Minera Don Nicolas Mine, Argentina

The Minera Don Nicolas (MDN) is an operational gold and silver mine located in the Santa Cruz Province, Argentina.

The mine is 100% owned by Canada-based gold production, development, and exploration company Cerrado Gold.

The project commenced operations in 2017.

In August 2020, an independent technical report for the mine was released. It was followed by a Preliminary Economic Assessment (PEA) in August 2024 exploring the expansion of the gold and silver mine.

According to the PEA, MDN project is projected 56,000 Gold Equivalent Ounces (GEO) over a five year mine life.

In August 2024, Cerrado announced the commencement of a new exploration campaign at the mine. The programme will aim for an extension of the Life of Mine (LOM) and an increase in mineral resources.

Minera Don Nicolas Project Location

The MDN gold and silver mine is located approximately 2,000km south of Buenos Aires in Santa Cruz province of the Patagonia region, in southern Argentina.

It is situated within the mineral rich Deseado Massif of Santa Cruz.

The mine consists of several tenements within a block of exploration leases totalling around 2,730km². The mining is conducted on two main areas- the La Paloma and the Martinetas. Both are approximately 40km apart.

The mine is accessible from Comodoro Rivadavia, the coastal port city. Several formed and unformed gravel roads are situated within the project site.

Cerrado Gold holds exploration rights over 330,000-hectare concessions.

Ownership and Production History

The ownership history dates back to the early 1990s when the project area was first explored after the discovery and development of the Cerro Vanguardia Gold Mine by AngloGold Ashanti and Fomicruz.

Initially, several entities explored the claim areas (cateos) within and around the MDN.

Newcrest, Yamana, Hidefield, and RYSA (a Yamana Joint Venture) conducted drilling activities on the area from 1994 to 2006.

Hidefield drilled 165 core holes in La Paloma and Martinetas between 2006 and 2009.

Hidefield and MDN were acquired by Minera IRL in 2009. In 2016, a consortium of Argentine investors purchased the project.

In March 2020, Cerrado acquired Minera Don Nicolas mine from Compania Invesora En Minas and Compania Invesora Argentina Para La Exportacion.

Mining activity at MDN commenced in 2017 with first gold was produced in the latter half of the same year. As of August 2020, the mine produced 54,600 ounces of gold and 95,700 ounces of silver.

In the second quarter of 2024, MDN produced 16,255 Gold Equivalent Ounces (GEO).

Overall, MDN operation consists of more than ten separate discovered deposits.

Geology and Mineralisation

The project is located within the mineral rich Deseado Massif in Santa Cruz province. Deseado hosts several Middle-to-Late Jurassic age geothermal and epithermal siliceous and calcareous chemical precipitates from hot springs, quartz veins, hydrothermal breccias and hydrothermal silicification.

Under Deseado Massif region, the geology is dominated by andesitic and rhyolitic volcanic and tuffaceous volcaniclastic lithologies.

The gold and silver mineralisation is hosted within low-sulphidation epithermal deposits in sub-vertical quartz-breccia veins.

The Sulfuro-Esperanza-Rocio vein system at La Paloma comprises quartz-breccia veins and the main deposit Sulfuro vein occurring as a single, well developed 2-8m thick quartz vein.

The associated sulphide minerals include pyrite, minor galena, and sphalerite.

At Martinetas, there are multiple mineralised structures found as ‘vein swarms’ with minor intervening stockwork veins and veinlets.

Minera Don Nicolas Project Mineral Resource Estimates

In the technical report published in 2020, the total (measured + indicated) mineral resources at MDN project are 1.13Mt containing 198.8koz gold at a grading of 5.49g/t and 241.9koz silver at a grading of 8.37g/t.

The inferred mineral resource estimate stands at 4.66Mt containing 348.7koz gold at a grading of 2.33g/t and 320.11koz silver at a grading of 4.78g/t.

Mining and Processing

Minera Don Nicolas Project produces from La Paloma and Martinetas via open-pit mining. The operations consist of drilling, blasting, hauling, and using own or rented equipment fleet.

Underground mining at the property is also being explored.

Mining activity involves transferring high grade open pit material for processing mined directly to the run of mine pad for processing while lower grade material is stockpiled.

A heap leach operation was added in 2023 from Calandrias Sur open pit to improve gold production.

The latest PEA focuses on the development and mining of the high grade Calandrias Norte open pit until late 2024, as well as the continuing operations and expansion of the Calandrias Sur heap leach operations until at least 2028.

The process plant, with a rated capacity of the plant is 1,000 tonnes per day (tpd), is operated by Cerrado Gold.

The process flowsheet includes conventional crushing and ball mill grinding and cyclone classification. The gravity concentration circuit in the grinding circuit recovers coarse and liberated gold using a centrifugal concentrator.

Gold is recovered from the feed material using activated carbon and after treating the material in an 8-stage CIL circuit.

The gold recovery rates is around 90% and silver recoveries at 61%.

The addition of Las Calandrias and Martinetas heap leach projects are expected to add approximately 20,000 to 25,000oz of gold production per year over a five-year period.

Key Infrastructure

The key infrastructure of the mine comprises gravel roads, a CIL plant and related facilities, a tailings storage facility, fuel storage tanks, and water facility.

A mobile 250 tonnes per hour (tph) crusher was delivered to the mine site to increase the processing capacity of the CIL plant.

The mine receives power from five 1MVA gas-fired generators. Two of these machines remain on stand-by.

A backup diesel generator is used during emergencies.

Minera Don Nicolas Project Contractors

The 2024 PEA for the project was completed by Mining consultant GeoEstima, while the independent technical report of August 2020 was prepared by SRK Consulting (Canada).

In September 2020, Cerrado selected GoldSpot Discoveries to use machine learning and data science expertise and identify new exploration targets on the gold-silver project.

In 2012, Tetra Tech was engaged to deliver a Feasibility Study (FS) of the mine.