Cotabambas Project

The Cotabambas project is a porphyry copper-gold-silver deposit, located 48 km south west of the city of Cusco, in the Apurimac region in Southern Peru.

The Cotabambas project is comprised of two clusters of mineralized areas:

  • Cluster 1 - located in the northeast area of the property has six mineralized porphyries covering an area of 3km x 6km, hosted by an igneous/volcanic environment; and
  • Cluster 2 - located in the central and southwest area of the property where the mineralized porphyries intrude the contact between the diorite batholite and limestones generating skarn mineralization.

To date, 98% of the exploration drilling is concentrated in Cluster 1 and the potential in the skarn zones has only recently began being drilled.

The geologic studies include three exploration campaigns, three mineral resource estimates by three independent engineering companies between 2007 to 2014, and a Preliminary Economic Assessment filed in April 2015 and updated in September 2015.


Antofagasta Minerals, 1995 to 2002

In 1995, Anaconda Perú S.A., a Peruvian subsidiary of Antofagasta Plc (Antofagasta), carried out mapping, soil and rock geochemical sampling programs, and geophysical surveys over the Ccalla, Ccochapata, Azulccacca, and Guaclle exploration targets in Cluster 1 of the Project.

The first diamond drill testing and surface soil and rock geochemical and geophysical anomalies testing begin in July 1996. Intermittent drilling continued until April 2000. In this period a total of 24 drill holes totaling 8,538 m were completed, with numerous mineralized intervals intersected. The results were reported on internal company reports by Val d’Or (1996) and Perello et al. (2001).

Cordillera de las Minas, 2002 to 2006

Antofagasta and Companhia do Rio Vale Doce (CVRD) formed a joint venture company called Cordillera de las Minas (CDLM) in 2002, and transferred ownership of several groups of exploration concessions in southern Perú to CDLM.

From 2002 to 2006, CDLM carried out additional mapping, surface rock and soil geochemical sampling, induced polarization (IP) surveying, magnetometer surveying, and diamond drill testing of previously identified geological, geochemical, and geophysical anomalies. In total, nine drill holes totalling 3,252 m were drilled.

Panoro Minerals, 2007 to Present

In March 2007, Panoro acquired the Cotabambas project from CDLM.

From 2011 to present, Panoro completed additional mapping, surface rock and stream sediment geochemical sampling, IP surveying, and magnetometer surveying. The company focused firstly on Cluster 1 before expanding its programs to Cluster 2.  Panoro also conducted diamond drill testing of geological, geochemical, and geophysical anomalies in Ccalla and Azulccacca deposits. In total, 121 holes (63,198 m) to February 2014.

In 2017 Panoro completed a campaign of 30 drill holes (6,632.62 m) in the Breccia, Maria Jose, Cateo, Petra and David exploration targets located next to the mineral resources areas in Cluster 1. In 2018 Panoro completed a 6-hole campaign (2,172.60 m) at Maria Jose and Petra targets, and in parallel mapping and rock sampling in Guaclle and Chaupec exploration targets. In 2019 Panoro completed a campaign of 5 holes (992.70 m) in Chaupec target in Cluster 2.

The 2017 - 2019 exploration work has identified new Cu, Au, Ag mineralization with exploration potential in Maria Jose (hosted in volcanics), Petra-David (porphyry), Guaclle (Skarn) and Chaupec (Skarn) was discovered.

Table 1: Summary of Drilling Campaigns

YearNumber of HolesMeters

Figure 1: Cotabambas property showing exploration targets in the Clusters 1 and 2.
Note the mineral resources PEA pit in blue line in the south extreme of the Cluster 1.


Mineral Resources Estimate by SRK 2007

In March 2007 the SRK Consulting technical report estimated mineral resource of 90 million tonnes within the Ccalla Porphyry with average copper grade of 0.77% and average gold grade of 0.42 g/t applying a cut-off grade of 0.4% copper. The technical report is posted on SEDAR and a link to the report is included below.

March 09, 2007 SRK Technical Report on the Mineral Exploration Properties

Mineral Resources Estimate by AMEC Peru S.A. 2012

In July 2012 the inferred mineral resource was updated to 404.1 Mt at 0.42% Cu, 0.23 g/t Au and 2.84 g/t Ag at a cut-off of 0.20 % Cueq within a Mineral Resource Pit Shell and under the NI 43-101 international standards. The technical report is posted on SEDAR and a link to the report is included below.

July 24, 2012 AMEC Technical Report on Mineral Resource Estimate

Mineral Resources Estimate by TETRA TECH 2014

In October 2013 Tetra Tech amended a NI 43-101 report containing a mineral resources estimate for the Cotabambas Project, including 117.1 million tonnes at 0.42% Cu, 0.23 g/t Au and 2.74 g/t Ag and 0.0013%Mo as Indicated category and 605.3 million tonnes at 0.31% Cu, 0.17 g/t Au, 2.33 g/t Ag and 0.0019% Mo as Inferred category, at a cut-off of 0.20% Cueq and within a Mineral Resource Pit Shell. The technical report is posted on SEDAR and a link to the report is included below

July 7, 2014 Tetra Tech Technical Report and Resource Estimate

In April 2015 Tetra Tech was engaged to re-code the existing resource model to sub categorise the transitional mineralisation for recoverable portions, as shown in Tables 2 and 3. The PEA technical report by Amec Peru S.A was filed in April 2015 which included the updated and current resource estimate shown in Table 2 and Table 3.

Table 2: Indicated Mineral Resources

ZoneSub-ZoneCut-Off %
Mill. TonnesCu
Oxide Copper-GoldOxides Copper0.25.800.610.122.160.0001
Oxide Copper-Gold0.23.900.700.413.380.0000
Oxide GoldOxide Goldna0.22 0.643.800
Total indicated0.2117.120.420.222.740.00130

Table 3: Inferred Mineral Resources

ZoneSub-ZoneCut-Off %
Mill. TonnesCu
Hypogene Sulphide 0.2521.
Supergene Sulphide 0.27.400.730.181.930.0007
Oxide Copper-GoldOxides Copper0.225.800.510.101.470.0005
Oxide Copper-Gold0.23.500.640.422.780.0001
Oxide Gold na1.20-0.613.270
Total Inferred0.2603.500.310.182.330.0019

The PEA technical report is posted on SEDAR and a link to the report is included below.

April 9, 2015 AMEC & Tetra Tech Technical Report on Preliminary Economic Assessment

The reclassification of oxide material for leach amenability according to the Amec Foster Wheeler Peru S.A. study was undertaken by Tetra Tech. Inside the Oxide Copper-Gold Zone, sub-zones of Mixed, Oxides Copper and Oxide Copper-Gold were identified using information from sequential copper assay results. These results were announced in April 2015. The model was regularized and extra fields were calculated to report the resources with new categories for this specific zone, to guide future mining studies such as the PEA. The recoding of the oxide zone does not constitute a material change to the previous published Resource.

Figure 2: Typical cross section in Calla deposit showing the four mineral resources domains. See the resources pit in light blue line and the PEA Pit in purple line.


Preliminary Economic Assessment by AMEC, April 2015

The PEA was prepared by Amec Foster Wheeler Perú S.A. ("Amec Foster Wheeler") in accordance with the definitions on the Canadian National Instrument 43-101. The report includes Inferred and Indicated Mineral Resources estimated by Tetra Tech in April 2015. The report also includes hypogene and supergene sulphides and oxide copper and gold mineralization from the Ccalla and to a lesser extent the Azulccacca deposits.

Highlights results include:

  • Pre-tax NPV(7.5%) is US$ 981.7 million, IRR is 17.3% and payback of 3.6 years.
  • After-tax NPV(7.5%) is US$ 627.5 million, IRR is 14.4% and payback of 4.0 years.
  • Conventional open pit mining and flotation processing at a design throughput of 80,000 tonnes per day with a mine life of 19 years.
  • Average annual payable copper of 143.4 million pounds.
  • Average annual payable gold of 88.0 thousand ounces.
  • Average annual payable silver of 967.2 thousand ounces.
  • Average direct cash costs (C1) of US$1.26 per pound of copper, net of by-product credits.
  • Initial project capital costs of US$ 1.38 billion, including contingencies.
  • Good potential for discovery additional mineralization.

Project economics were estimated on the basis of long term consensus metal price forecasts derived from prices periodically published by a number of large banking and financial institutions and included copper at $3.25/lb, gold at $1300/oz and silver at $20.50/oz.

Metallurgical testwork in 2014 was carried out at Certimin Laboratories in Lima, Peru in a program designed and supervised by Amec Foster Wheeler. The current mine plan includes mining of higher grade zones in the early life of mine where higher recoveries may be demonstrated with further test work. The treatment of oxide copper subzone is not included in the PEA. Metallurgical testing to date has shown that copper recoveries from this material in the flotation circuit are low but there is potential to expand the tonnage with more drilling, and the addition of such a circuit remains a future opportunity. The final flotation concentrate will contain copper, gold and silver, free of deleterious elements. After thickening and filtering, the concentrate will be transported by truck to the Matarani seaport in Arequipa, along existing road networks.

The subset of the Mineral Resources contained within the Azulccaca and Ccalla pits that is included in the PEA mine plan is 136.7 Mt averaging 0.35%Cu, 0.20 Au g/t, 2.5 Ag g/t classified as Indicated Mineral Resources, and 397.1 Mt averaging 0.28%Cu, 0.16 Au g/t, 2.21 Ag g/t classified as Inferred Mineral Resources. The mine plan supports a mine life of 19 years. The pit slope angle is 42 degrees OSA and strip ratio of waste/mill of 1.03. More details are presented in the PEA Technical Report.

Opportunities for Project Growth and Enhanced Economics:

  • Copper-Gold Oxide material that will be stockpiled for future opportunity.
  • Good potential to expand the known mineralization in Ccalla and Azulccaca deposits.
  • A gravity circuit inside the flotation flowsheet will be investigated with additional metallurgical testing to investigate the production of doré.
  • Potential to increase higher grade mill feed processed in the early mine life with additional studies to optimize the mine plan.
  • Potential to increase recoveries with additional metallurgical testing and to improve discrimination between metallurgical types within the deposit.
  • As detailed in a June 23, 2014 news release, eight other mineralized prospects have been identified in the general vicinity of the known deposits and represent Project upside potential to add to the known Mineral Resources with additional drilling and technical studies.

The PEA technical report is posted on SEDAR and a link to the report is included below.

April 9, 2015 AMEC & Tetra Tech Technical Report on Preliminary Economic Assessment

Updated Preliminary Economic Assessment by AMEC and Moose Mountain, September 2015

The results show strongly improved economics compared with PEA results announced on April 2015 as the result of an optimized mine plan and processing cut-off grade strategy along with associated improvements to waste rock and tailings management.

Highlights results include:

  • At the updated base case prices of copper at $3.00/lb, gold at $1,250/oz and silver at $18.50/oz:
    • Pretax economic metrics of:
      • NPV(7.5%) of $US 1,052.6 million, increased from $US 647.9 million;
      • IRR of 20.4%, increased from 14.2%; and
      • Payback of 3.2 years, decreased from 4.4 years.
    • After tax economic metrics of:
      • NPV(7.5%) of $US 683.9 million, increased from $US 379.4 million;
      • IRR of 16.7%, increased from 11.8%; and
      • Payback of 3.6 years, decreased from 4.8 years.
  • Decreased average direct cash costs (C1) to $US1.22 per pound of copper, decreased from $US1.26, net of by product credits.
  • Increased average annual payable metal of:
    • Copper 155.1 million pounds, increased from 143.3 million pounds;
    • Gold 95.1 thousand ounces, increased from 88.0 thousand ounces; and
    • Silver 1,018.4 million ounces, increased from 967.2 thousand ounces.
  • As a comparison only with the now superseded prices used in the April 2015 PEA: copper at $3.25/lb, gold at $1,300/oz and silver at $20.50/oz, after tax economic metrics of:
    • NPV(7.5%) of $US 961.6 million, increased from $US 627.5 million;
    • IRR of 19.9%, increased from 14.4%; and
    • Payback of 3.1 years, decreased from 4.0 years.

The improved project economics have been achieved mainly with mine planning improvements and optimization of cut-off grade strategy. There has been no change to the resource classification from the April 2015 PEA nor has there been a change to the proposed processing throughput of 80,000 tonnes per day. The more significant improvements are listed below:

  • The Updated PEA mine plan has 10% less mill feed tonnes at 7% higher copper grade, 6% higher gold grade and 4% higher silver grade than the April 2015 PEA. There are 10% more waste tonnes in the updated PEA than in the April 2015 PEA.
  • Replacement of crusher, conveyor, tunnel and stacker for Wasterock transport with truck haulage along surface roads resulting in reduced risk of operations disruptions from downtime of crusher, conveyor and stacker.
  • Tailings Dam construction reduced near end of mine life with reduction in mineral resources included in mine plan, resulting in reduced sustaining capital for tailings dam construction.

The initial capital costs have increased from $US 1.38 billion to $US 1.53 billion principally due to the increased mine fleet size to accommodate the haulage of the low grade mineralization to the stockpile. The impacts on the financial metrics from this increase are offset by the:

  • Reduced capital cost due to the elimination of the crusher/tunnel/conveyor/stacker arrangement for wasterock;
  • Reduction in sustaining capital costs for the mine and tailings management; and most significantly,
  • Increased revenues earlier in the mine plan which has significantly improved payback.

The subset of the Mineral Resources contained within the Azulccaca and Ccalla open pits that are included in the updated PEA mine plan is shown in the table below.

Table 4: Subset of Mineral Resources Contained in the Update PEA Mine Plan

ClassificationIn-situ TonnesNSRIn-situ (undiluted) grades
(Million)($US/tonne)Cu (%)Au (g/t)Ag (g/t)

The updated PEA technical report is posted on SEDAR and a link to the report is included below.

September 22, 2015 AMEC & Moose Mountain Technical Report on Updated Preliminary Economic Assessment

Total waste in the mine plan is 604.2 million tonnes for an average LOM strip ratio of 1.25. The mine plan uses a variable cut-off grade strategy to increase the mill feed grade in the earlier parts of the schedule by stockpiling marginal economic material. The stockpiled material is processed towards the end of the mine life. The mine plan supports a mine life of 17 years.

Opportunities for Project Growth and Enhanced Economics:

  • Copper-Gold Oxide mineralization for potential future processing.
  • Good potential to expand the resource with additional drilling in Ccalla and Azulccaca.
  • The potential for a gravity circuit and on-site production of doré with additional met testwork
  • Potential to increase recoveries with additional metallurgical testing.
  • Higher grades of molybdenum have been intersected below and lateral to the current PEA pit limits and with continued exploration success.
  • As detailed in a June 23, 2014 news release, eight other mineralized prospects have been identified in the general vicinity of the known deposits and represent excellent upside potential to add to the known Mineral Resources with additional drilling.

Further work for a Pre-Feasibility Study of the Copper-Gold Oxides mineralization leading the project to a first stage of SX/EW Heap Leaching operation is recommended and will include drilling, engineering and marketing studies, hydrological and geotechnical analysis, as well as various baseline environmental and archeological studies. In addition, exploration work will be conducted over the Skarn targets of Chaupec and Guaclle looking for new high grade copper targets.

Prior to October 2012, the Cotabambas project contained a small, inferred resource with less than 10,000 m of total exploration completed. Since then and through a very tough period in the exploration business, the project resource has grown significantly.  Investment into drilling campaigns and now the PEA has demonstrated the potential positive economics for the project. The PEA provides a positive snapshot of the current technical and economic metrics of the project and identifies potential for growth and optimization. Outside the current mineral resources deposit the Cotabambas project contains eight other exploration targets and most of them in skarn type mineralization, including high grade zones.

Photo 1. Infrastructure facilities for Cotabambas project in the PEA 2015. View from north to south.

Luis Vela, P. Geo., Vice President of Exploration for Panoro and a "qualified person" under National Instrument 43-101, has reviewed and approved the scientific and technical information.

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