Project

ECOLOGICAL ALLUVIAL GOLD – Province of Jujuy, Argentina

Executive Summary

• The PROJECT OF ALLUVIAL GOLD AJEDREZ is one of the most important alluvial gold projects in Argentina due to the quality of the ore and the estimate amount of its reserves.

• Given the characteristics of this deposit, it is possible to implement the concentration and extraction of gold by conventional mechanical methods, at a very low cost, without the use of chemical products that are harmful to the environment.

• The Project is located in the well-known Gold Area Sierra de La Rinconada, to the northwest of the Province of Jujuy, and 300 km away from the capital of the province, the city of San Salvador de Jujuy.

• The Project area is of approximately 6.000 hectares, and it is located 3.900 meters above sea level. However, due to the almost lack of snow, the exploration and exploitation activities can be carried out all through the year.

• The Environmental Impact Report (EIR) for the Project’s exploration was unanimously agreed on and approved by the Provincial Environmental Management Unit of Jujuy (Unidad de Gestión Ambiental Provincial – U.G.A.M.P.). This entity is formed by more than ten (10) state organizations of the Province of Jujuy, the University of Jujuy, the Mining Workers Central Union and representatives of the native communities and indigenous peoples.

• On May 7^th 2014, the Directorate of Mining of the Province of Jujuy approved the EIR, thus authorizing the exploration activities for the Ajedrez Project.

• An intense exploration program was carried out at the beginning of 2014, being its main objective to confirm the gold potential of the Project and to define its economic feasibility.

• The main gold reserves of the Project were found in the river terraces and floodplains. The average ore grade within these exploration targets is 0.75 g/m³. Areas with more than 4 g/m³ gold were also identified.

• The results of the exploration program were very encouraging: the existence of at least 100,000 troy ounces (around 3,000 kg) of gold in the Project’s explored area (10% of the mining proprieties surface) was estimated.

• On March 2017, a pilot treatment plant was installed, therefore confirming the feasibility of gold ore concentration.

• The installment of a medium-sized mobile treatment plant within the Project area is being considered for this semester, which will be mainly equipped with centrifuge concentrators with a high rate of gold recovery in the very fine granulometry.

• The current design for the Exploitation Stage foresees the production of eight (8) to ten (10) kilograms of gold per month at the time the ore concentration equipment is functioning under regime. Provided this rate of production is maintained, the Project could have a mine life of thirty (30) years.

• The Environmental Impact Report (EIR) for the Project’s exploitation was once again unanimously agreed on and approved by the Provincial Environmental Management Unit of Jujuy (Unidad de Gestión Ambiental Provincial – U.G.A.M.P.). On December 9^th 2015, the Directorate of Mining of the Province of Jujuy approved the EIR, thus authorizing the exploitation activities for the Ajedrez Project.

• ESPIRITU DE LOS ANDES S.A. owns 100% of the mining rights of the Ajedrez Project and signed, at the end of year 2013, a Joint Venture Contract with J.E.M.S.E. (State Company for Energy and Mining of the Province of Jujuy) in the pursuit of development and growth, not only for the Company but also for the economy and welfare of the local Communities and of the areas of influence where the Project is located.

• ESPIRITU DE LOS ANDES S.A. has engaged, during the last four years, an intense task of socialization with the local Communities that inhabit the Project area, reaching a very positive and important Company-Community relationship.

• The realization of the Project can bring about considerable regional benefits that could contribute to incorporating artisanal or informal mining to the production process posed by ESPIRITU DE LOS ANDES S.A., therefore integrating it to the formal economic circuit.

• The construction and operation of a Processing Plant in the Project area could also be the link in the chain that involves the commercialization between individual or community artisanal panners and the business, thus allowing greater economic profit to the individual projects when added to a business structure. 

• ESPIRITU DE LOS ANDES S.A. plans to start producing ecological gold on the first semester of 2018.