Overview
The Cozamin project is a polymetallic (copper, silver, lead, zinc) mine located 3.8 km north-northwest of Zacatecas City in the mineral-rich state of Zacatecas, Mexico. The property covers approximately 2,020 hectares in the Zacatecas Mining District and lies at 2,450 meters above sea level.
Capstone completed exploration, development and initial production at 350,000 tonnes per year ("tpy") on time and under budget, with commercial production commencing in September 2007.
Within 12 months of initial production, Capstone expanded production by 120% to 750,000 tpy at a cost of US$13 million. All capital expenditures were funded from cash flow generated by the mine.
Capstone completed a third expansion of the Cozamin mine in late 2008, with production increasing from the rate of 2,200 tonnes per day ("tpd") or 750,000 tpy to 3,000 tpd or approximately 1 million tpy, a 36% increase. The 2009 production forecast is approximately 40 million pounds of copper together with by product silver, lead and zinc production.
Mexico's geopolitically stable environment and membership in NAFTA provides a secure operating environment for the Cozamin mine. The location of the Cozamin mine also benefits from its proximity to Zacatecas City. The area has excellent logistics, roads, power, and water access available at the mine site. In addition, the city provides an environment for the employees of the Cozamin mine to live and raise their families in an area with excellent educational and medical facilities. Zacatecas has a strong mining tradition, dating back hundreds of years, providing the Cozamin mine with a community both knowledgeable and skilled in mining.
Ownership
Capstone has a 100% interest in the Cozamin mine through its subsidiary Capstone Gold S.A. de C.V. A 3% Net Smelter Royalty is paid to Grupo Bacis on all metals produced. Capstone purchased the property from Grupo Bacis in early 2004.
Financial
The Cozamin mine was built and expanded without incurring any bank debt. During the first quarter of 2009, the mine produced 9.4 million pounds of payable copper at a cash cost of approximately $1.00 per pound.
Mine Description
The Cozamin mine is an underground mine with a surface milling facility. The underground area of the mine is accessed by either a shaft from surface, or one of two ramps from surface down to the lower workings.
Mining of the Male Noche vein is by either long hole stoping, or cut and fill mining. When the vein is wider (4-10 meters) long hole stoping is used and when very wide (20-30m) an Avoca style of long hole mining is used. Levels are excavated every 20 vertical meters, and then long hole drills are used to connect between levels. Blasting of a stope normally occurs after an area is completely prepared (60 meters high by 250 meters long) and is done in sections. This bulk mining method is relatively inexpensive, but also can result in more dilution (waste material) if the vein varies over the vertical distance.
Cut and fill mining is normally used in areas where the vein is less than 4 meters wide, or where the vein is very sinuous. Mining is done in 2.5-3.0 meter lifts along strike, with material blasted and excavated, and then the area partially filled (leaving enough height for equipment to restart the cycle). This method is more expensive but allows better control of dilution, especially at narrower widths.
Currently the mine is producing between 85,000 to 90,000 tonne per month, 60% long hole, 15% cut and fill and 25% long hole stope development material.
Mined ore is brought to surface through either the shaft or the production ramp (currently 60% via the shaft). The ore is trucked to the crusher and either fed directly to the primary crusher feed bin or to the crusher stockpile.
Ore is processed through a three stage crushing plant to produce a 9.5 millimeter product size which is stored in the fine ore (24 hour storage capacity) bins ahead of the grinding circuit.
Material fed to the grinding circuit is reduced in size to 55% minus 200 mesh and then sent to flotation. The flotation steps involve flotation of lead and copper first, followed by zinc. All products go through multiple stages of upgrading (or cleaning) in the flotation circuit ending with a silver-rich copper concentrate, a silver-rich lead concentrate and a zinc concentrate.
All concentrates are thickened and filter before storage at site. Concentrate is trucked by 3rd party contractors to the port of Manzanillo for export to world markets. The Cozamin mine has entered into sales contracts for the three different concentrates through to the end of 2011.
Exploration
Excellent possibilities exist for finding additional mineralization at Cozamin because the Mala Noche vein has only been partially exploited and not systematically explored to depth or along strike. Capstone's deepest holes in the Mala Noche vein indicated that the copper-silver phase of mineralization extends to greater depths than the current mineral resources.
The current mineral resources are divided between the San Roberto mine area and the San Rafael area. These mineral resources are contained within a 2.0 km strike length of the 5 km long Mala Noche vein that the company controls.
2009 Cozamin Objectives
- Optimize throughput and recovery of the various metals.
- Reduce operating costs through efficiencies and best practices.
- Explore along strike and down dip of the mineral reserve and mineral resource base.
Proven and Probable Mineral Reserves as of December 31, 2008, based ona new NI43-101 mineral reserve statement conducted by SRK engineering are
| Classification |
Tonnes |
Cu (%) |
Ag (g/t) |
Pb (%) |
Zn (%) |
| Proven |
1,606,000 |
2.02 |
.77 |
0.44 |
0.97 |
| Probable |
6,491,000 |
1.57 |
55 |
0.26 |
1.13 |
| Total |
8,097,000 |
1.66 |
60 |
0.29 |
1.10 |
2008 Measured, Indicated and Inferred Mineral Resources San Roberto Area
Mineral
Resource
Category* |
Tonnes
(1% Cu
Cut-off) |
Cu (%) |
Ag (g/t) |
Zn (%) |
Pb (%) |
Au (g/t) |
Million lbs** |
Million
ozs** |
| Cu |
Zn |
Pb |
Ag |
| Measured |
1,749,000 |
2.35 |
86 |
1.01 |
0.41 |
0.063 |
90.6 |
38.9 |
15.7 |
4.8 |
| Indicated |
6,077,000 |
1.90 |
63 |
1.20 |
0.25 |
0.063 |
255.0 |
160.2 |
34.0 |
12.3 |
| Measured & Indicated |
7,826,000 |
2.00 |
68.2 |
1.15 |
0.29 |
0.063 |
345.6 |
199.1 |
49.7 |
17.1 |
| Additional Inferred |
1,100,000 |
1.58 |
52.5 |
0.95 |
0.17 |
0.065 |
38.4 |
23.0 |
4.1 |
1.86 |
The current resources are contained in 1.5 km of strike while Capstone controls 5 km of strike of the Mala Noche vein system.
2008 Measured, Indicated and Inferred Mineral Resources San Rafael Area
Mineral
Resource
Category* |
Tonnes
(3% Zinc Cut-off) |
Cu (%) |
Ag (g/t) |
Zn (%) |
Pb (%) |
Au (g/t) |
Million lbs** |
Million ozs** |
Million ozs** |
| Cu |
Zn |
Pb |
Ag |
Au |
| Measured |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Indicated |
1,467,000 |
0.23 |
38.3 |
3.64 |
0.47 |
0.48 |
7.6 |
117.6 |
15.0 |
1.81 |
0.023 |
| Measured & Indicated |
1,467,000 |
0.23 |
38.3 |
3.64 |
0.47 |
0.48 |
7.6 |
117.6 |
15.0 |
1.81 |
0.023 |
| Additional Inferred |
556,000 |
0.14 |
35.8 |
3.55 |
0.57 |
0.61 |
1.7 |
43.5 |
7.0 |
0.64 |
0.011 |
Technical Reports
Drill Results
Technical Maps
San Rafael Surface Drill Hole Results
