La Coipa's Silver Lining: Turning a mine in Chile into one of the world's largest silver producers

Although the Placer Dome­ operated and 50%-owned La Coipa Mine in Chile had previously been best known as a gold producer, right now it has become one of the world's largest producers of silver. Silver, the unsung little brother of gold, is trading in theUS$5/ ounce range, which is relatively high for silver, while gold is trading at about$280 / ounce, the lowest it has been in nearly 20 years. To make silver as good a revenue-earner as gold, you have to produce a lot of it, and that's what La Coipa is doing during 1998 and 1999 by mining the Chimberos deposit.

Packing 220 kg bars at the mill

A Study in Concentration

There always was a lot more silver at La Coipa than gold. When the mine started operations in 1991, La Coipa 's gold reserves were 2.5 million ounces - contained in 65.6 million tonnes of ore with a concentration of I . 2 grams of gold per tonne. Yet the estimated silver content was 181 million ounces - contained in the same volume of ore with a concentration of 85.9 grams of silver per tonne. At the end of 1998, after more than seven years of operation, La Coipa 's gold reserves now stand at 2.0 million ounces of gold, as well as 115 million ounces of silver, of which 18 million ounces are contained at Chimberos.

The Chimberos deposit was acquired in 1994 and a feasibility study was completed by La Coipa in 1996. Chimberos is a small but very high-grade deposit, which the feasibility study estimated to have 4.8 million tonnes of ore with a very high concentration of 305 grams of silver per tonne. The study showed the economics to be robust. Fortunate timing made the project more so, with silver prices higher than expected when production came on stream in 1998. Capital investment in the development of the deposit was US$27 million, US$2 million under budget.

The Chimberos open pit mine is located in a mountainside 34 km by road from the La Coipa mill. Each round trip from mine to mill takes three hours of driving. Development started in I 997 and mining began in 1998. All of La Coipa's metal production in the last six months of 1998 and the first nine months of 1999 is coming from Chimberos.

In 1998, La Coipa enjoyed strong cash flow from operations - US$44 million - thanks to the huge volume of silver being produced and the relatively high price it obtained on the market. As Placer is primarily a gold producer, production of other metals, such as silver, is measured in equivalent ounces of gold. La Coipa's 1998 output was 451,177 ounces, relying on a ratio of silver to gold determined by the London market price, currently about 52:17.

For example, 115 tonnes of silver bars (3.71 million ounces) were poured in one record month in 1998, which is equivalent in value to 2.2 tonnes (70,700 ounces) of gold bars. In the first half of 1998, the gold-silver split was about 60:40; in the last half, production was almost all silver.

Because of the much large r flow of metal through the refinery, La Coipa modified some of the equipment and enlarged the size of the furnaces. For the long hauls from mine to mill, La Coipa worked with suppliers to ensure the tyres and transmissions of the 150-ton leased trucks could handle the distances.

The Long Haul

For the haul truck operators, fatigue is the enemy. They make only four trips each 12-hour shift, so much of the shift is long-distance driving along a familiar road. They are permitted frequent rest stops and there is a pull-out with a cabin so that they can get out of the cab for a meal break. The truck cabs have radio contact with the dispatchers and operators can listen to the chatter or join in. There are also two commercial channels as well as tape decks to listen to while they keep their eyes on the road.

There are 126 operators working 12-hour shifts - four days on and four days off - with 32 drivers working 24 trucks on each shift. Long-distance operator Hugo Astudillo says he feels connected to his machine. "I feel proud to be working with a company that has this long haul that is unlike other mines", he says. "The distances arc no problem and I enjoy the work." Not all the drivers and trucks are making the long journey to the mill, as some are hauling and piling waste close to the mine.

In the refinery there's a lot more product to be seen than is usually encountered in a gold refinery, where small and heavy equals very high value. Each truck's 136 tonnes of ore contains about 40 kg of silver (a little more than the weight of one London good delivery ba1"). The chunks of ore are gradually crushed down into pebble-sized pieces. These pieces are then fed into grinding mills - large, rotating drums containing -steel balls or rods - where they become ground down as finely as talcum powder. The powder is put into flotation tanks, where cyanide is used to separate the silver from the other materials. The metal is then melted and poured into huge 220 kg bars of about 80% silver, which are then stacked criss-cross on pallets before being packed in wooden boxes stamped with the Mantos de Oro logo for shipment to the world's refineries.