29
Projects Report
Geology
The silver and gold mineralisation is hosted 
within tertiary-aged volcanic units at Arqueros 
and Teterita, and in Paleozoic sediments at 
Chimberos. The alteration and mineralisation  
are all Miocene in age and associated with the 
Cerros Bravos paleovolcano.
Mineralisation comprises two main compo -
nents. Silver-rich horizontal units termed 
‘mantos’ (Spanish for blanket) and a series of 
near-vertical, cross-cutting gold-rich structures. 
The mantos silver mineralisation is hosted by 
vuggy silica within dacitic lapilli tuff. Mantos 
occurs at Arqueros and Teterita where the 
mineralising process has replaced horizontal 
porous tuffs. At Chimberos, silver mineralisation 
is hosted in vuggy silica hydrothermal breccia 
superimposed on folded Paleozoic sediments.
The vertical gold-rich mineralisation, also charac -
terised by vuggy silica, is well-developed at 
Arqueros. It has been interpreted as feeders for 
mineralising fluids. Nonetheless, this style of 
mineralisation has not yet been observed at 
Teterita and is poorly preserved at Chimberos.
Resource
Kingsgate has updated the project resource  
base to incorporate the recent drilling on the 
Chimberos project and using the current gold/
silver ratio of 60 (previously 45) for its gold 
equivalent (AuEq60) and silver equivalent 
(AgEq60) calculations.The combined Measured, 
Indicated and Inferred mineral resource for the 
Nueva Esperanza Project is based on resource 
block modelling of Arqueros, Chimberos and 
Teterita, and has been estimated at a cut-off 
grade of 0.5 grams per tonne (g/t), gold equiva-
lent (AuEq60) to be 28.9 million tonnes at 
0.27 g/t gold and 84 g/t silver.
This represents about 250,000 ounces of gold 
and 78.5 million ounces of silver. 
The Measured, Indicated and Inferred resource 
may be expressed in gold or silver equivalent 
ounces as:
〉〉 Gold equivalent ounces (AuEQ60): 1.6 
million ounces at 1.7 g/t gold equivalent; and
〉〉 Silver equivalent ounces (AgEQ60): 93.5 
million ounces at 100 g/t silver equivalent.
Feasibility Study
A Definitive Feasibility Study commenced on the 
project at the end of May 2011 with the focus 
on Arqueros, and open pit mining of that deposit 
with processing by traditional mill and agiitation 
leaching in cyanide. Subsequent acquisition of 
the Teterita and Chimberos deposits resulted in 
an expansion of the feasibility study to incorpo-
rate their resources.
In late 2012, a decision was taken to examine 
lower cost options for processing using heap 
leaching. With major engineering already done, 
technical studies focussed on metallurgical 
testwork and heap leach design. It has been 
established that the mineralisation from the 
three deposits can be processed by HPGR (High 
Pressure Grinding Rolls) crushing and heap 
leaching with silver and gold recoveries of the 
order of 70% to 75% for silver and 65% to 70% 
for gold. The project development plan is now 
focussed on a 3 million tonne per annum heap 
leach operation with an initial mine life of over 6 
years. Annualised production levels (post ramp-
up) are estimated at 6.0–8.0 million ounces of 
silver and 18,000–22,000 ounces of gold, at an 
indicative start-up capital cost between 
US$130–150 million (inclusive of 25% 
contingency).
These project parameters are based on prelimi-
nary results only and are insufficient to provide 
assurance as to the economic development of 
the project at this stage and these parameters 
may also change following completion of the 
Definitive Feasibility Study.
With the technical and economical feasibility of 
heap leaching being established, the project will 
now move into the final feasibility and design 
stage with results expected to be available 
during the March quarter 2014.
The environmental permitting process for the 
original Arqueros project has been completed, 
with approval to commence construction and 
mining granted by the Chilean authorities.