Some info on mining in Argentina:
biz.yahoo.com
Tuesday July 14, 8:02 pm Eastern Time
Argentina's junior miners scale back activities
By Robert S. Elliott
MENDOZA, Argentina, July 14 (Reuters) - Junior mining firms have cut back their exploration activities in Argentina due to slumping metals prices, lack of any bright new discoveries and costly access to possible deposits, industry players said.
Financing capital for juniors has dried up as gold has dropped from about $360 in March 1997 to an 18-year low of $278 in January 1998. Currently, the price is around $292. Copper has sunk to a spot price of around 76 cent a lb, its lowest level in four-and-a-half years.
''Many firms have become inactive, but have maintained an office here with one or two people, waiting for the situation to get better,'' said Carlos Giustozzi, a geologist with Minera Andes, a U.S.-Canadian exploration outfit based in Spokane, Washington in the United States.
Argentina is touted as mining's ''last frontier,'' and the government expects $3.49 billion in foreign investment to funnel into the sector between 1996 and 2000.
According to official data, only four companies were exploring for minerals in Argentina in 1992, whereas by the end of 1997 more than 70 were active.
But most of the mines being developed are based on old deposits, junior mining officials said.
''What juniors thrive on is new discoveries, and there haven't been that many. It's been pretty slack considering the time and money spent,'' said Peter Baxter, exploration manager for Puma Minerals SA (PUM.V - news), part of Bema Gold Corp (BGO.TO - news).
Talking to Reuters from his office in the capital city of Mendoza province, Baxter noted that the country's largest mine, the $1.2 billion Bajo de la Alumbrera, was uncovered during a study by the government in the late 1960s.
Around the same time Agua Rica, another large copper-gold deposit due on line in 2002, was drilled by CITGO Petroleum Co's minerals division, he said.
The Pirquitas silver mine, pegged for start-up in late 2000, was worked on from 1936-1990, while the El Pachon copper deposit on the Chilean border has been known about since the 1970s.
Comparatively, Peru and Mexico have recently unveiled some ''fabulous'' gold, silver and zinc deposits, Baxter said.
The owners of Pirquitas, Sunshine Mining and Refining Co (SSC - news), are one of the few to have scored in Argentina with a gold-silver cache at Joya del Sol in southern Chubut province.
Southern Argentina also yielded the Cerro Vanguardia gold-silver mine in Santa Cruz province, which just began crushing waste. The deposit was discovered in the late 1980s.
With annual budgets that hover between $1.5 million and $7 million, junior miners are concentrating their activity in Santa Cruz and Chubut, said Baxter.
Bema, which owns half the Refugio gold mine in Chile and is developing a $70 million gold-silver mine in Siberia, just completed a drill program at its Arroyo Cascada find in Chubut.
Most minerals in Argentina are believed to run from Santa Cruz up the Andes Mountains to the high plateau below the Bolivian border. Exploration in the blustery high mountains and high desert is challenging and expensive, companies agree.
''A lot of exploration is on horseback or mule, and it's spendy,'' said Baxter. ''If you take a helicopter or light aircraft into the cordillera or altiplano you will probably die.''
Likewise, the high plateau is washed out by summer monsoons and exploration has to be carried out in winter's bitter cold, while the snow-ridden Andes offer a six-month window for work.
Driving costs up, miners approaching the mountains from Argentina have to traverse lengthy foothills before accessing the high peaks, while in Chile the trip is faster because the Andes are steeper, said an industry source.
Chile also offers more infrastructure and more towns in the high country.
Reflecting Argentina's higher price tag, reverse circulation drilling runs about $60-$65 per meter, while in Chile it goes for an average of $30-$35 per meter, Baxter said.
Cerro Vanguardia, with daily ore throughput of 2,000 tonnes at 600 feet altitude, cost $270 million. Chile's La Coipa gold-silver mine at 14,000 feet cost $220 million, he said.
Not helping foreign mining investment in Argentina is judicial insecurity regarding mineral titles, Baxter added.
Mining giant Chile has got a strong mineral exploration history and built-up infrastructure, while metals newcomer Argentina has less service companies, higher vehicle and labor costs and a lack of experienced hands, the source said.
''Geologically Argentina should be host to some rich deposits and there are a couple of them to back that up,'' Baxter said. ''It's just a matter of finding more, and it's not going to be easy.'' |
