La Zarza
 
Summary
  • Ormonde has a 100% interest (subject to staged payments to local Spanish company Nueva Tharsis S.A.) in a mining concession at La Zarza which covers a total area of 12.8 square kilometres in the Iberian Pyrite Belt. The Mining Concession is currently held in the name of Nueva Tharsis S.A.

  • The concession covers a polymetallic masive sulphide body dominated by pyrite but containing significant zones of copper, zinc and gold mineralisation.

  • In 2008, the Company completed a feasibility study on developing an underground mine recovering copper, lead, zinc, gold and silver in to metal concentrates via flotation. The study recommended that the potential for further copper resources be investigated to improve the project economics.

  • From October 2009 to November 2012, exploration activities were funded by Antofagasta Minerals SA through an Option Agreement whereby Antofagasta could earn an initial 51% interest in Ormonde’s holdings.

  • Based upon the activities carried out in 2010, a preliminary non-JORC compliant global mineral resource of some 61Mt, grading 0.8% Cu, 0.9g/t Au, 0.6% Pb, 2.0% Zn & 5.7g/t Ag, was estimated at La Zarza.

  • In 2011-2012, activities focussed on the area surrounding La Zarza deposit.

  • In November 2012 Antofagasta withdrew from the Option and retained no interest in the La Zarza Project.

  • Ormonde is currently working with Nueva Tharsis on a potential arrangement that would see Ormonde divest all its interest in La Zarza to Nueva Tharsis or a third party.
Detailed Information top

Location: Huelva Province, Andalucia Region, in the Iberian Pyrite Belt mining district in southwest Spain, some 50 kilometers north of Huelva and 90 kilometers northwest of Seville.

Ownership: Ormonde, through its wholly-owned subsidiary Ormonde Espana SL (“OESL”), has a 100% interest, subject to staged payments to local Spanish company Nueva Tharsis S.A., in a mining concession which covers a total area of 12.8 sq kilometers. This concession is held by Nueva Tharsis, Ormonde’s underlying joint venture partner. In addition, OESL has a 100% interest in four Investigation Permits covering a total area of 95 square kilometres, along strike to the east and west of the La Zarza concession (with no underlying arrangements).

Current Status: Review of all data following the withdrawal of Antofagasta from an Option Agreement in November 2012.

Ormonde commenced activities in the La Zarza Project in June 2004 through a Joint Venture with a local company Nueva Tharsis. The extensive drilling and metallurgical work programmes carried out by Ormonde culminated in a feasibility study on a 600,000 tonne per year (tpa) underground mining operation, treating four “ore-types” and recovering copper, gold, silver, zinc and lead in four concentrates. This study was completed in the first quarter of 2008. The capital costs estimated in the study were higher than anticipated and resulted in a decision to investigate options to improve the project economics.

A detailed exploration programme funded by Antofagasta has been completed on the La Zarza Concession and surrounding Investigation Permits.

Mining History top

The La Zarza area was historically mined for pyrite between 1867 and 1991 through two mines, the La Zarza Mine, and the immediately adjacent Perrunal Mine,. The history of the underground operations at Perrunal is not well documented. However, records show that annual production at La Zarza peaked at 680,000 tonnes in 1930.

The large massive sulphide body (over 110 million tonnes) at La Zarza/Perrunal was partially mined by both open pit and underground mining for the production of pyrite to serve as a raw material to produce sulphuric acid (Fig-2 & 3). These pyrite mining operations avoided the adjacent base metal and gold “Silicatado” zones, the subject of Ormonde’s work, as the former were treated as a contaminant to the pyrite and the sulphur content of the latter was too low for acid production.

The La Zarza pyrite mine was developed for underground tracked extraction at a 600,000 tonne per year (tpy) production rate, with 5 main levels developed over a strike length of approximately 1,500m, from close to surface to a depth of approximately 180m. Underground mining involved large (500m long, 30m wide by up to 60m high) longitudinal, cut-and fill stopes in very competent ground. The pyrite was crushed underground, hoisted to surface via No 5 Shaft and transported, without any further treatment, by rail to Huelva for processing into sulphuric acid. As a result of this method of working, there was no processing plant or tailings facility on site. The large underground stopes were backfilled with waste rock mined from a number of shallow surface pits. The underground mining operation was eventually supplemented by the development of an open pit operation adjacent to the main hoisting shaft. A downturn in the sulphuric acid market in the late 1980s forced the cessation of mining. The underground workings are presently flooded.

Unexploited gold and copper resources within the 'Silicatado' geological unit at the La Zarza Pyrite Mine were evaluated by SEIEMSA (a joint venture between BRGM and Normandy Mining) during the mid 1990s, but the then low prevailing metal prices limited the evaluation exercise. Ormonde acquired the Project in June 2004 through a Joint Venture with a local company, Nueva Tharsis S.A.L., and has held a 100% interest in the venture since July 2007.

Geology & Mineralisation top

The overall geology at La Zarza consists of a sequence of volcanics and sediments which dip steeply to the north and which host the massive volcanogenic sulphides, which are up to 110 metres thick. This sequence is cut by steeply dipping thrusts which lie parallel to the stratification.

The mineralisation at La Zarza has been established as being contained in two east-west striking geological units:

  • The Silicatado unit, a quartz-pyrite formation with a strike length of some 500 metres which contains gold-rich and copper-rich zones, the Gold-Silicatado and Copper-Silicatado respectively. Various drilling programmes have established that the Gold-Silicatado can be further divided into two “types”, the High Sulphur Gold-Silicatado and the Low Sulphur Gold-Silicatado. The Silicatado unit ranges up to 70metres in true thickness and is open at depth and to the north.
  • The Massive Sulphide, a volcanogenic sulphide unit, which has a strike length of at least 1,500 metres and is up to 110 metres thick. This unit was previously mined for pyrite. Ormonde’s drilling has established that thick concentrations of base metals reaching economic grades are developed within this unit. These base metal enriched areas include a Western Copper Massive Sulphide Zone located below the open pit and a Lower Zinc Massive Sulphide Zone. Both of these zones are open to the west and at depth.

The Structural and mining relationships from south to north and from footwall to hangingwall are shown on the cross-section (Fig-4) and on the longitudinal projection (Fig-5).

Mineral Resources top

A Mineral Resource Estimate, largely based on the closer spaced drilling in the Silicatado unit, was prepared by CSA Australia Pty Ltd in 2007 and reported under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2004 edition). These Mineral Resources are as follows:

Indicated Resources

CATEGORYCut-offMtCu %Pb %Zn %Au g/tAg g/t
Copper Silicatado1.5% Cu2.642.10.51.50.930.2
Gold Silicatado2.0g/t Au2.550.61.52.13.752.6
Zinc Massive Sulphide3.5% Zn4.390.61.04.40.835.2
Copper, Zinc and Gold Massive Sulphide0.280.91.02.92.153.0
Total Indicated9.881.01.03.01.638.9

Inferred Resources

CATEGORYCut-offMtCu %
Copper Massive Sulphide (West)1.5% Cu1.301.9

The La Zarza Mineral Resource estimate was completed under the overall supervision and direction of Mr. Gerry Fahey MAusIMM (CP), MAIG, who is a Competent Person as defined by the JORC Code (2004 Edition).

In 2010, the Ormonde-Antofagasta JV prepared an in-house, preliminary, non-JORC compliant, global mineral resource estimate based upon a new structural interpretation for the combined Massive Sulphide and Silicatado units. This totalled some 61Mt grading 0.80% Cu, 0.9g/t Au, 0.56% Pb, 1.96% Zn and 5.7g/t Ag (1.34% CuEq cut-off). The estimate includes the results of four new holes drilled by the joint venture .This new resource includes the higher grade Silicatado portion of the deposit which formed the bulk of the CSA resource estimate in 2007.

Feasibility Study top

In 2008, a feasibility study on developing a mine at La Zarza was carried out by internationall consultants under the management of Aker Kvaerner Engineering Services Ltd (now incorporated into Jacobs Engineering Group Inc). This study designed and costed: 

  • the mine dewatering facilities
  • an underground mine with decline access
  • a mechanised long-hole open-stoping mining method at a 600,000 tonne per year production rate, with paste backfill
  • a processing plant which would produce four concentrates, copper-gold, copper, lead and zinc
  • a paste tailings and backfill plant
  • related services and infrastructure at La Zarza.

Mining
The planned underground mine was designed for surface decline access and ore transportation by trucks at a rate of 600,000 tpy. Ground conditions in the mine area are known to be very good. Underground development would be by mechanised diesel-hydraulic mobile plant. Ore would be mined using long-hole and bench open-stoping mining methods, with use of paste backfill to minimise surface tailings and maximise ore recovery.

While it is expected that an underground mine at La Zarza would have negligible ground-water inflow during operations, the old workings are presently flooded and dewatering would be required prior to any underground development. In estimating the extent of this exercise, it was necessary to assume that the La Zarza workings will have a direct hydraulic connection to the adjacent, flooded, Perrunal Mine. Sampling to estimate the pH and metal content of the water in the old workings yielded very variable results. It was deemed necessary to assume the more adverse metal concentrations in the water when designing the water treatment plant.

Mineral Processing
The Extensive metallurgical testwork carried out as part of the Feasibility Study resulted in considerable advances in the ability to produce clean copper-gold, copper, lead and zinc concentrates at good recoveries from four mineralisation types at La Zarza. This testwork also indicated that a viable paste backfill could be produced from the finely ground tailings. The process plant design arising from the testwork is for a conventional comminution circuit comprising primary and secondary crushing followed by a three stage primary grinding circuit. The proposed 600,000 tpy capacity circuit comprises rod and ball milling followed by stirred mill detritors. Milling circuit discharge would feed into three sequential differential flotation circuits, each of which would have facilities for regrinding followed by concentrate thickening and pressure filtration to yield four saleable concentrate types.

A paste tailings and backfill plant is incorporated into the processing plant design.

Feasibility Evaluation & Recommendations

The fesibility study recommended that the potential for further copper resources should be investigated to improve the project economics. In 2009, Ormonde entered into the joint venture with Antofagasta to investigate the possibility of defining a significantly larger copper resource at La Zarza. Antofagasta withdrew from the Venture in 2012.