A new gold, silver and copper Project is expected to begin operations in the province of San Juan, with an estimated initial foreign investment of 3 billion dollars and production that would last for almost 50 years. It is called project Constelación, as proposed to the government by the Canadian NGEx, which holds advanced exploration programs in Chile and Argentina, a company listed in Toronto Stock Exchange and NASDAQ.
The project Constelación is the joining of three mines already owned by NGEx, two of them in San Juan, in the border with the province of La Rioja, and the third one in Chile, in the III Region of Atacama, with distances between them of around 10 and 15 kilometres.
According to the Minister of Mining of San Juan, Alberto Hensell, this project would become the largest in South America, even over Pascua-Lama which is located between the province of San Juan and the IV region of Coquimbo in Chile. This bi-national project (comprised by the mines Jose María and Filo del Sol in San Juan, and Los Helados in Atacama) would be feasible now that the exchange rate has been updated, the retentions were eliminated as well as the DJAIs (Prior Declaration of Import) and the limitations on transfers of funds abroad, all of them implemented by the new administration.
The legal framework is based on the protocol signed for the "Project of Mining Vicuña", within the "Treaty between the Republic of Chile and the Republic of Argentina about mining integration and complementation" on January 6, 2006, designed for the projects located along the border between both countries.
Jose Maria estimated resources are 7.4 million pounds of copper; 7.4 million ounces of gold; and 34.5 million ounces of silver, while Los Helados would have 17.6 billions of pounds of copper; 10.1 million ounces of gold; and 92.5 million ounces of silver of indicated resources. One interesting aspect of the project is the combination of gold, silver and coper, which allows to compensate the decrease in the value of one of them with the increase in the value of the others. Even without considering the mine Filo Del Sol, this project largely exceeds Pascua-Lama, since the later has estimated resources in 17 million ounces of golds, 632 millions of ounces of silver, but nothing of copper, and 25 years of production.
The Minister informed that the plan is to start with the operations in Jose Maria, with Surface mineralization, and continue in 7 years in Los Helados, an underground mine with a life estimated in 41 years. This allows to reduce the initial investment and after 7 years of production start with the highly concentrated gold nucleus in Los Helados.
Since there are only 10 kilometres between them, the material would be processed in one singleplant in San Juan which would use 500 litres of water per second, from an aquifer located at 8 kilometres from the plant. To that end, the Company will have to build an electric line of 250 kilometres long in 220 kV, to satisfy an estimated demand of 160 MW.
The project would start after the Environmental Impact Assessment and the permits between this and the next year. The investment would be shared between NGEx Resources and the Japanese Pan Pacific Copper Co. Ltd. –owner of the copper project Caserones in Chile through Lumina Copper- and the governmental agency Japan Oil, Gas and Metals National Corporation (JOGMEC) -with oil operations in Peru and funding party of the lithium and potassium project Salar de Olaroz in the province of Jujuy
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