La India is a gold and silver project located in the municipality of Sahuaripa, Sonora State, Mexico. The area is characterized by steep valleys ranging between 1,200 m to over 2,000 m above sea level. The deposit is located in the Sierra Madre Occidental province, a 2 km thick volcanic field composed of older andesite and dacite and a younger pyroclastic rhyolite. The low grade, near surface nature of the deposit makes it suitable for open pit extraction.
La India is designed as three pits, North, Central, and Main, extending to a depth of 176 m to 304 m with 45° inter-ramp angle. The stripping ratio of waste to ore is 0.99:1, producing 44.6 Mt of ore at 0.65 g/t gold over its eight year mine life. The ore will be crushed and then heap leached. Due to the need to build inventory for heap leaching, ounce production is delayed at the start of project. A conservative estimate of 80% was used instead of the 85.1% achieved during testing. Average LOM cost is US$8.28/t (net of silver credits). The project generates an after-tax NPV5% of US$207M and IRR of 31%.
| Classification | Tonnes (‘000 t) | Grade (g/t) | Ounces (‘000 oz) |
|---|---|---|---|
| Reserve | 44,639 | 0.65 | 930 |
| Resource (M+I) | 27,243 | 0.50 | 435 |
| Inferred | 103,409 | 0.34 | 1,144 |
La India’s Reserve is 930 koz and M+I Resource is 435 koz. While it does not have a sizable deposit, the strength of La India lies in its spatial characteristics. Surface expression as an outcrop allows for good geological understanding. The key benefit is that this allows for minimal waste stripping. Stripping ratio and the need to move waste is typically the key constraint for open pit mines. Unfortunately, this surface exposure also means that the “open at depth” opportunity may be less likely for this deposit. The use of heap leaching, while low in recovery, also allows for low cost operations. With a cutoff grade of 0.20 g/t, the risk of failing to achieve the Reserve is low and provides opportunity to upgrade M+I Resource into Reserve category. La India does not promise a large number of ounces per year nor a long production life. What it does offer however, is simple, low-cost, mining, the perfect deposit for a small or growing producer. Whether this fits the current juggernaut that Agnico Eagle has grown itself into, only time (or the board) knows.
The information presented above does not constitute investment advice. This is a summary from the NI43-101 Technical Report effective Aug 31, 2012 (INSERT), with commentary from the author. Statements above do not represent the views of Agnico Eagle. If any discrepancies arise, the information contained within the NI43-101 are official and final. For latest depletion data, please refer to the AIF update.