Farallon Mining Ltd.: The G-9 Mine Story

CIM Vancouver 2010
Neil R. MacRae,
Abstract Farallon Mining Ltd.: The G-9 Mine Story
Dick Whittington – President & CEO, Farallon Mining Ltd.
Farallon has been working on the Campo Morado property in Guerrero State, Mexico since the mid-1990’s. Four VMS deposits were discovered with indicated resources of 11.2 million tonnes at 4.66% Zinc, 0.67% Copper, 1.44% Lead, 2.67 g/t Gold, and 165 g/t Silver; however, the fine grained mineralogy inhibited the use of conventional flotation recovery techniques. In June 2005, the “discovery hole” for the G-9 deposit was drilled. Hole 420 returned 14.86 metres of 14.2% Zinc and 1.7% Copper with clear coarse grained mineralization amenable to conventional flotation.
Subsequent drilling confirmed the high-grade nature of the deposit and Farallon’s management chose to develop the mine without doing a feasibility study. To further reduce the time required to put the G-9 Mine into production the “Parallel Track” approach was utilized. Construction, permitting, mine planning, mill design, and definition drilling were all carried out concurrently. Despite not having a feasibility study completed, Farallon was able to use innovative financing arrangements to raise over $200 million dollars to finance the construction of the mine. The G-9 Mine is now in full commercial production, and the mine is generating positive cash flow with cash costs in the U$0.35/lb of zinc range, less than four years since the deposit was discovered.
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