Mining

2. Organic and sustainable growth of the Core Business

Michilla/Antucoya

Michilla district

Michilla is currently carrying out studies to examine the potential to utilise its existing mineral resources to further extend the life of the operation from 2012 through to 2018. The Group has also conducted exploration at Michilla in previous years which has identified some prospects which could eventually supplement the existing mineral resources at Michilla. The mineral inventory at these deposits is currently estimated at between 20 to 33 million tonnes, with a corresponding average copper grade of between 1.25% and 1.02%.

Antucoya

Antucoya is an oxide deposit located approximately 45 kilometres east of Michilla. The deposit has a mineral resource of 1.5 billion tonnes, with an average copper grade of 0.27% at a cut-off grade of 0.10%.

Studies initially intended to bring the Antucoya project to feasibility stage were started in 2008, which to date have examined a number of options which included a ROM operation to produce enriched copper solution which could be processed at Michilla’s SX-EW plant as well as a stand-alone SX-EW project to produce copper cathodes. In August 2009 a budget of US$19.8 million was approved to progress with a full feasibility study for a stand-alone project, based on a combination of heap leaching on dynamic pads and ROM leaching on permanent pads.

The environmental permitting process for the feasibility study is currently in progress. It is expected that during 2010 a test pit will be constructed at the deposit, to allow the extraction of ore for metallurgical testwork. The feasibility study is expected to be completed by mid-2011.