Chilean miners keen to ramp up copper production with higher copper prices despite some opposition

By Eugene Gerden

Chile, the world’s largest copper producer, has no plans to reduce its copper output this year, despite the protests of some representatives of the local public concerned with the ongoing spread of the COVID-19 pandemic throughout the country, according to recent statements, made by the Chilean highest state officials and some local media reports.

The main reason for the state decision is the ongoing rise of global prices copper prices pushed higher by the recovering Chinese demand.

In addition, according to the Chilean authorities, so far, the pandemic has had a generally small impact on the country’s mining sector, particularly copper mining.

Last week copper once again cleared the psychologically important US$3 a pound level and, according to the majority of analysts, prices for the metal have a strong potential for even higher prices over the next several months.

In the meantime, the rising copper price has created conditions for an increase in copper production in some major global producing countries, particularly Chile.

According to the Chilean statistical authorities, in June 2020, copper production in the country amounted to 472.200 tonnes in pure metal terms, which is 0.6% less than in the same period last year. That became the first decline of the Chilean copper production since the beginning of the pandemic. In the first half of the current year, the overall copper output in the country amounted to 2.9 million tonnes – 3.7% higher than the same period last year.

The volume of copper production in the country remains stable despite the overall drop in general industrial production in Chile, which was equivalent to -9%.

Most leading local mining companies have maintained their production capacities despite sanitary measures taken to avoid prolonged production interruptions.

For example, state-owned company Codelco, the world’s largest copper producer, even increased its output by 4.7% in the first six months of 2020 on year-on-year basis.

Successful results achieved by the company this year may suspend the ongoing talks for its privatization, which were initiated in Chile in recent months.

The decision of the company not to halt its production this year; however, has also been criticized by representatives of local trade unions, which accused the company of the putting its financial performance above workers’ lives.

Representatives of the unions believe increased copper production should be suspended or at least reduced due to the current status of the country as one of main hotbeds of the pandemic. This is reflected by official statistics, according to which the number of COVID-19 cases in Chile as of the end of August has already exceeded 400,000, with 10,000 people having died.

Most producers and authorities, however, continue to insist that the level of the spreading of the disease in the mining sector remains insignificant, which means there is no need for massive suspensions of production.

According to the Chilean Minister of Mining Baldo Prokuritsa, the industry has the lowest infection rate in the country among the other sectors of industry, which is reflected by the official statistics, according to which of the 225,000 of its workers only 2% were infected with COVID-19.

Prokuritsa added, “It’s quite unfair to call mining companies a hotbed of the coronavirus, as it’s not true. Moreover, the professional community is making colossal efforts to stop the problem.”

Indeed, to combat the pandemic, some 200 Chilean mining companies have implemented 14-day work shifts and conducted more than 140,000 coronavirus tests. In addition, about 32,000 workers were demobilized (which was in the form of temporarily suspension of their contracts) or transferred to remote working regime.

Despite the fact that the volume of copper production in the country remaining generally stable, some projects have been suspended in recent months, including Chuquicamata, one of the largest copper mines in the country which produces more than 320,000 tonnes of copper per year.

Currently the production of copper accounts for more than 10% of Chile’s GDP (predicted to decline by 7% this year), which makes the industry one of the most important for the Chilean economy.

Most analysts expect global copper prices will continue to rise during the next several months due to the lack of supply.

A member of the Grosso Group, Golden Arrow Resources Corp. [GRG-TSXV: GARWF-OTCQB; G6A-FSE] pioneered the mineral exploration industry in Argentina and has operated there since 1993. The company is also exploring mineral projects in neighbouring Chile and Paraguay.

In Argentina, Golden Arrow is currently exploring the Flecha de Oro Project in Rio Negro Province. To date, company geologists have delineated a new high-grade gold target on the Esperanza property at Flecha de Oro. This target includes a series of sub-parallel quartz veins in an apparent structural corridor that was mapped over 230 metres in length and up to 30 metres of width, and remains open in both directions along strike.

Highlights from sampling include 24.4 g/t gold and 13.6 g/t silver from a float/boulder sample;

5.23 g/t gold and 32.3 g/t silver over 0.30 metres from a vein chip sample, and 4.3 g/t gold and 2.3 g/t silver over 0.30 metres from a vein chip sample.

The Flecha de Oro Project comprises three separate property packages, Puzzle (1,952 hectares), Esperanza (9,968 hectares) and Maquinchao (2,000 hectares) for a total tenure position covering 13,920 hectares in an area prospective for large epithermal precious metal deposits.

Golden Arrow recently entered into an option agreement for a new area called Maquinchao, adding an additional 2,000 hectares to the Flecha de Oro epithermal gold project. The property appears to host a high-sulphidation epithermal gold-copper-silver system. Due diligence sampling included 10 rock chip samples from outcrops with values up to 11.0 g/t gold, 0.63% copper and 43 g/t silver.

Expanding its exploration operations, Golden Arrow has acquired, via staking, the Rosales Copper Project in Region III, Chile.

Brian McEwen, P.Geo., VP Exploration & Development commented, “Following the success of our Chinchillas silver project in Argentina, GRG’s strategy was to find another project and repeat the model of advancing it from drill holes to PEA quickly and efficiently before finding a partner or a buyer.”

He pointed out that Chile, which is arguably one the most prolific mining countries in the world, was a good target to find such a project.  The country has well developed infrastructure, is mining friendly and projects can be advanced quickly. “Our technical team has a lot of experience working and exploring in Chile, so it made sense to evaluate the potential. The company looked at many projects and continues with that search. In our quest to find an advanced project, we came across open concessions and were able to stake them ourselves,  so there no vendor payments to be paid and we hold the concessions outright.  We now have approximately 2,500 hectares of highly prospective copper project. Our initial sampling has delineated three zones with copper grades of up to 5% Copper. We have just begun a second phase of surface work and believe there is good potential to discover something significant. ”

Given the limitations of travel due to the pandemic, Golden Arrow hired senior Chilean geologists to follow up on several advanced projects under confidentiality agreements.

Initial reconnaissance work indicates that Rosales has several priority target areas characterized by zones of near-surface copper stockwork mineralization, potentially related to larger mineralized systems at depth. Initial sampling results from the project returned high-grade values up to 5.74% copper.

The Rosales Project is adjacent to the producing small-scale underground Margarita mine, which exploits a copper stockwork zone with malachite-azurite-cuprite-chalcocite mineralization. The Margarita mine lies along a structural trend that continues to the southwest onto the Rosales Project.

The 1,450 hectare Rosales Project is road-accessible and is situated less than 90 kilometres from the mining centre of Copiapo.

Golden Arrow’s Phase 1 exploration program at Rosales will include detailed mapping and sampling, as well as ground magnetics and IP/resistivity geophysical surveys.

In Paraguay, Golden Arrow is conducting a 500-metre diamond drilling program at the Tierra Dorada gold project. The program is focusing on the Alvaro target area, where multiple vein showings have returned high-grade gold from surface and trench sampling. Highlights of previously announced results in the area include boulder and vein samples returning 47.4 g/t gold, 13.7 g/t gold, as well as 89.5 g/t gold and 61 g/t silver over 0.93 metres, including 143.40 g/t gold and 95.8 g/t silver over 0.58 metres, in Trench 1 at Showing 1.