Total production for the Americas region in 2019 declined to
710,000oz compared with 776,000oz in 2018, a result of production
declines at all three operations.
At AGA Mineração, performance at Cuiabá was impacted by poor
ground conditions where, to ensure safe production, the rate of
mining was slowed while a new surface support regime and mine
sequencing plan were introduced. Early indicators show these new
controls to be successful and condition monitoring will be ongoing as
mining progresses in the deeper, higher grade areas.
At the Córrego do Sítio complex, geological model changes, open
pit licence delays for the Rosalino orebody, geotechnical issues and
unexpected heavy rains in the last two months of the year delayed the
development and mining of the planned open pit mining areas.
At Serra Grande, the slightly lower production level in 2019 was due
to lower feed grades, particularly in the second half of the year, and
reduced drilling productivity and fleet availability. This was partially
offset by higher tonnage treated following the Mina III pushback.
Cerro Vanguardia’s production was negatively affected in the second
half of the year by the planned lower grades mined and a 42% decline
year-on-year in silver production. This was partially compensated for
by a higher average silver price.
The total cash cost for the region for the year was $736/oz in 2019
(2018: $624/oz) and the AISC $1,032/oz (2018: $855/oz). The
increased costs were largely due to the decline in ounces sold,
reduced silver by-product revenue from Cerro Vanguardia and
inflation. The inflationary pressures which affected both Argentina
and Brazil, included increases in wages, operational materials, this
coupled with impact of changes in the estimation of rehabilitation
provisions for the Brazilian operations as required by the new
legislation. This was slightly offset by weaker currencies.
Total capital expenditure for the region was $195m, compared to
$176m in 2018, with the increase largely driven by higher spend
in Colombia on feasibility study work at Quebradona. Sustaining
capital expenditure was spent mainly on Ore Reserve development
at underground operations in Brazil and Argentina. At Cerro
Vanguardia, capital expenditure for the year was spent primarily
on development work and larger trucks to increase hauling and
loading capacity, and to ultimately improve productivity.
Serra Grande is our only operation in Brazil with an upstream TSF.
The current dam, which has a reinforced wall, will be converted to
dry stacking as per the mine plan. Following the implementation of
new legislation, the process will be accelerated. Decommissioning
is expected to begin in September 2021 to ensure we comply with
the revised legislation.
Growth and improvement
In Brazil, the strategy is to enhance mining flexibility and
predictability by investing in Ore Reserve development, along with
Mineral Resource and Ore Reserve conversions. More brownfields
exploration is planned to increase the Ore Reserve and related
confidence levels. This work will be vital in the upcoming year.
During 2019, Serra Grande transitioned to full owner development
and development metres achieved increased by 10% compared
to 2018 levels. At Cuiabá, a new international contractor in the
Brazilian market was signed on in March 2019 and has to date
delivered a 28% year-on-year increase in metres developed.
Cuiabá is also investigating the potential of new orebodies and a
plan for deepening the mine.
At Córrego do Sítio (CdS) the focus is to re-open the CdS II
underground mine. Along with a focus on Mineral Resource
conversion and stabilising production, CdS will invest in looking at
the potential of CdS III and the Rosalino open-pit expansion.
At Serra Grande, Palmeiras South underground mine is expected
to commence delivering ounces in the first half in 2020.
In Argentina, Cerro Vanguardia, which has been in operation for over
20 years, is expected to see a reduction in grades from the open pit
mines and lower contributions from silver compared to the previous
years’ levels. To sustain the production plan, exploration will focus on
converting new and already existing blue sky tangible and Inferred
to Indicated Mineral Resource around current pits and underground
operations in the main production zone. The exploration plan
includes 25,000m of diamond drilling hole campaign, channels,
trenches, geophysics surveys, among others.