equity interest in MPSA. The name of the project was changed to Mina de Cobre Panamá in 2009.1.6 Property Description and Location The Mina de Cobre Panamá Concession in Colón Province is approximately 20 km north of the Continental Divide that bisects the northern and southern parts of Panamá. The process plant site location is N8°50 and W80°38; the port site location at Punta Rincón is N9°02 and W80°41. The Concession Area is characterized by rugged topography with heavy rainforest cover. The dominant landforms are relatively narrow ridges that parallel major geological structural trends and are bisected by numerous surface water drainages. Climatic conditions are equatorial, with a high average precipitation level of approximately 4,700 mm/a, high humidity, and relatively high temperatures of 25°C to 30°C year-round.1.7 Legal Status Inmet Mining Corporation, directly and through several wholly-owned subsidiaries, owns 100% of the shares of Minera Panamá, S.A. (MPSA). Korea Panamá Mining Corp, a wholly-owned subsidiary of LS-Nikko Copper Inc., has an option to earn a 20% interest in MPSA by funding its pro rata share of MPSA’s ongoing development costs, to a maximumProject No.: 155529 ES 1-6March 2010
  11. 11. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY of US$150 million, until a production decision is made, and re-imbursing its prorata share of past expenditures. Under Panamanian Ley Petaquilla, or Law No. 9, 1997, the concession rights to the Mina de Cobre Panamá (then Petaquilla) property were granted to Minera Panamá, S.A. (then Minera Petaquilla, S.A.). This project-specific law gave MPSA rights over the gold, copper, and other mineral deposits for the purposes of exploring, extracting, processing, transporting, and marketing of all base or precious minerals located in the 13,600 ha Concession Area. The Molejón Gold Project Agreement, executed 1 June 2005 by and between Teck Cominco Limited, Petaquilla Minerals Ltd. (PTQ), Inmet Mining Corporation, and Minera Petaquilla, S.A. (now Minera Panamá, S.A.), assigns to PTQ the surface and mineral rights over 600 ha located within the Concession Area (the Molejón Concession) to permit PTQ to independently develop the Molejón gold deposit as the first phase of a multiphase development of the Concession Area. PTQ was also given the right to explore and mine gold deposits in the larger Concession Area, while MPSA retains the right to develop any copper deposits on the Molejón Concession. MPSA will exercise its rights under Law No. 9, 1997, to acquire or lease state lands located in the proposed TMF area. MPSA has undertaken an investigation of existing private holders of surface rights and will initiate negotiations for the acquisition of these properties according to the procedures established by Law No. 9 and other applicable laws. In the event that lands are occupied, MPSA will adhere to International Finance Corporation’s Performance Standard 5 in connection with relocation and resettlement of affected persons and communities. MPSA will also conform with the requirements of IFC PS 6 regarding protected areas, since the proposed TMF is located within the Donoso Multiple-Use Area, a form of protected area in Panamá. At Punta Rincón, where the proposed port site facilities are located, MPSA purchased surface title to much of the land required for construction and permanent use of the site between 1998 and 2000. Additional land will be acquired as above. MPSA is entitled under Law No. 9 to an easement for the Coast Road between the Concession and Punta Rincón. In accordance with current Panamanian legislation, MPSA must submit an Estudio de Impacto Ambiental Category III (ESIA, or Environmental and Social Impact Assessment) to the environmental authority, Autoridad Nacional del Ambiente (ANAM, or the National Environmental Authority). ANAM’s approval of the ESIA is the key element of the permitting process. More than 150 additional permits have been identified as being required for development activities such as tree clearing, use of water, and general construction. Other regulatory agencies include the maritime authority for port facilities and the municipality of DonosoProject No.: 155529 ES 1-7March 2010
  12. 12. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY for general construction. Application for these permits will proceed in parallel with and immediately following the ESIA approval process.Project No.: 155529 ES 1-8March 2010
  13. 13. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY2.0 TECHNICAL SUMMARY2.1 Geology Copper-gold-molybdenum porphyry-style mineralization was discovered in central Panamá during a regional survey by the United Nations in 1968. Exploration by several companies has since outlined three large deposits and several smaller ones. Drill programs have been conducted by United Nations Development Program (1968-1969), Panamá Mineral Resources Development Company (PMRD), a Japanese consortium (1970-1980), Inmet-Adrian Resources-Teck (1990-1997), Petaquilla Copper (2006-2008), and Minera Panamá (MPSA) (2007-2009). A total of 1,275 diamond drill holes (230,555 m) have been completed. The porphyry deposits occur at the southern margin of a large granodioritic batholith of mid-Oligocene age (36.4 Ma), in a WNW-ESE-oriented zone with dimensions of 9 km x 4.5 km (Figure 2-1). The three main deposits are Botija, Colina, and Valle Grande. There are also a number of smaller zones, the most significant being Brazo and Botija Abajo. All of the porphyry-style mineralization on the property is hosted in granodiorite, feldspar-quartz-hornblende porphyry, and adjacent andesitic volcanic rocks. At Botija, a number of north-dipping feldspar-quartz-hornblende porphyry dikes cut the granodiorite. Two roof pendants of andesitic volcanic rocks occur in the central and eastern margin of the deposit. At Colina, mineralization is associated with an east-southeasterly trending, shallow, north-dipping, 2.5 km x 1 km feldspar-quartz-hornblende porphyry sill and dike complex that intrudes granodiorite and andesitic volcanic rocks. The Valle Grande zone is associated with a southeast-trending feldspar-quartz-hornblende porphyry lopolith bounded to the north and south by andesitic volcanic rocks and minor granodioritic dikes. At Brazo and Botija Abajo, the host rocks are dominantly feldspar-quartz or feldspar-quartz-hornblende porphyries. Hydrothermal alteration along the Cobre mineral trend is primarily silica-chlorite, which is interpreted to be a form of propylitic alteration. Potassic alteration, consisting of salmon coloured potassium feldspar and secondary biotite, is seen in the central parts of Botija. Argillic and phyllic alteration is patchy in the three main deposits, with the latter variety being most prevalent near the tops of the deposits. At Brazo, pervasive sericite, clay, and pyrite are associated with well-developed quartz stockworks. Hypogene sulphides occur as disseminations, micro-veinlets, fracture fillings, and quartz-sulphide stockworks. Chalcopyrite is the dominant copper mineral, with lesser bornite. Traces of molybdenite are commonly found in quartz veinlets. There is no significant zone of supergene enrichment at Botija, Colina, or Valle Grande. At Brazo, supergene mineralization consisting of chalcocite-coated pyrite and rare native copper is found to a depth of at least 150 m.Project No.: 155529 ES 2-1March 2010
  14. 14. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY Figure 2-1: Regional Geology and Deposit Locations The mineral resources for the porphyry deposits on the Mina de Cobre Panamá Concession were estimated using the entire drill hole and assay database that exists for the project and a pit shell defined with a copper price of $2.30 per lb and a Cu cutoff grade of 0.15%. The resources are summarized in Table 2-1 and Figure 2-2.Project No.: 155529 ES 2-2March 2010
  15. 15. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARYTable 2-1: Summary of Mina de Cobre Panamá Resource Tonnes Deposit Category (Mt) Cu (%) Mo (%) Au (g/t) Ag (g/t) Botija Measured 261 0.56 0.009 0.13 1.50 Indicated 907 0.33 0.007 0.06 1.00 Inferred 407 0.21 0.004 0.03 0.70 Colina Indicated 1,178 0.35 0.007 0.05 1.50 Inferred 1,090 0.24 0.005 0.03 1.20 Valle Grande Indicated 671 0.34 0.006 0.04 1.30 Inferred 1,141 0.24 0.005 0.03 1.00 Botija Abajo Indicated 184 0.28 0.004 0.09 0.90 Inferred 287 0.22 0.005 0.07 0.90 Brazo Indicated 71 0.43 0.004 0.12 0.70 Inferred 269 0.27 0.004 0.07 0.60 All Areas Measured 261 0.56 0.009 0.13 1.50 Indicated 3,010 0.34 0.006 0.06 1.20 Measured + Indicated 3,271 0.36 0.007 0.06 1.30 Inferred 3,194 0.24 0.005 0.04 1.00Figure 2-2: Mineral Resources by CategoryNote: Tick marks at 1 km spacingProject No.: 155529 ES 2-3March 2010
  16. 16. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY2.2 Mining The mine plan was initially developed from the deposit models produced by MPSA and Inmet Mining as of 1 November 2009. A series of floating cone analyses were conducted to determine economic pit limits and the mining phase development sequence for three mineral deposits in the project Concession Area: Botija, Colina, and Valle Grande. Botija is immediately northeast of the proposed process plant site, Colina is about 2 km to the west-northwest, and Valle Grande is roughly 1 km to the southwest. The floating cone evaluations, mine design, and reserve estimates are based on metal prices of $2.00/lb Cu, $12.00/lb Mo, $750/oz Au, and $12.50/oz Ag. Recoveries for Cu, Mo, and Au vary by grade, ore type, and deposit, while Ag recovery is generally fixed except for deductions for saprock ore. Over the life of the project, concentrator recoveries will average about 86% for Cu, 59% for Mo, 54% for Au, and 46% for Ag. Weighted average mining costs of $1.33/t were used in the pit limit analyses, along with base ore processing and general/administration costs of $3.88/t and $1.49/t, respectively. Grinding rates will vary by ore type and deposit, which affects the unit ore processing and G&A costs and, therefore, the cutoff grades used for reserve estimation. A construction materials quarry and 11 additional mining phases were designed using pit slope recommendations from AMEC E&E geotechnical engineers and the floating cone pit shells for guidance. Four principal mining phases, or pushbacks, were generated for Botija, four for Colina, and three for Valle Grande. A contractor will excavate and distribute construction materials to project facilities, clear mining areas, and remove saprolite. The Owner’s mining equipment fleet and crews will be active only in the 11 primary phases, focusing almost exclusively on hard-rock mining. A mine production schedule was developed using a variable NSR cutoff grade strategy to increase early revenues to improve overall project returns. Cutoffs will be elevated significantly during the first seven years of operations and then gradually decline to internal cutoffs around Year 14. A third grinding circuit will be added to the concentrator and will commence operation in Year 10, increasing the base ore processing rate from 150,000 t/d to 225,000 t/d. Owner’s preproduction stripping would commence about 15 months before plant start-up. After completion of the mining phase designs and the open pit sequence and waste rock storage facility (WRSF) plans, a new model of the Botija deposit was completed in late January 2010 and subsequently released for mine planning purposes. This model includes additional in-fill drill hole data, updated geological interpretations, new metal grade interpolations, minor adjustments to in-situ densities, and updated projections of daily milling rates based on the latest metallurgical testwork. Milling rates for ore types in Colina and Valle Grande were also updated, but no other changes were made to the model of these two deposits (i.e., no new geologic interpretations, densities, or gradeProject No.: 155529 ES 2-4March 2010
  17. 17. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY interpolations from the November 2009 model). Because the milling rates affect unit ore processing and general and administration (G&A) costs, new cutoff grades were determined and applied to the open pit sequence plans to re-estimate the mine production schedule. Table 2-2 summarizes the resulting mine production and material handling schedule. Mine operations will be scheduled for two 12-hour shifts per day, 365 days per year. The concentrator will operate an estimated 29.5 years and will process about 173 Mt of stockpiled ore during Years 28 to 30. The changes caused by the new Botija model and milling rates are small. Ore tonnages within the Botija ultimate pit decreased approximately 3% compared to the previous deposit model, but copper grades are about 3% higher, resulting in nearly the same estimates of contained metal. The ore reserves estimated from the open pit sequence plans are generally within 2% to 3% of target levels computed from the variable grinding rates. These differences are within resource/reserve estimation error; consequently, the mining phase designs and open pit sequence plans were not changed.Table 2-2: Mine Production Schedule Ore to ROM To Saprock To Low-Grade Waste Rock Stockpile or Mill Ore Stockpile Ore Stockpile & Saprolite Total Material Contractor Owner Time Period (kt) (kt) (kt) (kt) (kt) Strip Ratio (kt) (kt) Prior to M-15 166 1,279 402 55,567 57,414 344.87 57,414 - PP M-15 to M0 1,306 5,745 4,933 48,902 60,886 45.62 10,021 50,865 Y1 42,445 3,548 16,857 64,674 127,524 2.00 6,729 120,795 Y2 58,187 3,127 20,900 39,745 121,959 1.10 - 121,959 Y3 57,221 - 22,892 25,493 105,606 0.85 2,096 103,510 Y4 57,106 2,504 18,880 34,849 113,339 0.98 10,435 102,904 Y5 55,906 11,425 10,913 31,349 109,593 0.96 6,368 103,225 Y6 57,104 4,610 5,353 40,218 107,285 0.88 8,505 98,780 Y7 56,811 10,782 5,738 52,040 125,371 1.21 12,571 112,800 Y8 56,676 3,725 3,607 60,599 124,607 1.20 7,316 117,291 Y9 54,800 4,220 4,127 57,190 120,337 1.20 - 120,337 Y10 80,187 239 4,365 53,717 138,508 0.73 - 138,508 Y11-Y15 413,003 3,066 - 294,492 710,561 0.72 20,355 690,206 Y16-Y20 420,392 8,484 - 269,593 698,469 0.66 44,664 653,805 Y21-Y25 369,396 2,344 - 135,213 506,953 0.37 - 506,953 Y26-Y30 * 363,418 - - 24,392 387,810 0.07 - 387,810 Total 2,144,124 65,098 118,967 1,288,033 3,616,222 0.69 186,474 3,429,748* Includes 172,549 kt of ore reclaimed from stockpile in Years 28 to 30Project No.: 155529 ES 2-5March 2010
  18. 18. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY The Mina de Cobre Panamá project mineral reserve estimates are based on proven and probable ore; all inferred mineral resources were treated as waste. Table 2-3 presents the mineral reserves by classification and ore type, based on cutoff grades that vary by ore type, deposit, and the time period in which the reserves are to be mined. Total material within the designed ultimate pits is estimated at 3.444 billion tonnes, resulting in a stripping ratio of 0.61:1 (tonnes of waste per tonne of ore). Contained metal is projected at approximately 19.6 billion pounds of copper, 361 million pounds of molybdenum, 4.96 million troy ounces of gold, and 98.7 million troy ounces of silver. Table 2-3: Mineral Reserve Estimates by Classification and Ore Type Ore Type kt NSR $/t Cu % Mo % Au g/t Ag g/t Proven Mineral Reserves Saprock 4,400 11.78 0.43 0.013 0.11 1.62 Andesite 19,500 16.67 0.45 0.010 0.09 1.05 Porphyry 117,100 24.26 0.64 0.010 0.16 1.74 Granodiorite 104,300 21.25 0.57 0.010 0.13 1.57 Total 245,300 22.15 0.59 0.010 0.14 1.61 Probable Mineral Reserves Saprock 56,100 9.63 0.39 0.007 0.09 1.49 Andesite 414,700 13.52 0.39 0.007 0.06 1.42 Porphyry 927,500 14.50 0.41 0.007 0.07 1.52 Granodiorite 499,100 12.55 0.36 0.007 0.05 1.20 Total 1,897,400 13.63 0.39 0.007 0.06 1.41 Proven + Probable Mineral Reserves Saprock 60,500 9.79 0.39 0.008 0.09 1.50 Andesite 434,200 13.66 0.39 0.007 0.06 1.40 Porphyry 1,044,500 15.59 0.44 0.008 0.08 1.54 Granodiorite 603,400 14.05 0.39 0.008 0.07 1.26 Total 2,142,600 14.60 0.41 0.008 0.07 1.43 Note: Estimates based on metal prices of $2.00/lb Cu, $12.00/lb Mo, $750/oz Au, $12.50/oz Ag, and variable NSR cutoff grades The following primary equipment will be required for the peak mining rates during Years 11 to 20:  7 blasthole drills ................................................ 311 mm diameter, 60 tonne bit loading  4 electric shovels .............................................. 55 m3  2 front-end loaders ............................................ 38 m3  36 off-highway haul truck .................................. 360 t payload  2 crawler dozers ............................................... 635 kW (D11-class)  8 crawler dozers ............................................... 435 kW (D10-class)Project No.: 155529 ES 2-6March 2010
  19. 19. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY  4 rubber-tired dozers ........................................ 370 kW (834H-class)  2 motor graders ................................................ 400 kW (24M-class)  3 motor graders ................................................ 220 kW (16M-class)  3 water trucks ................................................... 80,000 litre (96 tonne) Mine workforce levels will vary between about 317 and 563 people during the operating years, depending on production rates and haulage distances. This includes both salaried and hourly workers, expatriates, and nationals. Four rotating crews will provide continuous operator and maintenance coverage in the mine.2.3 Metallurgy The property has been investigated on behalf of several owners since 1968, and preliminary feasibility studies and prefeasibility studies were done in 1977, 1979, and 1994; feasibility studies were produced in 1994 (updated in 1995), 1996, and 1998. In all of these studies, testwork was done commensurate with the requirements of the times; the study produced in 1997 and published in early 1998 (Teck Corporation Petaquilla Feasibility Study, Simons Project No. U11G, Volume 1, January 1998) built mostly upon work done in the earlier studies. In 1997, an extensive program of metallurgical testing was designed to confirm earlier work on the metallurgical response of material from the Botija and Colina deposits. Most of the work was done at Lakefield Research Ltd., Lakefield, Ontario. Grinding, flotation, dewatering, and mineralogical work were performed as part of this program. In addition to the Lakefield work, locked-cycle flotation testwork and modal analysis were performed at G&T Metallurgical Services Ltd., Kamloops, B.C. (G&T) to assist in defining grind requirements for both rougher and cleaner flotation. Copper-molybdenum separation by differential flotation was conducted by International Metallurgical and Environmental, Kelowna, B.C. (IME). The metallurgical work done for the present study has built upon the 1997/1998 study with some knowledge of, but no reliance on, work performed before that time. The testwork before 2007 was based on large composite samples, and the results, particularly for flotation testing, could not be used for interpreting the variability of response for material within the deposits. Consequently, a large sampling program was undertaken in 2008/2009 to bolster the knowledge from previous work and provide the missing insight into the variability of response. A total of 16 special holes for metallurgical grinding and flotation tests were drilled in the Botija, Valle Grande, and Colina orebodies. Sample preparation, flotation testing, and testing of flotation products were done primarily at G&T. Grinding work was conducted at SGS Mineral Services, Lakefield, Ontario, and at Philips Enterprises LLC, Golden, Colorado.Project No.: 155529 ES 2-7March 2010
  20. 20. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY The program resulted in:  additional geological data  a comprehensive suite of grindability parameters, leading to new throughput estimates  additional flotation response data for estimating concentrates production and operating costs  sample materials for marketing purposes  additional design data for solid-liquid separation, regrinding, and pipeline design. The resulting life-of-mine production data are shown in Table 2-4. Table 2-4: Concentrator Production Summary Parameter Unit Years 2-20 Years 21-30 Life of Mine Throughput tonnes 1,367,393,000 732,814,000 2,142,652,000 t/a 71,968,053 73,281,400 71,421,733 t/d 197,173 200,771 195,676 Head Grade % Cu 0.46 0.34 0.41 % Mo 0.008 0.006 0.008 g/t Au 0.08 0.05 0.07 oz/t Ag 1.46 1.39 1.43 Recovery % Cu 88.4 79.5 85.9 % Mo 61.9 53.1 59.0 % Au 57.2 44.6 54.3 % Ag 47.3 42.8 45.8 Copper Concentrate Production t/a 1,033,685 697,813 909,625 % Cu 28 28 28 Molybdenum Concentrate t/a 7,090 4,741 6,188 Production % Mo 52 52 522.4 Waste and Water Management Three general forms of waste will be generated as a direct result of project construction and mining operations: earthworks construction waste, mine process tailings, and pit waste. Earthworks construction waste, such as organics, unsuitable foundation material, and over-wet material, will be stored in waste rock storage facilities (WRSFs) or spoil piles, in the TMF, or in separate stockpiles for use during closure and reclamation. Comprehensive erosion and sediment control measures will be implemented to minimize sediment transport downstream of the work areas.Project No.: 155529 ES 2-8March 2010
  21. 21. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY For the first 22 years of the 30-year mine life, tailings will be stored in the TMF. For the last 8 years, tailings will be deposited in mined-out pits (first Botija, then Colina). Tailings will be transported from the plant site through a pump and pipeline system. Water from the TMF and later the backfilled pits will be recycled to the mill for use as process water. The TMF will be contained by means of several dams – North, East, West, and South – with a total ultimate length of about 11 km and an average height of approximately 80 m. Saprolite will be used for the North and East starter dams, but the bulk of the structures will be constructed of hydraulically placed cycloned sand produced from the mill tailings. The starter dam for the South Dam, as well as its annual raises, will be constructed of saprolite. The West Dam will be constructed as a water-retaining structure with a saprolite core, granular filters, and upstream and downstream rockfill shells. In terms of water storage within the TMF, the design for the facility includes provision for contingency storage equivalent to the 1-in-1,000-year return period storm, 24-hour duration rainfall event. Emergency spillways capable of passing the 24-hour PMP will be maintained during operations. The closure spillway will be designed to operate in perpetuity, as required, and to convey the 24-hour PMP. Drainage blankets and collection ponds at the tailings dams will manage construction water from the ongoing cyclone sand operations, the associated runoff from these operations, and rainfall events. Excess water in the TMF will be pumped to a polishing pond by means of an active discharge system and then released to Río del Medio, downstream of the North Dam. Mine waste, including saprolite, weakly weathered rock, and competent rock, will be placed in the WRSFs developed near the pits. The WRSFs will be constructed by end-dumping. Weaker material – saprolite and weathered rock – will be stored upslope and away from the toe foundation areas. Encapsulation techniques will be used to manage potentially sulphide-rich (reactive) waste rock. The saprolite storage facility will be constructed by end-dumping saprolite and pushing it into place with a dozer. Waste rock roads along low areas and creek bottoms will aid in drainage of the saprolite waste and enhance trafficability on the saprolite. With nearly 5 m of precipitation falling at the site every year, including very intense rainfall events of considerable duration, water management will be a key and integral part of project construction development and operation. Water inflows to the open pits will be managed through a series of diversion ditches constructed around the top bench of each pit to route non-contact water from the upstream catchment areas. The diversion structures will be lengthened as the pit shell increases over time. Non-contact water collected in the diversions will be diverted to the environment. Pit water derived from direct precipitation or seepage will be pumped from the pit to the process water reservoir. A sediment pond will be required for pre-strippingProject No.: 155529 ES 2-9March 2010
  22. 22. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY during preproduction construction, as this water will be released directly to the environment. The WRSFs will be constructed at the headwaters of Río Botija, Río Petaquilla, and Río del Medio. As such, most of the facilities will require minimal non-contact water diversion ditches. Collection ponds will be needed during operations, however, to collect seepage and runoff from the WRSFs. The collected water will be pumped to the TMF. Sediment ponds will be required for construction of the low-grade ore stockpile and saprolite WRSF during preproduction to manage runoff water, sediment control, and TSS levels, as this water will be released directly to the environment until the TMF is constructed. Site grading at both the mine/plant and port sites will incorporate sloping, ditching, and sediment ponds as required to manage runoff water. The access road will incorporate a series of culverts and bridges to handle water from intersected watercourses. Ditches along the road section will concentrate and direct water to the nearest water management structure. Erosion and sediment control will be a significant issue throughout site development, construction, and operation of the Mine de Cobre Panamá project. The need for such control is based on the climate, surficial geology (primarily saprolite) at the site, local experience, and experience at sites with similar conditions elsewhere. Erosion control measures will include lining all diversions, ditches, and ponds excavated in or constructed using saprolite with processed granular materials such as filters and rip-rap; providing flocculant stations at the sediment ponds; and protecting fill slopes with a combination of geosynthetic liners and vegetation. These structures will need to be maintained and reconstructed throughout the project life.2.5 Process Plant2.5.1 Plant Site Location The locations of the process plant and ancillary facilities at the mine/plant site are shown in Figure 2-3. The facilities are centrally located with respect to the three open pits and associated WRSFs. The available area is rather limited, but the layout has been designed for efficient material flow and personnel access to the buildings. The facilities will be constructed along ridgelines or on hill tops to maximize the use of gravity for milling, flotation, and tailings discharge, to minimize cut-and-fill quantities, and to place the structures on competent ground.Project No.: 155529 ES 2-10March 2010
  23. 23. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY Figure 2-3: Layout of Process Plant Area Process Water Pond Bulk Thickener Plant Maintenance Shop Copper Thickener Laboratory Site of Future 3rd Line Flotation Site of Future Stockpile Reagents Main Substation Coarse Ore Stockpile Process Water Tanks Service Vehicle Shop Truck Shop ROM Stockpile Primary Crushers Based on analysis of the available geotechnical data, it has been determined that the surface is underlain by approximately 8 m of saprolite followed by 14 m of saprolitic rock above bedrock. Further investigative work will be required to better define the subsurface conditions to optimize foundation design during the next phase of work.Project No.: 155529 ES 2-11March 2010
  24. 24. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY The plant site ranges in elevation from 194 m at the mill feed end to 168 m at the bulk concentrates thickener at the opposite end. This arrangement enhances the sloping design of the process plant, providing gravity flow through the process from the mill down through the flotation circuit. The elevation of tailings discharge from the plant, at nominally 172 m, also provides gravity flow down to the TMF, although some pumping will be required for tailings distribution around the beaches of the impoundment from Year 10 onward. Site grading will incorporate sloping, ditching, and sediment ponds as required to manage excess runoff from heavy precipitation events. The stabilized slopes of the final embankments are expected to generate very little sediment load, however, and runoff from non-contact areas will generally be allowed to follow the natural watercourse down to the Botija drainage channels. Contact water will be routed to join drainage from the WRSFs for ultimate disposal in the TMF.2.5.2 Process Description Ore from the Botija, Colina, and Valle Grande pits will be treated in a concentrator to produce a copper concentrate and a molybdenum concentrate for sale on the world market. Initially, the concentrator will treat nominally 150,000 t/d of ore supplied from the Botija pit; later, ore will be received from the Colina and Valle Grande pits. From Year 10, the concentrator ore throughput will be increased by 50%, to a nominal 225,000 t/d, to maintain production of concentrate despite a falling head grade. Crushing, grinding, bulk rougher flotation, water, and air systems will increase in capacity by 50% to accomplish the increase in ore treatment rate; all other systems will remain at the same size. The process plant is designed to process ore at a head grade of 0.7% Cu and 0.013% Mo. These levels are higher than the highest sustained head grades of 0.58% Cu and 0.011% Mo expected to be mined in Year 5, but the design provides the flexibility to accommodate a wide range of head grades over the project life. The plant design also allows for 15% day-to-day fluctuations in throughput. The process includes the following facilities:  crushing and grinding to liberate minerals from the ore  froth flotation to separate most of the copper and molybdenum minerals from minerals of no commercial worth  differential flotation to separate the copper and molybdenum minerals from each other  facilities to store tailings and provide reclaim water for the process  facilities to remove water from the products and to ship concentrates to market. A simplified flow diagram is provided in Figure 2-4.Project No.: 155529 ES 2-12March 2010
  25. 25. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY Figure 2-4: Process Flow Diagram Pebble Open Pit Mine Crushers (2) Cyclone Cluster (4) SAG Mills (2) Primary Screens Crusher Coarse Ore Stockpile Ball Mills (4) Tailings to Impoundment Rougher Flotation (4 banks of 7) st Potentially Acid-Generating 1 Cleaner Flotation (2 banks of 8) Tailings to Impoundment Regrind Cyclone Vertimills Cluster (2) Bulk Conc. (4) Thickener To Process Water Mine 2nd Cleaner 3rd Cleaner Bulk Site Flotation (6) Flotation (4) Concentrate o/f Storage Tanks (2) Port Mo Rougher Pipelines (32 km) Mo Mo Scav. Flotation Conditioner Flotation Overflow Mainline Cu Conc. Cu Conc. Pumps (2x5) Thickener Storage Tank (2) Thickener/ nd 2 Mo Clnr Clarifier Flotation Cu Conc 1st Mo Storage Tank Clnr (2) Regrind Vertimill Mo Bins Copper Flotation Filter Filters (4) Shiploader Mo Conc. Mo Dryer Packing Cu Conc. Loadout 3rd Mo Clnr 4th Mo Clnr 5th Mo Clnr Mo Concentrate Flotation Flotation Flotation Thickener Run-of-mine (ROM) ore will be delivered by haul truck to the dump pockets of two primary gyratory crushers installed in a single in-ground concrete structure close to the rim of the Botija pit. A 400,000 tonne ROM stockpile will be located close to the crushers to provide a 2½-day supply of ore for times when weather conditions preclude hauling ore out of the pit. The ROM stockpile will be operated on a first-in, first-out basis to prevent the accumulation of aged ore.Project No.: 155529 ES 2-13March 2010
  26. 26. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY Separate feeders and take-away conveyors will move the ore from each crusher to a series of conveyors, which will discharge the ore onto a conical coarse ore stockpile at the concentrator. Provision will be made at the transfer point between the two overland conveyors to accept mill feed from future crushed ore sources. The coarse ore stockpile will hold a 2½-day supply for the mill, 15 hours of which will be available to the reclaim feeders without the assistance of a bulldozer. Two trains of feeders and conveyors will draw ore from below the coarse ore stockpile and feed two parallel wet-grinding lines, each consisting of a semi-autogenous grinding (SAG) mill and two ball mills, all equipped with gearless drives. The SAG mill circuits will be closed by trommel screens followed by washing screens; conveyors will deliver screen oversize to pebble crushers. The pebble crushing circuits will include pebble bins, cone crushers, and a bypass arrangement. Crushed pebbles will return to the SAG mills via the feed conveyors. From Year 10 of operation, another coarse ore stockpile and grinding line will be added to increase the ore treatment rate. Discharge from each SAG mill will be evenly split between two ball-mill circuits. The four ball-mill circuits will be closed by hydrocyclones. Ground slurry will be directed to a flotation circuit where a bulk sulphide concentrate, containing copper, molybdenum, and gold values, will be collected and concentrated in a rougher followed by three stages of cleaner flotation. The roughers and first cleaners will be tank cells, while the second and third cleaners will be column cells. Before cleaning, rougher concentrate will be reground in vertical stirred mills. From Year 10, a 50% increase in rougher capacity will be required to accommodate the increase in throughout, but the amount of copper will be the same; therefore, no change to the existing downstream regrind and cleaning capacity will be needed. When the molybdenum head grade warrants operating the molybdenum plant, the bulk concentrate will be thickened in a conventional thickener (with no flocculant) and pumped to a differential flotation plant, where copper minerals will be depressed, and molybdenite will be floated into a molybdenum concentrate. The molybdenum concentrate will be filtered, dried, and packaged in tote bags for shipment to offshore roasters. Tailings from the molybdenum flotation circuit will constitute the copper concentrate, which will be pumped approximately 30 km to a filter plant at the project port site on the Caribbean coast. If the molybdenum head grade is very low, the molybdenum separation plant will be bypassed.2.5.3 Tailings Disposal Rougher tailings, found in testwork to be non-acid-generating, will be piped by gravity to a cyclone house at the south end of the TMF. Coarse material in the tails will be used to construct sand dams to contain the tailings; about half of the coarse tailings will need to be cycloned to provide enough material. Cyclone underflow (sand) will be spigotted ontoProject No.: 155529 ES 2-14March 2010
  27. 27. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARY the downstream faces of the dam, and cyclone underflow and uncycloned tailings will be distributed around the upstream faces of the dams and onto the beaches of the TMF. Cleaner tails are presumed to be potentially acid generating and will be directed by gravity in a separate line for subaqueous discharge in the TMF. Direct precipitation into the TMF, together with contact water directed to the facility from the WRSFs and other disturbed land in the area, will result in a net excess of water in the TMF. Some of this water will be recycled back to the process plant by barge-mounted pumps. Excess water will be discharged at a controlled rate to the natural watercourses downstream of the impoundment, via a polishing pond, and will meet all applicable emission limit values and receiving water quality criteria.2.5.4 Port Site Process Facilities Copper concentrate will be pumped to the port through a pipeline buried in the shoulder of the Coast Road and directed to a thickener-clarifier, and the thickened underflow will be pumped to concentrate stock tanks. Concentrate from the stock tanks will be filtered in automatic presses. Dry filter cake (8% to 9% moisture) will be stored in a covered building with up to 100,000 tonnes of storage capacity, equivalent to approximately 30 days’ production. Concentrate will be reclaimed from the storage building and fed onto conveyors by front-end loaders for transfer to the berth and loading onto bulk freighters. Filtrate water from the presses and various concentrate-contact waste streams from the plant will be collected in the thickener-clarifier. Thickener underflow will join the filter feed, and the overflow will be used for process water. Excess water will be pumped through a return water line to the TMF at the mine site; fly ash from the power plant will be slurried and injected into the return water pipeline for disposal in the TMF.2.6 Infrastructure/Ancillary Facilities Various project support facilities will be provided at the mine site and the port site. The mine site facilities are divided into two areas: the mine/plant site, which includes buildings and structures for repair and maintenance of mine and plant equipment, and the eastern infrastructure area, which includes facilities for personnel accommodations, administration, and security. The port site includes facilities for concentrate storage and load-out to ocean-going vessels, coal receiving facilities, a barge berth, and inbound/export freight handling and storage facilities. Layouts of the mine/plant site, eastern infrastructure area, and port site are shown in Figures 2-5, 2-6, and 2-7.Project No.: 155529 ES 2-15March 2010
  28. 28. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARYFigure 2-5: Layout of Mine/Plant SiteProject No.: 155529 ES 2-16March 2010
  29. 29. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARYFigure 2-6: Layout of Eastern Infrastructure AreaProject No.: 155529 ES 2-17March 2010
  30. 30. MINERA PANAMA, S.A. MINA DE COBRE PANAMÁ PROJECT FEED STUDY EXECUTIVE SUMMARYFigure 2-7: General Arrangement of Port Site FacilitiesProject No.: 155529 ES 2-18March 2010

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