The Phase 2 expansion of the Jacobina mine, in Brazil, is progressing ahead of schedule and is now expected to achieve its throughput objective one-year ahead of schedule, Canada-based Yamana Gold reported on Wednesday.
The company stated that the expansion would reach its Phase 2 objective of 8 500 t/d by the middle of the year, which would increase the mine’s production to 230 000 oz/y.
Yamana at the end of last year received its expansion permit for Jacobina, allowing throughput to increase to 10 000 t/d. This not only facilitates the Phase 2 ramp up, but also allow for the future Phase 3 expansion to increase production up to 270 000 oz/y.
With the Phase 2 expansion advancing ahead of schedule, Yamana reported that it would pursue the Phase 3 expansion to 10 000 t/y through incremental debottlenecking, requiring between $20-million and $30-million in capital expenditure.
The miner noted that it would complete the Phase 3 expansion by 2035.
Beyond that, Yamana reported that a Phase 4 expansion to 15 000 t/y was on the cards, which would increase production to 350 000 oz/y.
Engineering for Phase 4 was “well advanced”, Yamana reported, stating that a comprehensive plan, aligning the processing plant, underground mine and tailings management strategy, while managing capital expenditures and cash flow, was under way.
Jacobina is envisioned as a complex of multiple mines and Yamana said that it would place more emphasis on regional and generative exploration.
The mine currently has a reserve life of over 15-years plus a pipeline of resources and exploration targets that we believe will further extend mine life. Work performed since 2019 has allowed for the systematic exploration of the company's large land package in the Jacobina district, which covers 155 km of exploration potential, allowing for the definition of a 14-km long belt of gold-bearing conglomerate located north of the mine complex and also extending the known mineralised reefs south of João Belo in a continuous area extending 2 200 m.
Yamana is using a similar phased-expansion approach at Cerro Moro, in Argentina, where it is advancing a plant expansion study. The company explained that it was considering using fine screens instead of cyclones for classification to improve the efficiency of the existing ball mill. Combined with a slightly coarser grind size, this initial phase was expected to increase throughput to at least 1 500 t/d, a 40% to 50% increase in capacity, without impacting gold and silver recoveries.
The incremental capacity could be used for processing of lower grade mineralisation, which would increase gold and silver production, and in turn reduce fixed costs per unit at the mine, as those costs would be distributed over additional ounces.
Yamana reported that the capital cost of an initial phase was estimated to be between $15-million and $20-million, noting that many of the upgrades in the Phase 1 expansion would be sufficient for a second expansion phase to increase plant throughput to 2 200 t/d, double the existing capacity. Capital estimates for the Phase 2 expansion were also $15-million to $20-million, for a total capital investment over the two expansion phases estimated at $30-million to $40-million.
The company is currently evaluating two options for Phase 2 expansion, the addition of a high pressure grinding rolls unit before the existing ball mill or the addition of a regrind unit. An expansion of the flotation circuit would also be required.
Yamana stated that it was doing additional test work to confirm the optimal flow sheet option and that it would advance the selected Phase 1 and Phase 2 expansion options to a pre-feasibility study level, expected for completion in early 2023.
Meanwhile, the company reported first-quarter net earnings of $57.8-million, $0.06 a share, and adjusted net earnings of $83.6-million, or $0.09 a share.
Cash flows from operating activities of $151.7-million and cash flows from operating activities before net change in working capital increased 7.6% year-on-year to $197.3-million.
The miner reported production of 238 617 gold-equivalent ounces (GEO), which was in line with plan despite a lower gold-to-silver ratio. With the budget gold-equivalent ratio, GEO production would have exceeded plan. Quarterly GEO production increased year-on-year from strong gold production and the exceptional performance from Cerro Moro, which produced 44 801 GEO, an increase of 27% year-on-year.
Yamana said its gold production of 210 533 oz exceeded plan, following standout performances from Jacobina with 47 124 oz, El Peñón with 41 330 oz and Cerro Moro with 25 254 oz. March was a standout month for Jacobina, with the mine achieving record monthly production and throughput.
Silver production of 2.199-million ounces exceeded plan, following an exceptional performance from Cerro Moro.