“Lessons Learned from the Copper Industry Applied to Gold Extraction”

John O. Marsden

Keynote Presentation at World Gold 2009 Conference, Johannesburg, South Africa, October 30th, 2009

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Overview

• Introduction

• Managing the innovation process

• Cost control & business improvement

• Material Characterization

• Comminution

• Biological heap leaching

• Pressure leaching of copper-gold concentrates (& ores)

• Flowsheet innovation

• Conclusions

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Introduction – The Copper Industry

• Large volume– 17 million tons per year copper production

– Typical ore value between $20 and $40/ton ($2.00/lb)

• Supply-demand balance, cyclical by nature

• Cycle periodicity is 6-9 years

• Cycles drive major business trends– Exploration, new mine development, mine closures,

process improvements, R & D, technology innovation

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Copper Price for 1900-2008

Introduction – The Gold Industry

• Small volume– 2,600 tons per year gold production

– Typical ore value between $50 and $200/ton ($750/oz)

• Supply-demand balance plays lesser role

• Global/regional financial conditions, political stability, future global economic outlook are major drivers

• Near term pricing and changes tend to play a dominant role in industry developments ……………… but should they?

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Gold Price for 1900-2008

Drivers for improvement & innovation

• Changing value of metal in today’s currency?

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Drivers for improvement & innovation

• Changing value of metal in today’s currency?– Depends on point in the cycle – Do sustained high prices or sustained low prices drive

innovation?

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Drivers for improvement & innovation

• Changing value of metal in today’s currency?– Depends on point in the cycle – Do sustained high prices or sustained low prices drive

innovation?

• Declining ore grades– Between 1988 and 2006, average copper head grade

declined from 1.08% to 0.84%– 22% decrease in grade; 45% decrease in margin

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Drivers for improvement & innovation

• Changing value of metal in today’s currency?– Depends on point in the cycle – Do sustained high prices or sustained low prices drive

innovation?

• Declining ore grades– Between 1988 and 2006, average copper head grade

declined from 1.08% to 0.84%– 22% decrease in grade; 45% decrease in margin

• Increasing complexity of ores– Increased capital and operating costs– Decreased metallurgical recoveries

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Drivers for improvement & innovation

• Changing value of metal in today’s currency?– Depends on point in the cycle – Do sustained high prices or sustained low prices drive

innovation?

• Declining ore grades– Between 1988 and 2006, average copper head grade

declined from 1.08% to 0.84%– 22% decrease in grade; 45% decrease in margin

• Increasing complexity of ores– Increased capital and operating costs– Decreased metallurgical recoveries

• Quality of people– Limited availability of graduates– Losing expertise through retirements Metallurgium

TM

Drivers for improvement & innovation

• Burning platform syndrome– Necessity is the mother of invention

• Gold industry challenges– Difficult to replace ore reserves

– Limited ore resource opportunities

– Severe competition amongst gold producers for resources and reserves

– Declining ore grades, fixed tails grade effects

– Increasing ore complexity

– Availability of expertise and skills

– Increasing energy cost

– Environmental and social pressures

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Managing the Innovation Process

• Experienced, dedicated and self-motivated staff to lead

• Centralized, applied technology development group– Operations do not have the time, resources nor imperative

• Develop & maintain strategic plan for innovation

• Well-coordinated, operationally-focused approach– Operators involved at every step

• Strong focus on effective commercial application/ technology transfer

• Communicate process clearly and often

• Make timely go-no go decisions

• Every innovation needs a champion

Risk-Benefit Profiling

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Low Value, Low Risk

Lower Impact Decisions

Low Value, High Risk

Easy Negative Decisions

High Value, High Risk

Highest Impact Decisions

Relative Risk Profile

Val

ue C

reat

ion

Pot

entia

l

High Value, Low Risk

Easy Positive Decisions

Cost Control & Business Improvement

• Several initiatives implemented in copper industry– “Continuous Improvement”

– “Six Sigma”

– “Lean Production”

• Establish leadership and accountability

• Determine what process to be used

• Define how the initiative will be executed

• Establish metrics to measure progress

• Set a timeline for execution

• Measure and communicate results regularly

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Improvement in Operating Efficiency

• Reduction in operating cost of existing process

• Improvement in metal(s) recovery

• Increase in throughput– Debottlenecking or expansion

• Improvement in ore quality (grade) to process

• Implementation of a new technology

• Other improvements – Safety, health & environmental

– Sustainable development

– Social responsibility aspects

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Business Improvement Initiatives

• Team-based approach

• Rank and prioritize opportunities

• Cross-functional; cross-operations

• Cost-center focus

• Best practices – identification/implementation

• Benchmarking

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Material Characterization

• A core competency in our business

• Improved process design capability

• Improved ore routing within the mine

• Improved diagnostic capability (trouble-shooting and problem solving)

• Improved process optimization

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Material Characterization

Material Characterization

TickMarks

Triangle lines

COR AC2

COR AC3

MET AC3

MET AC4

MET AC5

NWX AC2

NWX AC3

NWX AC4

NWX AC5

Ksp

Qz

Se

TickMarks

Triangle lines

COR QSAC1

MET QSAC1

MET QSAC2

MET QSAC3

NWX QSAC1

NWX QSAC2

Ksp

Qz

Se

TickMarks

Triangle lines

COR QSAC1

MET QSAC1

MET QSAC2

MET QSAC3

NWX QSAC1

NWX QSAC2

Ksp

Qz

Se

Alteration Codes – Visual Logging Data QemSCAN Alteration Codes – QemSCAN Data

QemSCAN Alteration Codes – XRD DataPrecision and

accuracy of data

greatly improved

Benefits to:

Ore control & ore type routing

Process control

Mine design & sequencing

Plant design

Comminution

• Scales of economy

• Optimal grind size for NPV versus cash flow

• Stirred milling

• High pressure grinding rolls (HPGR)

• HPGR and stirred milling

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Candelaria, Copiapo, Chile

Candelaria – 80,000 mtpd

Grind Size versus Recovery

• Do you know the optimal grind size?

• What metal price are you using?

• How well is your process controlled?

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Chino, New Mexico

Chino Grinding Optimization

• Optimal grind size was 80% -150 microns• Actual grind size through the 1980’s and into the 1990’s was

80% -300 microns– Approximately 8-9% copper recovery difference

• Added four VTM-1250 Vertimills as a tertiary grinding stage– 20-25% energy improvement vs. ball milling

• Design modifications were critical for success– Height:diameter ratio reduced– Shaft strengthened– Door access modified– Slurry entry point changed

• VTM-3000 (and larger) in design

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Chino, New Mexico

High Pressure Grinding Rolls

• Cerro Verde milling circuit incorporates high pressure grinding rolls (HPGR) instead of SAG mills– 108,000 mtpd– Four 2.4 x 1.6 m HPGR’s

• Advantages vs. SAG mills– Improved energy efficiency

• 2.4 kWh/t vs. 12.0 kWh/t – Greater flexibility– Lower unit cost

• Disadvantages vs. SAG mills– Additional capital cost

• Significant financial benefit

Cerro Verde, Arequipa, Peru

HPGR at Cerro Verde

HPGR at Cerro Verde

Biological Heap & Stockpile Leaching

• Ore stacking systems

• Air injection distribution

• Solution application rate & distribution

• Solution chemistry control

• Temperature control

• Bacteria developments

• Heap modelling & simulation

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Morenci Biological Heap Leach – 85,000 tpd

Morenci Biological Heap Leach – 85,000 tpd

Cerro Verde Biological Heap Leaching

Pressure Leaching of Cu-Au Concentrates

• Potential application to treat sulphide copper-gold ores

• High temperature and medium temperature applications

– 210-225°C versus 150-165°C

– Elemental sulphur formation and effect

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Elemental Sulphur Formation

Proportion of

sulfide sulfur in

feed converted to

elemental sulfur (%)

Concentrate Leaching at Bagdad, Arizona

• 55,000 tpy copper sulphide concentrate

• High temperature pressure leaching at 225°C

• Integrated with copper heap leaching, SX and EW circuit

Concentrate Leaching at Morenci, Arizona

• 200,000 tpy copper sulphide concentrate

• Medium temperature pressure leaching at 160°C

• Super-fine grinding to 98% <15 µm; 80% <7 µm

Concentrate Leaching – High Temperature

Slurry

Formation

Pressure

Leaching

Flash

Let Down

Solid/Liquid

Separation

Neutralization

Tailings

Disposal

Gold/Silver

Bullion

Cathode

Copper

Heap/Stockpile/Tank*

Leaching

Solution

Extraction

ElectrowinningPrecious Metals

Leaching/Recovery

Water

Lime

Cooling

Water

(optional)

500

25

28

2

4000

1.5

3

4

4500

4.1

5.8

3.8

4500

0.33

11.6

3.8

Concentrate

1,000 mtpd

*Tank includes vat or agitated

or stirred leaching vessel

Flow (m3/hr)

Cu (g/L)

H2SO4 (g/L)

Fe (gpl)

Feed

Solids

LEGEND:

Concentrate Leaching – Medium Temperature

Slurry

Formation

Concentrate

1,000 mtpd

Pressure

Leaching

Flash

Let Down

Solid/Liquid

Separation

Neutralization

Tailings

Disposal

Gold/Silver

Bullion

Water From Tailings

(optional)

Super Fine

Grinding

Lime

Cathode

Copper

Solution

Extraction

Electrowinning

Acid

Partial Solution

Neutralization

Limestone

and/or Lime

Raffinate to Cooling Solution

Raffinate to Neutralization

Precious Metals

Leaching/Recovery

266

50

20

2

26

4

73

2

240

4

73

2

*Tank includes vat or agitated

or stirred leaching vessel

Flow (m3/hr)

Cu (g/L)

H2SO4 (g/L)

Fe (gpl)

Solids

Solid/Liquid

Separation

Solids

266

50

2

2Solids

LEGEND:

Water

Options for Gold & Silver Recovery

• After high temperature pressure leaching

– Neutralization and cyanide leaching

– Hot lime boil to enhance silver extraction

– CIP/CIL

• After medium temperature pressure leaching

– Neutralization and cyanide leaching • Accept high cyanide consumption (2-4 kg/t)

– Sulfur removal followed by cyanidation• Molten sulfur filtration

• Other methods

– Thiosulfate leaching• Utilize copper in system

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Innovation in Flowsheet Design

• Integration of milling & cyanide leaching with heap leaching in gold

• Integration of milling, flotation & concentrate leaching with heap leaching in copper

• Copper-gold ore pressure leaching options

– Treatment of rougher concentrates • Lower grade, higher recovery

– Selective flotation• Pyrite/chalcopyrite/chalcocite separations

– Co-extraction of uranium, other metals

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Chimney Creek Flowsheet (Nevada)

Conclusions

• Significant opportunities exist to apply lessons learned from the copper industry (and others) to gold

• Managing the innovation process• Cost control & business improvement• Technological advances

– Material characterization– Comminution– Biological heap leaching – Concentrate leaching

• Innovation in flowsheet design– Critical for complex, lower grade ores

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