Water and Gold....Without gold in the ground at El Zorro then we won't need the water and without water, we will not be mining any gold.
Zeff highlighted these two resources in his latest presentation last week.
Thankfully for us, it's becoming very obvious that there is a significant gold resource slowly being JORC defined. We have multiple mineralised zones along a 5km strike just waiting to be drilled. This could be a project that leads to a resource lasting for 15-20 years or more.
Just as importantly, IMHO, Zeff de-risked the project significantly by highlighting the future use of seawater for our future production requirements. In fact he said many Australian miners in WA are using more salinated ground water than what we will. Seawater you say, how can we use that? Isn't that too corrosive for production machinery and unsuitable for concentration, leaching and other hydrometallurgy purposes?
I asked myself those questions... as I thought we'd have to truck recycled water like Fenix Gold plan to do from towns like Copiapo.
Surprise surprise, I discovered many companies in Atacama and the Antofagasta region (North of Atacama) who are either using desalinated water from desal plants or who are using raw seawater!
It's interesting to note here that some companies have chosen desalinated water whilst others have opted for direct seawater. The decision making behind which option to take comes down to cost i.e CAPEX and OPEX as we all know. It's also important to know that it is practically impossible to use saline water in operations that do not currently use seawater, because their facilities are not suitable for the corrosivecharacteristics of dissolved oxygen and sodium amongst other chemicals that make up sea water. But, if the mine operation is setup to operate like this then it's all systems go!
As you know, the Tesoro presentation has highlighted the location of some nearby desal plants. This maybe is where we get our water from or another location where direct sea water is available. Perhaps we setup our own sea water pumping station? The following diagram show the general process from the desal plant to the mine.
Some of these desal plants, such as the Enapec one planned to open in 2021, located between Copiapo and Caldera, will use solar power to provide the necessary energy to operate the plant. Some of these plants reuse the brine produced from the desal process and if we consider thatin a desalination plant usually for each litre of desalinatedwater produced, approximately one litre of water with a salinity thatdoubles the salinity of the seawater is returned to the sea. Big enviro matter this... Also, simple things like covering water storage ponds to reduce evaporation and dust suppressant measures all contribute to saving water. These examples are important considerations for a project because of the positive environmental inputs these will have for the enviromental feasibility study and potential permits we hope to get.
The use of recycled water in the Atacama region and at the mine sites themselves is a massive saving. Up to 73% of the water used is recirculated for further use.
In fact seawater consumption in the Atacama region has increased significantly in the period 2010 to2015 because traditional water resources are depleted andcurrent operations and new projects have begun to use seawater. Seawater consumption, period 2010–2015 (Data from Cochilco 2016).
Some might ask, why not use underground water from the water table? Surely there is plenty to go round? This sadly is not the case as some mining companies have found out to their detriment. Dwindling ground water levels were blamed on Kinross Gold's Maricunga gold mine in Chile being shut down in 2016 after a court upheld the country’s regulator (SMA) decision on environmental concerns.
With regards to costs, to desal water and to transport it to the mine are amongst the two biggest factors. In Chile, traditional copper and gold mines have usually been at high altitude and therefore require further distances to transport the water. How good is it that El Zorro is at low altitude and only 10km or so as the crow flys to the coast! In fact, we're likely to incur seawater costs similar to, if not cheaper than Australia and Canada. Cost per use of seawater in mining countries and altitude of deposits (Consejo minero, 2012). I know, when i speak to the the TSO faithful, that we're all aware that El Zorro is something big. But I thought it wouldn't hurt to look at another important aspect i.e WATER in our efforts to de-risk and further understand what makes up this discovery.
Cheers M8
TSO Price at posting:
9.0¢ Sentiment: Buy Disclosure: Held
(20min delay)