Argentina has significant mineral deposits and potential to become a major minerals producer. It has experienced a mining boom since 2002, with investment growing nearly 2000% and employment in mining increasing over 450%. However, recent actions by the government have caused uncertainty and a flight of capital from the country. While Argentina has vast mineral resources and a developing mining sector, it needs consistent regulations and policies to realize its potential.

1. August 10, 2012 Mining Journal 13www.mining-journal.com
Focus – ArgentinA
A
RGENTINA is Latin America’s third-largest
economy and potentially home to vast
undiscovered mineral deposits to match its
neighbour and mining giant, Chile, with
which it shares the Andean mountain range.
This is one of the world’s great mineral provinces,
containing mining deposits of gold, silver, zinc, copper,
oil, manganese, lithium and uranium. Extending over
4,500km along the western margin of the continent,
more than 3,500km of the Andes lies within the
country’s borders.
“Argentina has a wonderful opportunity for mining,”
Rob McEwen, chief executive (CEO) of McEwen Mining
Inc, tells Mining Journal.
The country has a national mining plan that includes
bold targets through to 2029. President Cristina
Fernández de Kirchner, elected to a second term in
October 2011, has labelled this“the decade of mining”
as investment, production and exports have soared.
Since 2002 investment has ballooned 1,948% to a
record US$2.57 billion in 2011, while direct employment
in mining has grown by 451% to 517,000 people.
At the beginning of the decade Argentina had just
18 exploration and mining projects.There are now 614,
according to Secretary of Mines data, with investment
in exploration for gold, copper, silver, zinc, lithium,
potash, uranium, precious stones and coal.
Argentina’s mining secretary, Jorge Mayoral, wants it to
become one of the world’s top mineral producers.The
country has already gone some way to meeting this goal
in gold and silver, where it ranks 10th, according to
calculations based on Bloomberg data. It is the
third-largest producer of lithium, has vast uranium
deposits and is set to produce 2.4Mt of potash in 2012.
“Argentina could become a bigger producer of
mineral wealth, but this will depend on accessibility
to deposits; importation and exportation laws that
allow for mining development; the ability to repatriate
investments;, tax and royalty levels; and the stability of
laws regarding mining,”Silver Standard Resources Inc’s
head of institutional relations in Argentina, Dr Favio
Casarin, tells Mining Journal.
Around 160 companies own mining prospects,
and of those 80 are actively exploring.The sector has
a cross section of larger firms such as Swiss-based
Xstrata plc and top gold producer Barrick Gold Corp,
along with medium-sized firms such as Pan American
Silver Corp and juniors such as Mariana Resources Ltd,
Troy Resources Ltd and Mirasol Resources Ltd.
Investor appetite seems to be quite good, according
to Doug Bright, Argentina Mining Ltd’s director.
He added:“Some investors are moving away from
investment in Australia, whose sovereign risk is seen as
having increased due to recent policy changes by the
federal government. South America is known, especially
by geologically savvy investors, as‘elephant country’in
terms of its potential for large deposits because of its
geological environment.”
About 15 international mining projects are expected
to begin operating in the short term, with a total
investment of more than AP150 billion (US$32.7 billion).
Companies from 30 countries are investing in Argentina
with Canada leading the field followed by Australia, the
US and Chile, along with a number of Argentine firms.
The pace of investment has been growing since the
1990s and as Paola Rojas, vice president, corporate
development at Argentine mining consultants Rojas &
Asociados, tells Mining Journal, despite a blip in 2008/09
with the economic crisis, the country has recovered a
lot faster than expected and has continued to expand.
Some 600 projects and prospects have been
identified by the government. But GEMERA (Grupo de
Empresas Exploradoras de la Republica Argentina) puts
this figure closer to 420 – of which 25 are at an
advanced exploration stage, Ms Rojas said.
Currently 14 mines are in production and three more
are under construction – Barrick’s Pascua-Lama,Vale
“Since 2002 investment has
ballooned 1,948% to a record
US$2.57 billion in 2011,
while direct employment in
mining has grown by 451%
to 517,000 people”
bY cAMilA reed
Argentina
FAst FActs: ArgentinA
capital: Buenos Aires
population: 42,192,494
currency: pesos
gdp growth rate: 8.9% (2011 est.)
land of opportunities
Investment could help the country’s mineral sector realise its potential
McEwan Mining’s Los Azules project
13_17MJ1208010.indd 13 09/08/2012 17:09

2. 14 Mining Journal August 10, 2012
Focus – ArgentinA
SA’s Potasio Rio Colorado and Gold Corp’s Cerro Negro.
Pascua-Lama is a gold-silver mine that straddles the
border with Chile, making it the first bi-national mine in
the world. It is set to enter production mid-2013 and
has proven and probable reserves of 17.9Moz of gold
and 676Moz of silver contained within reported gold
resources.
Pascua-Lama is expected to produce 800,000-
850,000oz/y of gold, and about 35Moz/y of silver, in its
first full five years of operation at negative cash costs of
US$225-US$275/oz. Production at the US$4.7 billion
project is proposed over a 20- year mine life.
Vale expects to overcome obstacles that prompted
management to re-evaluate its US$3 billion potash
project in the province of Mendoza earlier this year.
Elsewhere, Silver Standard Resources Inc says it has
one operating mine in Argentina, Mina Pirquitas, in
Jujuy province, which is expected to produce
8.2–8.5Moz of silver and 10.5–11.5Mlb (4,764t-5,217t) of
zinc in 2012.
Silver Standard has a major on-going exploration
programme at its Mina Pirquitas and Diablillos
properties.The goal at Pirquitas is to expand resources
and reserves to extend the mine life.While, the goal at
Diablillos is to define some satellite ore bodies in
addition to the primary target.
gold output setto quAdruple
Around 1.6Moz of gold, 19.8Moz of silver and 446,700t
of copper are currently produced in Argentina. Last
year, some 1.5Moz of gold was produced, 23.9Moz of
silver and 147,350t of copper.
Rojas estimates gold output could rise to as much as
3.3Moz/y, making Argentina the second-largest Latin
American producer after Peru, where production was
around 4.6Moz in 2011.
Likewise, silver output could rise to as much as
81Moz/y and copper could double if the mega projects
of El Pachon, owned by Xstrata, and Agua Rica, owned
by Minera Alumbrera, obtain the necessary corporate
and government approvals and get access to the
funding they require.
El Pachon could potentially start operating in 2016
after three years of construction, with initial output
estimated at 400,000t/y of copper at an estimated cost
of US$4.1billion, says Xstrata.
The company’s assets in Argentina also include
Alumbrera, the country’s largest copper mine, which is a
joint venture with Goldcorp Inc (37,5%) andYamana Gold
Inc (12.5%), and a 50% interest in Agua Rica – which is
35km from Alumbrera. Both are in Catamarca province.
Agua Rica is a copper-molybdenum-gold porphyry
deposit with a polymetallic epithermal overprint. It
would be developed as a conventional open-pit mine
and produce an estimated 250,000t of copper in
concentrate together with gold and molybdenum
by-product credits.
legAl hurdles
Canada’s Pan American Silver owns the Navidad silver
deposit, one of the largest undeveloped silver deposits
in the world, located in Chubut province, and the
Calcatreu gold project, located in Rio Negro province.
In July, after considering draft mining legislation
submitted to Chubut’s regional government, the
company said the extra provincial participation would
“render the Navidad project uneconomic at any
reasonable estimate of long-term silver prices”.
If the law were approved without any major changes,
Pan American says it would have no other option but to
suspend further investment in Navidad.
Argentina is very much a nascent mining country,
with the sector accounting for around 1.5% of GDP.
It is rich in natural resources, has a highly literate
population, an export-oriented agricultural sector, and
a diversified industrial base. Mining is heavily focused
among juniors conducting exploration, with 75% of
mining companies engaged in this activity.
Despite this massive potential, this year the actions
of the government, both at a state and regional level,
have sown confusion and caused a flight of capital from
this young mining nation.
The forced repatriation of mining export revenue on
geologicAl regions
Together with Brazil, Paraguay and Uruguay, northern
Argentina is the visible part of the South American
Plate. (The submerged part of this plate forms a
broad continental shelf under the Atlantic Ocean.)
Argentina occupies part of the Patagonian
platform in the south and the Andes mountains
in the west.
The Precambrian-Paleozoic crystalline basement of
Argentina comprises plutonic intrusives (granites to
gabbros) and metamorphosed sedimentary and
volcanic rocks that host a range of styles of
mineralisation.These include nickel, copper,
chromium, platinum group metals, tungsten, tin, silver
and gold.
The crystalline basement is overlain by Paleozoic
to Cenozoic continental and marine sedimentary
rocks that also host a range of mineral deposits,
including lead, zinc, silver, copper, uranium and
vanadium.
Volcanic-intrusive activity during late Paleozoic
and Mesozoic times generated porphyry copper
and high-sulphidation epithermal gold-silver deposits
in the Andes, as well as epithermal gold-silver and
polymetallic mineralisation in Patagonia. Important
sediment-hosted uranium deposits also formed in
Patagonia in the Mesozoic.
Argentina boasts several world-class mineral
deposits, including porphyry copper-molybdenum
gold (Bajo de la Alumbrera), high-sulphidation
epithermal gold-silver (Pascua-Lama), low sulphidation
epithermal gold-silver (CerroVanguardia, Esquel) and
lead-silver (Navidad), as well as important deposits of
uranium.
Northern and western Argentina are dominated by
the satellite ranges of the Andes. Between the
mountains of the far northwest is the puna, a high
plateau rising to 3,400-4,000m. East of this is the
pre-puna, the gorges and slopes ranging in altitude
from 1,700m to 3,400m.
East of the Andes lie several ranges of hills, the most
important of which are the Sierras de Córdoba and the
Sierras de San Luis.These are mostly of ancient
Precambrian rocks.
The vast Paraná Basin stretches from the borders
with Brazil and Paraguay to the Atlantic at
Buenos Aires. In the northeast it mainly
consists of geologically recent deposits.The
eastern-most part of this basin, between the
Ríos Paraná and Uruguay, is the wettest part
of the country.
Known as Mesopotamia and consisting of the
provinces of Entre Ríos, Corrientes and Misiones,
it is structurally part of the Brazilian plateau of old
crystalline rocks, the‘heart’of the South American
Plate.
Northwest of Mesopotamia, and stretching from
the Paraná and Paraguay rivers west to the Andean
foothills and north into Paraguay and Bolivia, lies the
Gran Chaco, a vast plain that covers the provinces of
Formosa, Chaco and Santiago del Estero, as well as
parts of Santa Fe and Córdoba.
South of 33°S, the latitude of Mendoza and Rosario,
is a great flat plain, known as the Pampas, covering
some 650,000km2
.
Patagonia extends from the Río Colorado south to
the Magellan Straits and covers some 780,000km2
.
Most of this area consists of a series of tablelands and
terraces that drop in altitude from west to east.The
basic rocks are ancient, some classified as
Precambrian, but the surface has been subjected to
endless erosion.
Patagonia contains several distinct geological
terrains that host both precious and base-metal
deposits of varying ages.The west margin of
Argentinian Patagonia (and adjacent Chile) are part of
the Andean mountain chain where subduction since
Jurassic time has generated a series of volcanic-
intrusive magmatic pulses with associated epithermal
gold-silver and sub-volcanic porphyry copper-gold
deposits.
East of the Andean mountain chain, Argentine
Patagonia is characterised by two volcanic massifs; the
Somuncura massif in the north and the Deseado
Massif in the south.
Silver Standard's Pirquitas mine
13_17MJ1208010.indd 14 09/08/2012 17:09

3. August 10, 2012 Mining Journal 15www.mining-journal.comwww.mining-journal.com
local markets and requirements for companies to
source equipment domestically has forced some to
reassess their investments in the country.
McEwan says the actions of the government confused
the market and knocked millions of dollars of value off
copmanies with assets in the country.
The government has sought to offset foreign
suppliers with domestic ones, but Mr McEwan says right
now there was neither the quantity nor quality to
replace from outside.
Xstrata Copper’s manager of global communications,
Emily Russell, says the company has operated
successfully in Argentina since the start-up of Minera
Alumbrera in 1997.
Over the last decade it has implemented a local
supplier programme at Minera Alumbrera and over 70%
of goods and services were purchased nationally in 2011.
“Nonetheless, we are obviously continuing to closely
monitor the investment environment in the country,
together with other global economic factors, as we
advance El Pachón and Agua Rica towards construction
decisions,”she says.
Other laws also work against the mining industry.
About eight provinces have banned open-pit mining
and the use of chemicals common in the industry, such
as cyanide, effectively putting them off limits to
large-scale projects.
On the other hand, a number of other provinces,
including San Juan and Santa Cruz, are strongly in
favour of the industry. In January, Rio Negro province
joined La Rioja in lifting a ban on open-pit mining and
the use of cyanide.
Most agree that Argentina needs clear and
consistent regulation.The expropriation of partially
state-owned energy companyYPF from Spain’s Repsol
in April did nothing to calm nerves and while many
believe that this won’t be replicated in the mining
sector, it has sent out the wrong message.
“It is a concern. Look at other countries in South
America …. Bolivia,Venezuela.There is an attitude to
foreign capital that is not healthy,”said Mr McEwen.
Bolivian President Evo Morales revoked the mining
rights ofVancouver-based South American Silver Corp.
The decision to expropriate the Canadian company’s
Malku Khota silver mine was the second for Bolivia in a
month, highlighting the increasing risks to developing
mining in the region.
“While there is uncertainty in Argentina, as is the
case in other South American jurisdictions, we will
continue to work with the authorities and strive for the
best results,”says Dr Casarin, who is also President of
APPMA, the Argentine association of professionals from
the oil and mining industries.
glAcier lAw –will itthAw?
In July, the Supreme Court overturned temporary
injunctions granted by the federal court in San Juan (in
effect since November 2010) suspending the
application of the national law for the protection of
glaciers in the province.The law, which bans mining
and oil drilling on glaciers and the surrounding areas, is
designed to preserve water reserves.
The Supreme Court must still rule on the
constitutionality of the federal law, which has also been
challenged by the province of San Juan, labour unions
and local construction and mining chambers.
Barrick says that construction at Pascua-Lama and
mining activities atVeladero were not affected by the
ruling.Veladero is not far from Pascua-Lama.
“We believe we are legally entitled to continue our
current activities on the basis of existing approvals,”
Barrick says.
The company believes the federal legislation also
draws a distinction between new projects and those
already underway. President Fernandez vetoed a similar
law in 2008 on the grounds that it would hamper
provincial economies.
Xstrata’s El Pachon project also faces some
environmental challenges related to the glacier-
protection law as, according to environmental advocacy
group Cedha, there are over 200 glaciers in the project
area.
Meanwhile, an Argentine court ruled in favour of
suspending Famatina, a gold exploration project led by
Canada’s Osisko Mining Corp, in La Rioja province, until
a new ruling outlawing mining near glaciers is applied
in the area.
In the last five years, several mining companies have
attempted to obtain permits to explore the Famatina
mountain range, facing strong opposition from
residents and local authorities who fear for its health
and the environmental impact of the project.
AdVAntAges Abound
Despite recent setbacks many companies have not
been put off and are in Argentina for the long-term.
“It is very workable, but we feel we have an
advantage over some other foreign (to Argentina)
juniors in that our managing director, EduardoVidela, is
an Argentine national and geologist with a good
network of contacts locally,”says Argentina Mining’s Mr
Bright.
Argentina Mining is exploring five properties in San
Juan province and Mr Bright adds that exploration is
proceeding well at its flagship Cerro Blanco project.
At Copper Hill it has undertaken two campaigns
of diamond drilling and also ground geophysics and
it was at the point where interpretation of the data
was pointing it to the natural“centre of gravity”of the
potential ore-body, which would be the focus of the
next drilling campaign in mid-late 2012.
“I personally believe the advantages are many and
while there are some disadvantages, they are relatively
minor and do not outweigh the advantages, in our
experience so far.The biggest advantage is availability
of truly great potential for big discoveries in a land
where much of the country remains unexplored, even
in a province like San Juan which is the busiest
Argentine province in exploration terms.The language
is manageable, there is a well-established rule of law
and normal legal process and right of appeal,”said Mr
Bright.
Others noted that crime was low, and it was a safer
“About 15
international
mining
projects are
expected
to begin
operating
in the short
term, with
a total
investment
of more than
US$32.7
billion”
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13_17MJ1208010.indd 15 09/08/2012 17:09

4. 16 Mining Journal August 10, 2012
Focus – ArgentinA
operating environment than Mexico, with the country
also benefitting from more liberal foreign-investment
laws.
FiscAl iMpediMents
Argentina still has some way to go to match the tax
regimes of Chile and Peru, which are more favourable to
miners.
Earlier this year, McEwen Mining listed inToronto and
NewYork, combining two other McEwen-led companies.
“One big appeal was the cash flow from Minera Andes
would allow us to internally finance US Gold.
“With the confusion in the market and the
repatriation of profits, maybe that cash flow is not as
sure as it appears and we have to look at other avenues
to finance growth,”Mr McEwen tells Mining Journal.
But he says the government is starting to get the
message and has made strides to accommodate
business realities.
Meanwhile, miners in Argentina have sharply
reduced their exports as they are unable to meet a new
government rule forcing them to cash in the proceeds
within 30 days.
Precious metals company, Hochschild Mining Plc,
reported a drop in its attributable production of silver
equivalent for the second quarter, and says there was
an inventory pile-up at its San José mine due to
regulatory changes. Hochschild says exports have
resumed there and the inventory would be sold in the
second half of calendar 2012.
Pan American Silver was initially pleased to find that
Chubut’s draft mining legislation incorporated the
zoning of the province, allowing for the development of
Navidad as an open-pit mine.
But the draft law also introduces a series of
regulations that will greatly increase royalties on, and
impose economic participation by the province in all
mining projects.
The proposed regulations include a 5% Net Smelter
Return royalty (NSR) in favour of the province, which is
in addition to the 3% NSR that already existed; a
requirement for Petrominera, a resource company
owned by Chubut province, to receive no less than 4%
of total sales; and a requirement for Petrominera to
receive a 7% direct carried net pretax profit interest.
The increased royalties and the net carried interest
are in addition to a 10% export duty payable on the sale
of concentrates and a 35% income tax rate, which are
payable to the federal government.
Other obstacles that miners have to contend with
include the seasonal weather extremes for projects
above an altitude of 10,000ft.
Established mountain access is less readily available
and tracks must be put in.The rural roads are of mixed
to poor quality and the country has a high road toll so
that training is a requirement.
Despite these changes, opportunity still beckons and
there’s talk this could be a time for more mergers and
acquisitions or consolidation within the major mining
companies. Ms Rojas said it’s likely the sector will see
merger and acquisition (M&A) activity in the coming
months.
McEwen has been looking for a buyer or partner for
its US$2.9 billion Los Azules copper project, one of the
world’s largest undeveloped copper deposits. A
large-scale drill programme is due to start in November.
“We need stability before people will venture in. Big
players have expressed reservations. It’s a nice deposit
but there are questions about where it’s located,”he said.
lAbour lAws
Labour can sometimes be an issue too, as laws are rigid
and the unions are strong. Added to this, there is no
deep pool of skilled labour and there is a shortage of
people who want to work underground.
Rising inflation is driving up wages. Argentine
inflation expectations for the next 12 months climbed
in July to 35.7% from 34.9% in June.
Barrick says more than 5,500 direct jobs are being
created during Pascua-Lama’s three-year construction
phase. Once in production, Pascua-Lama will employ
about 1,600 people, and priority is given to hiring local
people. At Barrick’sVeladero mine (see page 18), more
than 94% of the employees are Argentinian.
Mina Pirquitas, like Barrick, is providing technical
training to its employees.
cliMAte
Argentina is located to the east of Chile, to the west of
Uruguay, and south of Bolivia and Paraguay.This vast
territory has a diversity of landscapes, where ice fields
contrast with arid zones; mountains with valleys or
plateaus; fluvial streams and lakes with large oceans,
broad grassy plains with woods and forests.
Situated between the Andes in the west and the
southern Atlantic Ocean in the east, Argentina is
divided into four main regions:
nNorthern subtropical woodlands and swamps;
nHeavily wooded slopes of the Andes Mountains in
the west;
nTemperate region surrounding Buenos Aires; and,
nSemi-arid and cold Patagonian Plateau of the far
south.
Argentina has many large lakes in the Andes and
the second-largest river system in South America (the
Paraguay-Parana-Uruguay) that drains from the
northern Chaco region to the Rio de la Plata, near
Buenos Aires.
Most of the country is considered temperate (with
a small arid portion in the southeast). However,
Argentina’s southwestern region has a cold and dry,
sub-Antarctic, climate.
The country’s subtropical region (with no dry
season) comprises the provinces of Misiones and
Corrientes, the northern area of Entre Ríos and the
eastern section of the Chaco region.The tropical
region comprises part of Salta, the west of Formosa
and Chaco, the eastern plains ofTucumán, nearly the
whole of Santiago del Estero and the northwest of
Santa Fe.The mountainous area, which includes the
sub-Andean hills, has a tropical highland climate.
Argentina’s moderate climates includes the
province of Buenos Aires, a large area of Entre Rios,
centre and south of Santa Fe, the eastern strip of
Cordoba and a part to the northeast of La Pampa.
The arid climates are in high plateau called La
Puna, Catamarca’s Andes, La Rioja and San Juan, the
neighbouring pre-andean area and Patagonia
extra-andean. Among the cold climates is the humid
strip of the Patagonian Andes.
Mariana’s Sierra Blanca project Troy Resources’ Casposo project
Coming up in next week’s issue...
High-risk, but greater
opportunity in DRC?
www.mining-journal.com/reports Media
Democratic Republic
of the Congo
High-risk, but greaterHigh-risk, but greater
opportunity in DRC?opportunity in DRC?
13_17MJ1208010.indd 16 09/08/2012 17:09

5. August 10, 2012 Mining Journal 17www.mining-journal.comwww.mining-journal.com
“However, when people have skills, they tend to be
in high demand at other projects as well.We offer many
advantages as a company, but we face the same skill
shortages as every other mine in the country:
engineers, metallurgists, electricians, instrumentation
experts and mechanics,”says Dr Casarin.
Argentina Mining says staffing was quite good, with
many employment and manpower agencies in the main
centres doing good work in pre-selection.
“Good hard-working labour is available in most local
towns. Salaries and wages are lower than Australia,
especially for unskilled workers,”says Mr Bright.
locAl hostilitY
The increase in global metals prices and exploration
activity in Argentina has cast a spotlight on miners.There
is a perception among some Argentines that foreigners
are stealing their wealth, that all the benefits are going to
foreign interests and being exported abroad.
“This creates a fertile environment for extracting
higher fees,”says Mr McEwan“But that is true globally,
not just in Argentina.”
As politicians worldwide look to fund their way out
of the economic slowdown, mining has become a
target. Argentina’s economy is decelerating after strong
growth for much of the past nine years.
High inflation, a sluggish global economy, waning
demand from neighbouring Brazil, falling grains
production as well as new trade and currency controls
have prompted the slowdown.
Policies will affect miners to varying degrees,
with bigger firms able to negotiate better terms
with the government and mitigate effects through
projects elsewhere. Smaller firms with earlier-stage
ventures may struggle a bit more, although others,
such as Argentina Mining, are positive about their
experiences.
Attitudes vary greatly across regions with Salta
and San Juan provinces strong proponents to mining.
Others, such as Chubut, with challenging new draft
laws, and Mendoza, where the attitude is hostile, and
Ms Rojas says she does not advise clients to venture.
Overall the allure of Argentina’s rich geological
profile is strong.The government aims to capitalise
on this and grow investment in mining further. By 2029,
it wants 950,000 people to be employed in the sector
and investment to quadruple from current levels. If
changes to recent laws materialise and the voices of
mining firms are listened to the much needed stability
could enable the long-term future of mining in
Argentina.
“Attitudes vary greatly across
regions, with Salta and
San Juan provinces strong
proponents to mining. Ms
Rojas says she does not
advise clients to venture into
Mendoza where the attitude
is hostile”
BUILDING PERFORMANCE
NOW
Silver Standard Resources Inc. l Suite 1400. 999 West Hastings Street l Vancouver, British Columbia V6C 2W2
Tel: 604-689-3846 l Fax: 604-689-3847 l Toll-free: 888-338-0046 l www.silverstandard.com
13_17MJ1208010.indd 17 09/08/2012 17:10

6. 18 Mining Journal August 10, 2012
Focus – ArgentinA
t
he Veladero mine is operated by Minera
Argentina Gold SA (MAGSA), a subsidiary of
Barrick Gold Corp, one of the world’s leading
producers of gold.
The mine is located in San Juan Province,
about 350km northeast of the city of San Juan,Veladero
sits in the high Andes at an altitude of between 4,000m
and 4,850m above sea level.
It is very close to the Chilean border and immediately
south of the Pascua Lama gold project, which straddles
the border between Chile and Argentina and is also
being developed by Barrick.
Veladero is accessed by a purpose-built 156km-long
road that passes elevations of over 5,000m above sea
level. Depending on the weather, it takes about seven
hours in a 4x4 vehicle to drive from San Juan, the
nearest city, to the mine. Conditions can be so severe
that special shelters have been built every 20km along
the access road to safeguard workers and travellers in
extreme weather.
At this altitude, the temperature is highly variable
and drops 2°C for every 300m increase in elevation.
During winter, which lasts from July to September, the
average daily temperature is -10°C, dipping as low as
-16°C during the night. Add to that the wind-chill factor
and the night temperature can drop to -40°C, a figure
that has been recorded several times.
“Winds blow from west to east and can be very
strong, sometimes 80-100km/h. even extreme winds of
up to 220km/h have been recorded by the weather
station,”says Jose Luis Fornés, mining superintendent at
Veladero, explaining that the average winds are
20-30km/h during the day but that this increases
substantially as the day wears out.
“Weather conditions can be very hard, especially in
winter, to the point where the access road can be
blocked and we have to declare an alert,”says Mr
Fornés. he adds that among its facilities, the mine has
an operating theatre with a surgeon, should any
medical emergency happen while the road is closed.
Because of the remoteness of the mine, operators at
Veladero work a pattern of 14 days in and 14 days out.
Of the 14 days at the mine, seven are worked during the
day and seven are worked during the night.
“We have special conditions here that complicate our
logistics.There’s nothing within a 100km radius around
us, so we expect reliability from our equipment and
suppliers,”says Mr Fornés.
History
Although mining activities around the San Juan
Province can be traced as far back as the early 19th
Century,Veladero represents the arrival of true
large-scale mining to this part of Argentina and it is
Barrick’s first operation in the country.
After a programme of exploration in the mid-1990s,
it was not until May 1997, in the middle of snow storms
and cut-off roads, that gold and silver was discovered in
an area called Federico.The winter of 1997 was
especially bad due to the el Niño weather
phenomenon, making it even more difficult to access
and continue work in some key areas. After four years of
exploration, in 1998 two very significant holes were
drilled in an area called Amable: holeV76 and holeV90,
which revealed excellent mineralisation and showed
the quality of the project.
Soon after this, MAGSA’s then parent company, ARP,
sold its shares to homestake Mining Co, which in turn
merged with Barrick in 2001.The environmental impact
assessment forVeladero was approved in November
2003 and construction started that same year. After an
investment of US$540 million in the construction of the
mine, commercial operations finally began in
September 2005 and the first gold bar was produced in
November that year.
Mining And processing
Veladero is an open-pit mine extracting gold and silver
from three ore bodies: Filo Federico, Amable and
Argenta. Federico, to the north and Amable, to the
south, are the original open pits. extraction at Argenta,
located in the southeast sector of the field, commenced
in 2010. exploration has also been carried out at a
fourth area, Cuatro esquinas, which is located in the
centre and will eventually become a working pit.
Veladero is a low-grade mine producing about 1g/t of
gold, with an ore-to-waste strip ratio of 3:1. Metal
recovery is achieved through heap leaching and
cyanide processing methods.
Veladero’s gold production in 2011 was 957,000oz at a
total cash cost of US$353/oz. Proven and probable
mineral reserves stand at around 11.3Moz of gold.
Rock extraction is carried out through drilling and
blasting, with the mine currently extracting an average
of 230,000t/d of rock. higher-grade ore is crushed to a
size of 32mm in a two-stage crushing process and then
transported via overland conveyor and trucks to the
leach pad area. On the other hand, very low-grade,
run-of-mine ore is hauled directly to the leach pad area.
All the ore is then stacked in a lined containment
area behind a retention dam. A cyanide leach solution is
applied to the top of the stacked ore and allowed to
percolate through the heap. As the solution travels
through the ore, it dissolves gold and silver from the
rock.This gold-rich solution is collected at the base of
the leach pad and pumped to a conventional
Merrill-Crowe process plant in order to recover the gold
and silver.
“ever since we started operations, we’ve been
looking for ways to increase production,”says Mr Fornés,
explaining that crushing capacity was expanded from
50,000-85,000t/d in 2009. heap leaching capacity and
transport capacity have also been increased.
Wind poWer
Veladero boasts a world-record wind turbine. Power at
the mine is provided mainly by diesel generators with a
total capacity of 13.5MW. however, in 1998, the
company installed a DeWind D8.2 wind turbine, which
currently produces 2MW, or around 20% of the energy
needed at the site. At over 4,000m above sea level, this
is the highest wind turbine in the world.The D8.2 has a
rotor diameter of 80m and is installed on a specially
developed 56m-high tower.
According to DeWind, at an elevation of 4,300m, air
pressure is only about 600mbar (compared with
1,013mbar at sea level), and the air density drops to
0.797kg/m3
(1.225kg/m3
at sea level).
Normally, a wind turbine operating at this altitude
would have a significantly lower yield than a turbine
operating at sea level at a site with the same wind speed.
One of the problems found by DeWind was the
effective cooling of the turbine equipment, as
traditional power converters and other electronic
components no longer function reliably at this altitude.
The company’s solution was the use of a four-pole
synchronous generator without slippage, connected
directly to the grid. Frequency regulation on the
DeWind D8.2 is by means of a gearbox developed by
VoithTurbo, theWinDrive, which is used as the third
transmission stage.The need for a secondary power
converter is eliminated, allowing the generator to be
connected directly to the grid.
“The use of wind energy provides a clean source of
power for the mine and also helps us to cut down on
fuel transport,”says Mr Fornés. he adds that, following a
trial period, the turbine’s capacity was gradually
increased to 2MW.
drilling And blAsting
Carlos Cabanillas, drilling and blasting general supervisor,
and Ramón Arjona, drilling and blasting senior
supervisor, explain the daily routine for their area.
Aiming high
Veladero in Argentina is a challenge for workers and machinery
by AdriAnA potts
18_19MJ1208010.indd 18 09/08/2012 09:18

7. August 10, 2012 Mining Journal 19www.mining-journal.comwww.mining-journal.com
“We have a meeting first thing in the morning to
check what the night shift is leaving us with; for
instance, if there were any incidents or problems with
the machines,”says Mr Cabanillas.This is followed by a
visit to the working area for a general inspection.“We
check the areas that are going to be blasted that day
and determine whether there will be blasting or not,”
says Mr Arjona, explaining that normally blasting
happens twice a day, at 14:00 and 18:00.
The severe weather can interrupt operations. Indeed,
as Mr Cabanillas points out, the mine receives an
updated weather report every day:“If there’s the
possibility of a thunderstorm that day, we don’t blast –
it could be catastrophic!”
eXtreMe conditions
Veladero has a silica-rich host rock, the quality of which
varies throughout the site.“We have areas where the
rock is hard, others where it is quite fragile and others
where it is not only hard but also highly compressive,”
says Mr Arjona.
Victor Astudillo, operator of the Atlas Copco PitViper
271 (PV-271) drill rig, knows this only too well. he
explains that, depending on the area where they are
working, drilling a production blast hole can take
anywhere from 18 minutes to one hour:“Most of the
rock is hard, so on average, it takes about 45 minutes to
drill a hole.”
Working at high elevations can present a number of
problems for any machine.With every additional metre
in elevation, air density and pressure decrease and
traditional electronic components no longer function
reliably.“Also, our severe winter can affect a machine
drastically,”says Mr Arjona, explaining that some areas
of the machine such as the air and water circuits can
easily get frozen.
To work under the weather conditions atVeladero,
the PV-271 had to be equipped with several special
features such as a more powerful engine and
compressor, as well as a cold-weather package, which
includes additional covering of the machinery housing
and allows for warm start-up and drill operation in
extremely cold conditions.
And how has the PV-271 fared in this harsh
environment?“Very well indeed and with good
reported availability times, too,”says Mr Arjona. he adds
that when comparing forecast versus real availability
and utilisation, the real figures normally come on top.
“The PV-271 has given us good levels of availability.We
can rely on that machine, and for us that’s what’s
important,”adds Mr Cabanillas.
MotiVAted bytecHnology
The PV-271 is poised to pleaseVeladero even more once
it is fitted with the Rig Control System (RCS) technology;
this will give the mine a series of highly automated
options, including autolevelling, autodrilling, GPS hole
navigation, rig remote access and communication,
wireless remote tramming, measure-while-drilling data
log files and tele-remote operation.
“We’re going for the full set of RCS functions and are
looking forward to using this technology atVeladero,”
comments Mr Cabanillas.
The managers atVeladero have also decided to
acquire a second PV-271 drilling rig and this will feature
RCS technology right from the start.
“The idea is that both machines will have the same
configuration, avoiding the need for different spare
parts and operations,”says Atlas Copco technician
Osvaldo Gil from the company’s Argentina office.
With both PV-271 machines featuring full versions of
the RCS system,Veladero will be able to take its drilling to
the next level.“Our idea is to be able to drill remotely
from a fixed distant point.We want to be at the forefront
when it comes to mining technology,”says Mr Cabanillas.
Using the latest high technology in drilling
automation will certainly helpVeladero achieve this
goal.
A drill rip operates at the mine
London November 8 - 9, 2012
Toronto November 12 - 13, 2012
New York November 15 - 16, 2012
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