EX-99.1 2 d325659dex991.htm EX-99.1 EX-99.1
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Exhibit 99.1

 

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BARRICK GOLD CORPORATION

 

TECHNICAL REPORT ON THE

VELADERO MINE,

SAN JUAN PROVINCE,

ARGENTINA

PREPARED FOR BARRICK GOLD

CORPORATION

Report for NI 43-101

Rev. 0

Qualified Persons:

Luke Evans, P.Eng.

Glen Ehasoo, P.Eng.

Kathleen Ann Altman, Ph.D., P.E.

 

March 16, 2012

 

 

ROSCOE POSTLE ASSOCIATES INC.

 

  
  


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Report Control Form

 

Document Title    Technical Report on the Veladero Gold Mine, San Juan Province, Argentina   
Client Name & Address   

Barrick Gold Corporation

Brookfield Place, TD Canada Trust Tower

Suite 3700, 161 Bay Street, P.O. Box 212

Toronto, Ontario M5J 2S1

  

  

  

  

Document Reference    Project #1682     
 
Status &
Issue No.
  
  
    

 

FINAL

Version

  

  

     Rev 0   
Issue Date    March 16, 2012   
Lead Author   

Luke Evans

Glen Ehasoo

Kathleen Ann Altman

    

 

 

(Signed)

(Signed)

(Signed)

  

  

  

     
Peer Reviewer    Graham Clow      (Signed)         
Project Manager Approval    Luke Evans      (Signed)         
Project Director Approval    Graham Clow      (Signed)         
Report Distribution                                     Name      No. of Copies      
  

Client

        
   RPA Filing      1 (project box)      

Roscoe Postle Associates Inc.

55 University Avenue, Suite 501

Toronto, Ontario M5J 2H7

Canada

Tel: +1 416 947 0907

Fax: +1 416 947 0395

mining@rpacan.com

 


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TABLE OF CONTENTS

 

     PAGE  

1 SUMMARY

     1-1   

Executive Summary

     1-1   

Technical Summary

     1-6   

2 INTRODUCTION

     2-1   

3 RELIANCE ON OTHER EXPERTS

     3-1   

4 PROPERTY DESCRIPTION AND LOCATION

     4-1   

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

     5-1   

6 HISTORY

     6-1   

7 GEOLOGICAL SETTING AND MINERALIZATION

     7-1   

Regional Geology

     7-1   

Local and Property Geology

     7-3   

Alteration

     7-5   

Mineralization

     7-7   

8 DEPOSIT TYPES

     8-1   

9 EXPLORATION

     9-1   

10 DRILLING

     10-1   

Core and RC Recovery

     10-4   

Possible Drill Hole Sampling Biases

     10-4   

11 SAMPLE PREPARATION, ANALYSES AND SECURITY

     11-1   

Sampling Method and Approach

     11-1   

Sample Preparation, Analyses and Security

     11-2   

Quality Assurance and Quality Control

     11-3   

12 DATA VERIFICATION

     12-1   

13 MINERAL PROCESSING AND METALLURGICAL TESTING

     13-1   

Metallurgical Testwork

     13-1   

14 MINERAL RESOURCE ESTIMATE

     14-1   

Summary

     14-1   

Geological Models

     14-2   

Geological Domains

     14-7   

Grade Domains

     14-7   

Metallurgical Domains

     14-10   

Density Data

     14-10   

Cut-Off Grades

     14-11   

Assay Statistics

     14-11   

Capping of High Grade Values

     14-13   

Composites

     14-14   

 

 

Barrick Gold Corporation — Veladero Mine, Project #1682    Rev. 0 Page i
Technical Report NI 43-101 – March 16, 2012   


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Contact Plot Analysis

     14-16   

Variography

     14-17   

Resource Estimation Methodology

     14-19   

Resource Estimate Validation

     14-22   

Resource Classification

     14-26   

15 MINERAL RESERVE ESTIMATE

     15-1   

16 MINING METHODS

     16-1   

Production Schedule

     16-13   

Waste Rock

     16-15   

Valley Leach Facility

     16-18   

Mine Equipment

     16-20   

Manpower

     16-22   

Mine Infrastucture

     16-22   

17 RECOVERY METHODS

     17-1   

18 PROJECT INFRASTRUCTURE

     18-1   

19 MARKET STUDIES AND CONTRACTS

     19-1   

Markets

     19-1   

Contracts

     19-1   

20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

     20-1   

Environmental Studies

     20-1   

Project Permitting

     20-1   

Social or Community Requirements

     20-2   

Mine Closure Requirements

     20-2   

21 CAPITAL AND OPERATING COSTS

     21-1   

Capital Costs

     21-1   

Operating Costs

     21-1   

Manpower

     21-4   

22 ECONOMIC ANALYSIS

     22-1   

23 ADJACENT PROPERTIES

     23-1   

24 OTHER RELEVANT DATA AND INFORMATION

     24-1   

25 INTERPRETATION AND CONCLUSIONS

     25-1   

26 RECOMMENDATIONS

     26-1   

27 REFERENCES

     27-1   

28 DATE AND SIGNATURE PAGE

     28-1   

29 CERTIFICATE OF QUALIFIED PERSON

     29-1   

 

 

Barrick Gold Corporation — Veladero Mine, Project #1682    Rev. 0 Page ii
Technical Report NI 43-101 – March 16, 2012   


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LIST OF TABLES

 

     PAGE  

Table 1-1 Mineral Resources—December 31, 2011

     1-2   

Table 1-2 Mineral Reserves—December 31, 2011

     1-2   

Table 1-3 Capital Costs Summary

     1-14   

Table 1-4 Total Operating Cost

     1-15   

Table 4-1 Mining Concessions

     4-2   

Table 4-2 Easements

     4-2   

Table 7-1 Orebody Dimensions

     7-9   

Table 7-2 Trace Element Geochemistry Results

     7-11   

Table 10-1 Historical Drilling Summary

     10-2   

Table 13-1 Average Gold Recovery Formulae

     13-2   

Table 13-2 Evaluation of Estimated Recovery

     13-3   

Table 14-1 Mineral Resources—December 31, 2011

     14-1   

Table 14-2 Lithology Codes

     14-3   

Table 14-3 Alteration Codes

     14-3   

Table 14-4 Sub-zone Codes

     14-3   

Table 14-5 Grade Domain Codes

     14-8   

Table 14-6 Tonnage Factors

     14-11   

Table 14-7 Gold Capping Levels

     14-13   

Table 14-8 Gold Estimation Parameters

     14-21   

Table 14-9 2011 Reconciliation Results

     14-25   

Table 15-1 Mineral Reserves—December 31, 2011

     15-1   

Table 16-1 Veladero Production History

     16-1   

Table 16-2 Mine Optimization Parameters

     16-6   

Table 16-3 Internal Cut-off Grades, Mine Reserves

     16-9   

Table 16-4 Mine Design Parameters

     16-10   

Table 16-5 Summary of Golder Slope Design Recommendations

     16-11   

Table 16-6 Mine Production Schedule

     16-14   

Table 16-7 Heap Leach Placement Schedule

     16-15   

Table 16-8 Mine Equipment Fleet

     16-21   

Table 21-1 Capital Costs Summary

     21-1   

Table 21-2 Mine Operating Costs

     21-2   

Table 21-3 Process Operating Costs

     21-3   

Table 21-4 G&A Costs

     21-3   

Table 21-5 Total Operating Cost

     21-4   

Table 21-6 Mine Site Manpower

     21-4   

LIST OF FIGURES

 

     PAGE  

Figure 4-1 Location Map

     4-3   

Figure 4-2 Claim Map

     4-4   

Figure 7-1 Regional and Local Geology

     7-2   

Figure 7-2 Simplified Lithology Distribution

     7-4   

Figure 7-3 Simplified Alteration Distribution

     7-6   

Figure 7-4 Main Orebody Locations on 4,200 m Bench

     7-8   

Figure 10-1 Drill Plan

     10-3   

Figure 14-1 Lithological Domains

     14-4   

Figure 14-2 Alteration Domains

     14-5   

Figure 14-3 Sub-Zone Domains

     14-6   

Figure 14-4 Grade Domains

     14-9   

 

 

Barrick Gold Corporation — Veladero Mine, Project #1682    Rev. 0 Page iii
Technical Report NI 43-101 – March 16, 2012   


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Figure 14-5 Metallurgical Domains

     14-10   

Figure 14-6 Assay Statistics by Zones and Alteration

     14-12   

Figure 14-7 Composite Statistics by Zone and Alteration

     14-15   

Figure 14-8 Gold Contact Plot for QAL and ALQ Alteration Domains at Filo Federico

     14-16   

Figure 14-9 Gold Contact Plot for Si and QAL/ALQ Alteration Domains at Amable

     14-17   

Figure 14-10 Veladero Omni-Directional Correlogram

     14-18   

Figure 14-11 Block and Composite Au Grades—Section 6,752,600N at Filo Federico Pit

     14-23   

Figure 14-12 Block and Composite Au Grades—Section 6,750,500N at Amable Pit

     14-24   

Figure 14-13 Elevation Swath Plot

     14-26   

Figure 16-1 Veladero General Site Arrangement

     16-3   

Figure 16-2 Veladero Main Production Area

     16-4   

Figure 16-3 Veladero Pit Slope Design Sectors in Plan

     16-12   

Figure 16-4 Final Veladero WRF Arrangement

     16-17   

Figure 16-5 Final VLF Arrangement

     16-19   

Figure 17-1 Process Flow Sheet

     17-3   

 

 

Barrick Gold Corporation — Veladero Mine, Project #1682    Rev. 0 Page iv
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1 SUMMARY

EXECUTIVE SUMMARY

Roscoe Postle Associates Inc. (RPA) was retained by Barrick Gold Corporation (Barrick) to prepare an independent Technical Report on the Veladero Gold Mine (the Project) in Argentina. The purpose of this report is to support public disclosure of Mineral Resource and Mineral Reserve estimates at the Project as of December 31, 2011. This Technical Report conforms to NI 43-101 Standards of Disclosure for Mineral Projects. RPA visited the property from November 7 to November 9, 2011.

Barrick is a Canadian publicly traded mining company with a large portfolio of operating mines and projects across five continents. Veladero is a large open pit, heap leach gold and silver mine in the high Andes Cordillera of central western Argentina. Operations include open pit mining of gold-silver ore from two mining areas, two-stage crushing, and extraction of precious metals using valley-fill heap leaching and Merrill-Crowe recovery. Since Veladero started production in 2005, the mine has recovered over four million ounces of gold and over six million ounces of silver from approximately 142 million tonnes of ore averaging 1.25 g/t Au and 14.7 g/t Ag.

Mining an average of approximately 30 million tonnes per year ore is scheduled for Veladero over the next 14 years, with mine operations concluding in 2025.

Table 1-1 summarizes the Mineral Resources at Veladero as of December 31, 2011.

 

 

Barrick Gold Corporation – Veladero Mine, Project #1682    Rev. 0 Page 1-1
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TABLE 1-1 MINERAL RESOURCES – DECEMBER 31, 2011
Barrick Gold Corporation – Veladero Mine

 

Category

   Tonnes
(Mt)
     Gold
Grade
(g/t Au)
     Silver
Grade
(g/t Ag)
     Contained
Gold
(Moz Au)
     Contained
Silver
(Moz Ag)
 

Measured

     3.4         0.32         5.5         0.036         0.6   

Indicated

     36.5         0.36         12.0         0.426         14.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Measured & Indicated

     39.9         0.36         11.4         0.462         14.7   

Inferred

     67.7         0.26         11.3         0.572         24.5   

Notes:

  1. CIM definitions were followed for Mineral Resources.
  2. Mineral Resources are estimated using an average gold price of US$1,400 per ounce and an US$/ARG exchange rate of 4.0.
  3. Mineral Resources are estimated at gold cut-off grades that vary by material type from approximately 0.109 g/t Au to 0.364 g/t Au.
  4. Mineral Resources are exclusive of Mineral Reserves.
  5. Numbers may not add due to rounding.

Table 1-2 summarizes the Mineral Reserves at Veladero as of December 31, 2011.

TABLE 1-2 MINERAL RESERVES – DECEMBER 31, 2011

Barrick Gold Corporation – Veladero Mine

 

Category

   Tonnes
(Mt)
     Gold
Grade

(g/t  Au)
     Silver
Grade

(g/t  Ag)
     Contained
Gold

(Moz Au)
     Contained
Silver

(Moz Ag)
 

Proven

     17.0         0.89         16.2         0.49         8.9   

Probable

     403.0         0.75         14.5         9.73         187.4   

Stockpiles

     7.3         0.51         6.0         0.12         1.4   

Inventory

     9.3         0.75         —           0.22         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Proven & Probable

     436.5         0.75         14.1         10.56         197.7   

Notes:

  1. CIM definitions were followed for Mineral Reserves.
  2. Mineral Reserves are estimated at a variable cut-off grade based on process cost, recovery and profit. The cut-off grades vary from approximately 0.13 g/t Au to 0.42 g/t Au.
  3. Mineral Reserves are estimated using an average gold price of US$1,200 per ounce and an US$/ARG exchange rate of 4.0.
  4. Numbers may not add due to rounding.

CONCLUSIONS

Based on the site visit and subsequent review, RPA offers the following conclusions:

MINERAL RESOURCE ESTIMATION

   

The 2011 year-end Measured and Indicated Mineral Resources, exclusive of Mineral Reserves, total 39.9 million tonnes averaging 0.36 g/t Au and 11.4 g/t Ag and contain 462,000 ounces of gold and 14.7 million ounces of silver.

 

 

Barrick Gold Corporation – Veladero Mine, Project #1682    Rev. 0 Page 1-2
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The 2011 year-end Inferred Mineral Resources total 67.7 million tonnes averaging 0.26 g/t Au and 11.3 g/t Ag and contain 572,000 ounces of gold and 24.5 million ounces of silver.

 

   

The resource estimate gold cut-off grades continue to decrease with rising gold prices and this has necessitated adding a 0.1 g/t Au indicator grade envelope to the manually interpreted 0.2 g/t Au grade envelope. RPA’s preference would be to define the Medium Grade Domain manually in the future.

 

   

The resource estimate gold cut-off grades range from 0.109 g/t for run-of-mine (ROM) material from the Argenta pit to 0.364 g/t for Type 2 ROM material from the Filo Federico and Amable pits.

 

   

Mineral Resource estimates have been prepared utilizing acceptable estimation methodologies. The classification of Measured, Indicated, and Inferred Resources conform to CIM (2010) definitions.

 

   

The current drill hole database is reasonable for supporting a resource model for use in Mineral Resource and Mineral Reserve estimation.

 

   

The methods and procedures utilized to gather geological, geotechnical, assaying, density, and other information are reasonable and meet generally accepted industry standards. Standard operating protocols are well documented and updated on a regular basis for most of the common tasks. The mine carries out regular comparisons with blast hole data, previous models, and production reconciliation results to calibrate and improve the resource modelling procedures.

 

   

Exploration and development sampling and analysis programs use standard practices, providing generally reasonable results. The resulting data can effectively be used for the estimation of Mineral Resources and Mineral Reserves.

 

   

Overall, RPA is of the opinion that Mineral Resources are estimate with high quality work that exceeds industry practice.

MINING AND MINERAL RESERVES

 

   

The open pit Proven and Probable Reserves, including existing stockpiles scheduled for processing and inventory, are estimated to be 437 million tonnes at 0.75 g/t Au and 14.1 g/t Ag, containing 10.6 million ounces of gold and 198 million ounces of silver

 

   

The Mineral Reserve estimates have been prepared utilizing acceptable estimation methodologies and the classification of Proven and Probable Reserves conform to CIM (2010) definitions.

 

   

The operating data and the supporting documents were prepared using standard industry practices and provide reasonable results and conclusions.

 

   

The production reconciliation results for the first nine months of 2011 are very good. They indicate that the resource model overestimates the tonnage by approximately 3%, overestimates the gold grade by approximately 1% and overestimates the contained gold by approximately 4%. In RPA’s opinion, these are very good reconciliation numbers.

 

 

Barrick Gold Corporation – Veladero Mine, Project #1682    Rev. 0 Page 1-3
Technical Report NI 43-101 – March 16, 2012   


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Recovery and cost estimates are based upon actual operating data and engineering to support a Mineral Reserve statement. Economic analysis using these estimates generates a positive cash flow, which supports a statement of Mineral Reserves.

 

   

The current Veladero Life of Mine (LOM) plan provides reasonable results and, in RPA’s opinion, meets the requirements for statement of Mineral Reserves. In addition to the Mineral Reserves in the LOM plan, there are Mineral Resources that represent opportunities for the future.

ENVIRONMENTAL CONSIDERATIONS

 

   

Veladero has an Environmental Management Plan that is certified under the ISO 14001 standards. It is audited annually and it must be recertified every three years.

 

   

Veladero is certified by the International Cyanide Management Code. Veladero was last certified in August 2011 and is required to recertify every three years.

 

   

The Glacier Protection Act, which prohibits certain activities including mining, is temporarily suspended in San Juan province so it is not currently affecting mining at Veladero. Extensive information is continually being supplied to the regulators in order to support continued operation of Veladero.

 

   

Mine closure plans are reviewed and analyzed annually. Current cost estimates for closure at Veladero are approximately $40 million, of which approximately $30 million has been accredited to date.

PROCESS

 

   

During the site visit, RPA noted that the process operations are clean, organized and appear to be efficient and well run. Upon an evaluation of the recovery calculations and estimated recovery versus actual recovery, it was confirmed that the estimates for gold recovery are accurate, which indicates that the recovery equations are valid, however, the actual silver recovery varies significantly from the estimated silver recovery. Over the three years that were evaluated, estimates became more accurate, but the variance between the actual silver recovery and the estimated silver recovery is over 20%.

 

   

Recirculation of the pregnant leach solution (PLS) is planned in order to increase the stacking rate on the heap leach pad to 85,000 tpd. PLS recirculation ensures that:

 

   

Gold and silver recovery is accelerated and minimizes the potential for long-term recovery losses.

 

   

Gold production is increased in the short term.

 

   

Leaching cycles are more effective.

 

   

The gold inventory in the leach pad is reduced.

 

   

Control of the pregnant solution storage area (PSSA) is improved which, in turn, stabilizes the solution inventory and

allows Veladero to maintain target solution levels while avoiding the need to build a new PLS pond.

 

   

There are plans to conduct a formal risk/benefit analysis to confirm and quantify the benefits and project costs.

 

 

Barrick Gold Corporation – Veladero Mine, Project #1682    Rev. 0 Page 1-4
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RECOMMENDATIONS

RPA makes the following recommendations:

GEOLOGY AND MINERAL RESOURCES

In RPA’s opinion, the resource modelling work is very good and no significant procedural changes are warranted. The resource model is performing very well, so it is best not to make any significant procedural changes. Some minor modelling refinements include:

 

   

Define the grade envelopes manually using all of the drill and blast hole data available and do interpretation on both plans and sections to remove ragged edges.

 

   

Do more trend analysis work (3D Leapfrog, 2D bench contours) and more variography work in smaller structural domains to support implementing stronger anisotropies and more search domains in the future.

 

   

Run classification clean up script more than once and investigate changing the number of block face criteria to eliminate even more isolated blocks.

 

   

Automatically assign Inferred to blocks centred on isolated drill holes.

 

   

Automatically assign Inferred to blocks outside 0.1 g/t Au envelope.

MINING AND MINERAL RESERVES

 

   

The LOM plan is robust and Barrick should proceed to implement the plan as presented.

 

   

Continue with the proposed valley fill heap leach facility (VLF) expansion project permitting to allow for increased placement of material to the VLF if the opportunity becomes available through future positive exploration efforts or decreases in operating cut-off grades.

 

   

Review blasting practices with a view of improving blast fragmentation and or reducing powder factors to achieve same or better results.

 

   

Review application of gold price to cut-off grade calculation for short term mine planning to maximize ore tonnes placed without impacting project Net Present Value (NPV).

 

   

Consider creating grade groups for mineralized material dispatched to the waste rock facilities to increase future economic potential of this material.

 

   

Review conveyor belt extension to the heap leach pad for LOM operations to reduce the haulage cycle and corresponding demand on haul trucks.

 

 

Barrick Gold Corporation – Veladero Mine, Project #1682    Rev. 0 Page 1-5
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PROCESS

 

   

Barrick should continue to conduct metallurgical tests on samples of ore that are placed on the leach pad and adjust the recovery calculations in efforts to improve the estimated recovery, particularly for silver.

ECONOMIC ANALYSIS

Under NI 43-101 rules, producing issuers may exclude the information required in Section 22—Economic Analysis on properties currently in production, unless the Technical Report includes a material expansion of current production. RPA notes that Barrick is a producing issuer, the Veladero Mine is currently in production, and a material expansion is not being planned. RPA has performed an economic analysis of the Veladero Mine using the estimates presented in this report and confirms that the outcome is a positive cash flow that supports the statement of Mineral Reserves.

TECHNICAL SUMMARY

PROPERTY DESCRIPTION AND LOCATION

The Veladero Mine is located on the east flank of the Andes Cordillera, six kilometres east of the Chile/Argentina border. The mine site is at approximately 29°20’ South latitude and 70°00’ West longitude in the Department of Iglesia, San Juan Province, northwest Argentina. The closest major population and commercial center is the provincial capital of San Juan, which is approximately 360 km by road. Elevations at the mine range from 3,900 m to 4,800 m.

LAND TENURE

Since 1989, Instituto Provincial de Exploraciones y Explotaciones Mineras de la Provincia de San Juan (IPEEM) has been the provincial mining entity responsible for holding title to certain of the San Juan Province’s mineral rights, and for soliciting and administering bids for exploration and mining licences in the province. Therefore, some of the mining licences are held by IPEEM. The remainder of the mining licences are held by Minera Argentina Gold S.A. (MAGSA), which is a wholly-owned subsidiary of Barrick. RPA notes that Barrick Exploraciones Argentina S.A. (BEASA) controls an extensive land package in the district that is contiguous with the mine concessions. This report summarizes only the mining and surface rights that are directly related to the Veladero Mine.

 

 

Barrick Gold Corporation – Veladero Mine, Project #1682    Rev. 0 Page 1-6
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Veladero comprises two distinct mining concessions, Mina Ursulina Sur (2,515.7 ha) and Mina Veladero (11,927 ha). Areas needed to provide access to the mine and additional areas for supporting facilities are subject to a different type of ownership claim, which are called easements. Through its exploitation contract and record of agreement with IPEEM, MAGSA’s rights to exploit Mina Veladero, in conjunction with development of Mina Ursulina Sur, are secured for 25 years. This term is renewable at MAGSA’s sole discretion for another 25 years.

Royalties to be paid by MAGSA total 3.75% of the value at the pit crest of ore mined at Veladero; 0.75% payable to IPEEM, and 3.0% payable to San Juan Province. The Argentine government collects an export duty royalty of 4.76%.

EXISTING INFRASTRUCTURE

Veladero is isolated from major cities and towns and operates on a self-sufficient basis with material and goods trucked in. Due to the remote location, the property is self-sufficient with regard to the infrastructure needed to support the operation. Electric power is generated on site using diesel generators and a wind turbine. The total electric supply is 22 MW. The water supply for industrial usage, i.e., process and dust control is secured from the Las Guas River. The domestic water supply is secured from two water wells. Potable water is treated using reverse osmosis. The Veladero site has four aerobic sewage treatment plants and one prototype sewage treatment plant that utilizes worms instead of bacteria to break down the domestic waste.

Accommodations on site are in a camp that includes emergency medical facilities, cafeteria, gymnasium, offices, and rooms for the Veladero workers.

Other infrastructure includes warehouse, truck shop, maintenance facilities, and analytical laboratory.

HISTORY

The Veladero area was first explored in the late 1980s by Argentine government geologists, who identified scattered gold anomalies in the Veladero Sur area and surrounding region during field examinations of hydrothermal alteration centers identified through satellite imagery. In 1988, administration of mineral rights in the region was transferred from the Federal to the Provincial government, and in 1989 San Juan

 

 

Barrick Gold Corporation – Veladero Mine, Project #1682    Rev. 0 Page 1-7
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Province established the IPEEM as the provincial mining entity responsible for holding title to certain of the province’s mineral rights, and for soliciting and administering bids for exploration and mining licences in the province.

Following a competitive bidding process completed by IPEEM in 1994, AGC, a Canadian junior exploration company, was awarded exploration rights to Veladero. AGC then entered into a 60:40 joint venture agreement with Lac Minerals (40%), which was acquired by Barrick a short time later.

In 1995 AGC assigned its interest to its subsidiary, MAGSA, and from 1996 through 1998 the MAGSA/Barrick joint venture successfully explored Veladero. Concurrently, Barrick, through its subsidiary BEASA, explored BEASA’s adjoining 100%-owned Ursulina Sur property as part of the Lama project. In early 1999, Homestake Mining acquired AGC. The December 2001 merger of Homestake and Barrick resulted in Barrick gaining 100% indirect control of Veladero through MAGSA and BEASA.

GEOLOGY AND MINERALIZATION

The Veladero deposit is situated at the north end of the El Indio Gold Belt, a 120 km by 25 km north-trending corridor of Permian to late Miocene volcanic and intrusive rocks, which host a number of hydrothermal alteration zones and epithermal mineral deposits. The belt consists of a Tertiary volcanic rift basin in which volcanic flows and tuffs were deposited and subsequently cut by associated intrusions. Basement rocks in the belt consist of andesitic to rhyolitic tuffs, lava flows, and volcaniclastic rocks of the Permo-Triassic Choiyoi Formation, which are overlain unconformably by Tertiary igneous and volcanic rocks ranging in age from older 40 Ma stocks to more recent 4 Ma tuffs, lava flows and volcaniclastic rocks.

The El Indio Gold Belt hosts both high and low sulphidation style mineralization over a 55 km strike length, from the Tambo-El Indio mines in the south to the Pascua-Lama project in the north. Epithermal mineralization within this belt is associated with Tertiary structural trends.

The Veladero deposit is a hypogene-oxidized, high sulphidation gold-silver deposit hosted by volcaniclastic sediments, tuffs, and volcanic breccias related to a Miocene diatreme-dome complex. Hydrothermal alteration is typical of high sulphidation gold deposits, with a silicified core grading outward into advanced argillic alteration, then into

 

 

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peripheral argillic and propylitic alteration haloes. Gold occurs as fine native grains, and is dominantly associated with silicification and with iron oxide or iron sulfate fracture coatings. Silver mineralization is distinct from gold, and occurs as a broader, more diffuse envelope, probably representing a separate mineralizing event.

The Veladero deposit forms a broad, disseminated, 400 m to 700 m wide by three kilometre long blanket of mineralization along a N15ºW-striking structural trend. The diatreme-dome complex includes a massive, central, brecciated core of heterolithic, matrix-supported tuffisite that transitions outward through clast-supported breccias into the volcanic country rocks. A bedded tuff unit that represents fragments ejected from the central vent forms a ring that overlies portions of the tuffisite and breccias at the southern end of the deposit. The Veladero deposit comprises three main orebodies: Amable in the south, Cuatro Esquinas in the centre, and Filo Federico in the north. The Argenta orebody is a small satellite deposit located approximately five kilometres to the southeast of the Veladero deposit.

The mineralized envelope encompassing greater than 0.2 g/t Au is oriented along a 345°-trending regional structural corridor. The mineralization is dominantly hosted in the diatreme breccias along the fault-bounded northwest trend. Within this trend, higher grade mineralized shoots, averaging approximately 4 g/t Au but with one metre values up to 100 g/t Au, with lengths of 300 m to 500 m, form along northeast striking structural trends and are surrounded by a halo of lower grade mineralization ranging between 0.1 g/t Au and 1.0 g/t Au.

A variety of volcanic explosion breccias and tuffs are the principal host rocks at Cuatro Esquinas and Filo Federico, where alteration consists of intense silicification. The Amable ore body is hosted within bedded pyroclastic breccias and tuffs which are affected by silicification and advanced argillic alteration. Much of the Veladero deposit is covered by approximately 40 m of overburden and the overburden in some areas is up to 170 m thick. The colluvium is generally uncemented.

Precious metal mineralization at Veladero is controlled by stratigraphy, structural trends, and elevation. Gold mineralization can be hosted by any kind of rock at Veladero, including overburden and steam-heat altered lithologies. Principal host rocks are hydrothermal breccias and felsic tuffs at Filo Federico and Cuatro Esquinas, and pyroclastic breccias and felsic to intermediate tuffs at Amable.

 

 

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EXPLORATION STATUS

The major exploration programs took place prior to the completion of the Feasibility Study in 2002. The original drilling program targeted structural intersections with surface geochemical anomalies (involving rock chip, soil, and screened talus sampling) that were coincident with Controlled-Source-Audio-Frequency-Magneto-Telluric (CSAMT) resistivity highs and magnetic lows. Since 2002, additional exploration and infill drilling has been completed. More drilling is planned to explore some gaps that still remain on the mining concessions.

MINERAL RESOURCES AND MINERAL RESERVES

The 2011 year-end Mineral Resources are summarized in Table 1-1. The Measured and Indicated Mineral Resources total 39.9 million tonnes averaging 0.36 g/t Au and 11.4 g/t Ag and contain 462,000 ounces of gold and 14.7 million ounces of silver. In addition, the Inferred Mineral Resources total 67.7 million tonnes averaging 0.26 g/t Au and 11.3 g/t Ag and contain 572,000 ounces of gold and 24.5 million ounces of silver. The resources are estimated using a gold price of $1,400/oz Au. RPA is of the opinion that the Mineral Resources are acceptable, reasonable, and compliant with NI 43-101.

Silver recoveries are very low at Veladero, so silver is not considered for the resource and reserve cut-off grades. The resource estimate gold cut-off grades are 0.155 g/t for Type 1 ROM material from the Filo Federico pit, 0.251 g/t for Type 1 ROM material from the Amable pit, 0.364 g/t for Type 2 ROM material from the Filo Federico and Amable pits, and 0.109 g/t for ROM material from the Argenta pit. The resource model was prepared using all of the drill holes available up to April 14, 2011.

RPA reviewed the resource assumptions, input parameters, geological interpretation, and block modelling procedures and is of the opinion that the Mineral Resource estimate is appropriate for the style of mineralization and that the resource model is reasonable and acceptable to support the 2011 year-end Mineral Resource and Mineral Reserve estimates.

The Veladero geology department has developed a very good understanding of the Veladero geology. Geological models were constructed to provide geologic control for grade estimation and to provide parameters for mine planning. Geology models for

 

 

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lithology, alteration and structural sub-zones were built using Vulcan software. The main faults have also been modelled. Lines and control points based on the exploration drill holes, blast holes, and pit mapping were used in Vulcan to create 3D geological wireframes.

The year-end 2011 Mineral Reserve estimate is summarized in Table 1-2. The open pit Mineral Reserves are estimated to be 427 million tonnes at 0.75 g/t Au and 14.4 g/t Ag, containing 10.3 million ounces of gold and 197 million ounces of silver and are classified as Proven and Probable Reserves. Over 90% of the open pit reserves are located within the Filo Federico pit of Veladero, with the remainder coming from Amable, Argenta, and Agostina Sur pits. Based on this review, it is RPA’s opinion that the reported material is appropriately classified as Proven and Probable Mineral Reserves and is compliant with NI 43-101.

MINING METHOD

The Veladero Mine is a traditional open pit truck/shovel heap leach operation that has been in continuous operation since 2005. Veladero has mined approximately 545.5 million tonnes and produced 4.26 million ounces of gold plus 6.6 million ounces of silver up to the end of 2011.

Mining is planned at an average of approximately 30 million tonnes per year ore is over the next 14 years, with mine operations concluding in 2025. Waste rock mining varies by year from a high of 75 million tonnes in 2017 to a low of four million tonnes in the final year of operations, averaging 52 million tonnes per year. Peak ROM material movement is scheduled at approximately 103 million tonnes per year (280,000 tpd) through 2017, tapering off to 34 million tonnes per year (93,000 tpd) in the final year of operations.

Open pit mining operations are located on mountain side slopes in rugged terrain with the majority of mining operations occurring between elevations of 3,800 MASL and 4,700 MASL. A total of 1.2 billion tonnes of material is scheduled to be moved over the next 14 years from two open pit mining areas referred to as Veladero and Argenta. Over 90% of remaining reserves are located within the Filo Federico pit of the Veladero area, with open pit mining operations scheduled to be complete in 2025. Additional Reserves within the Veladero area come from the Amable pit, with production scheduled to be completed in 2012, plus less than one year’s production is scheduled from the Agostina Sur pit. At Argenta, a single pit is currently being mined with production scheduled to be complete at the end of 2013.

 

 

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The Filo Federico ultimate pit will measure approximately 2.3 km along strike, typically 1.0 km across, and have a maximum depth of approximately 650 m. The Amable ultimate pit will measure approximately 1.0 km in diameter with a maximum depth of approximately 530 m. The southern ultimate pit wall of Filo Federico is designed to intersect the upper most benches of the northwest Amable ultimate pit wall for approximately 150 m of vertical. The Agostina Sur ultimate pit will measure under 0.3 km in diameter with a maximum depth of approximately 100 m. The Argenta ultimate pit will measure approximately 1.0 km along strike, typically 0.5 km across, and have a maximum depth of approximately 300 m.

Processing is based on a single valley fill heap leach facility (VLF) that receives crushed and ROM ore with final delivery to the pad by haul truck. Solution from the VLF is pumped to the Merrill-Crowe process facilities. The VLF is located less than 1.0 km to the south of the Amable ultimate pit, and it is almost 4.0 km south of the Filo Federico ultimate pit haul ramp exit where the majority of the remaining reserves are located. The extents of the current Phase 3 VLF are approximately 2.0 km east to west, and approximately 0.7 km north to south.

MINERAL PROCESSING

Gold is recovered from ore at Veladero using ROM and crushed ore cyanide heap leaching in a valley fill leach pad using a Merrill-Crowe zinc cementation gold recovery plant.

The lower gold grade ore, i.e., above the cut-off grade for ROM ore and below the cut-off grade for crushed ore, is mined and trucked to the leach pad in a separate area as ROM ore. Trucks dump over the side of the pad and the ore is pushed off using a track-mounted dozer.

Ore that has a gold grade above the cut-off grade for crushed ore is trucked from the mine or stockpiles and crushed in one of two two-stage crushing circuits to a nominal size of 80% passing (P80) 40 mm. The crushing plant has a capacity of approximately 90,000 tpd, i.e., 60,000 tpd through line one and 30,000 tpd through line two. Rear dump haul trucks dump directly into the primary gyratory crushers. After crushing the ore is transferred to a covered stockpile.

 

 

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After a secondary round of crushing ore is conveyed to a 3.7 km long overland conveyor belt for transport to a truck loadout bin that is located adjacent to the processing plant near the heap leach pad. Lime is added to the ore as it is transported on the overland conveyor belt. The ore from the loadout bin is loaded into mine haul trucks for transport to the valley fill heap leach facility where it is stacked in 30 m lifts.

Approximately 250,000 m3 of ore is actively under leach at any given time with dilute cyanide leach solution applied using drip emitters. The nominal capacity of the solution pumping system is 2,066 m3/h. Pregnant solution is collected by the dam at the toe of the leach pad and pumped to the Merrill Crowe recovery plant.

Gold doré that is produced by the refining process is shipped off site for further refining to produce fine gold and silver.

ENVIRONMENTAL, PERMITTING AND SOCIAL CONSIDERATIONS

On September 30, 2010, the national government of Argentina adopted the Glacier Protection Act. The act requires an inventory of Argentina’s glaciers and environmental impact studies be conducted to evaluate the impact of human activity occurring near glaciers, as well as the prohibition of certain activities where there are glaciers including mining. The law is temporarily suspended in San Juan Province, so it is not currently affecting mining at Veladero, however, extensive information is continually being supplied to the regulators in order to support continued operation of Veladero.

Veladero has an Environmental Management Plan that is certified under the ISO 14001 standards. The plan is audited annually and must be recertified every three years. It is also certified by the International Cyanide Management Code. Veladero was last certified in August 2011.

Reports of the monitoring results are submitted to the authorities every six months.

The authorities conduct site inspections at Veladero on a regular basis. Written reports of comments are distributed and Veladero responds to the comments, as required.

Currently, RPA believes that there are no environmental issues which directly affect reserves or resources. The environmental requirements are managed by an on-site staff of professionals and technicians and the legal department in the San Juan office.

 

 

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The mine closure plan was developed to allow, when practical, closure and rehabilitation activities to be carried out simultaneously with mining activities. This rehabilitation in parallel with mining will allow the performance of certain tasks during the operation of the mine, reducing closure costs and the schedule for completing the tasks at the end of the mine life. Mine closure plans are reviewed and analyzed annually. Current cost estimates for closure at Veladero are approximately $40 million, of which approximately $30 million has been accredited to date.

CAPITAL AND OPERATING COST ESTIMATES

Remaining capital costs at Veladero are primarily sustaining capital, which includes mine equipment replacement and leach pad expansion. Total remaining capital costs are a nominal $871 million. Mine pre-stripping capital of $500 million has been treated as an operating cost for the purposes of this Technical Report. Table 1-3

TABLE 1-3 CAPITAL COSTS SUMMARY

Barrick Gold Corporation – Veladero Mine

 

Department

   Sustaining Capital
(US$ million)

Engineered Facilities

   513

Continuous Improvement

     41

Safety, Health and Environment

     10

Equipment Replacement & Other

   256
  

 

Subtotal

   820

Contingency

     41

Closure

     10
  

 

Total Capital Expenditures

   871

Notes:

  1. Numbers may not add due to rounding.

All-in unit operating costs for Veladero are US$13.89 per tonne processed (Table 1-4).

 

 

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TABLE 1-4 TOTAL OPERATING COST

Barrick Gold Corporation – Veladero Mine

 

Cost

   US$/t processed

Mining

   8.78

Processing

   2.97

G&A

   2.15
  

 

Total

   13.89

Notes:

  1. Numbers may not add due to rounding.

 

 

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2 INTRODUCTION

Roscoe Postle Associates Inc. (RPA) was retained by Barrick Gold Corporation (Barrick) to prepare an independent Technical Report on the Veladero Gold Mine (the Project) in Argentina. The purpose of this report is to support public disclosure of Mineral Resource and Mineral Reserve estimates at the Project as of December 31, 2011. This Technical Report conforms to NI 43-101 Standards of Disclosure for Mineral Projects. RPA visited the property from November 7 to November 9, 2011.

Barrick is a Canadian publicly traded mining company with a large portfolio of operating mines and projects across five continents.

Veladero is a large open pit, heap leach gold and silver mine in the high Andes Cordillera of central western Argentina. Operations include open pit mining of gold-silver ore from two mining areas, two-stage crushing, and extraction of precious metals using valley-fill heap leaching and Merrill-Crowe recovery. Since Veladero started production in 2005, the mine has recovered over four million ounces of gold and over six million ounces of silver from approximately 142 million tonnes of ore averaging 1.25 g/t Au and 14.7 g/t Ag.

Mining an average of approximately 30 million tonnes per year ore is scheduled for Veladero over the next 14 years, with mine operations concluding in 2025. Waste rock mining varies by year from a high of 75 million tonnes in 2017 to a low of 4 million tonnes in the final year of operations, averaging 52 million tonnes per year.

There are currently two main open pit mining areas referred to as Veladero and Argenta. Over 90% of remaining reserves are located within the Filo Federico pit of the Veladero area. Additional reserves within the Veladero area come from the Amable pit and the Agostina Sur pit. At Argenta, a single pit is mining a small satellite deposit.

Since 1989, the Instituto Provincial de Exploraciones y Explotaciones Mineras de la Provincia de San Juan (IPEEM) has been the provincial mining entity responsible for holding title to certain of the San Juan Province’s mineral rights, and for soliciting and administering bids for exploration and mining licences in the province. Following a competitive bidding process completed by IPEEM in 1994, Argentina Gold Corp. (AGC), a Canadian junior exploration company, was awarded exploration rights to Veladero.

 

 

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AGC then entered into a 60:40 joint venture agreement with Lac Minerals (40%), which shortly was to become a subsidiary of Barrick. In 1995, AGC assigned its interest to its subsidiary, Minera Argentina Gold S.A. (MAGSA), and from 1996 through 1998 the MAGSA/Barrick joint venture successfully explored the Veladero property. Concurrently, Barrick subsidiary Barrick Exploraciones Argentina S.A. (BEASA) explored the adjoining Ursulina Sur property as part of the Lama project. In early 1999, Homestake Mining (Homestake) acquired AGC. The December 2001 merger of Homestake and Barrick resulted in Barrick’s gaining 100% indirect control of Veladero through MAGSA and BEASA.

Veladero comprises two distinct mining concessions, Mina Ursulina Sur and Mina Veladero. Through its exploitation contract and record of agreement with IPEEM, MAGSA’s rights to exploit Mina Veladero, in conjunction with the development of Mina Ursulina Sur, are secured for 25 years. This term is renewable at MAGSA’s sole discretion for another 25 years. BEASA controls essentially all the surface of Mina Ursulina Sur and Mina Veladero, in addition to other large contiguous surface parcels in the region.

Royalties to be paid by MAGSA total 3.75% of the value at the pit crest of ore mined at Veladero. This includes separate pit crest royalties of 0.75% payable to IPEEM, and 3.0% payable to San Juan Province. In addition, MAGSA pays the Argentine government a 4.76% royalty.

SOURCES OF INFORMATION

RPA Principal Geological Engineer Luke Evans, M.Sc., P.Eng., RPA Senior Mining Engineer Glen Ehasoo, P.Eng., and RPA Principal Metallurgist, Kathleen Ann Altman, Ph.D., P.E., visited the mine from November 7 to 9, 2011 and held meetings at the Barrick office in San Juan on November 10 and 11, 2011.

Discussions were held with the following Barrick and MAGSA personnel:

 

   

Zetti Gavelan – General Manager

 

   

Inivaldo Diaz – Regional Superintendent of Mine Planning

 

   

Raul Correa – Chief Engineer

 

   

Fernando Barrigón – Superintendent of Technical Services

 

   

Andres Lasry – Chief Geologist

 

   

Marcello Zangrandi – Senior Resource Geologist

 

   

Benjamin Sanfurgo - Superintendent of Resource and Reserve Modelling

 

 

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Juan Chuquimango – Ore Control Geologist

 

   

Osvaldo Brocca – Mine Geologist

 

   

Lucas Berbe – Modelling Geologist

 

   

Elio Terranova – AcQuire Database Manager

 

   

Boris Zavala – Process Manager

 

   

Jorge Coria – Mine Cost Controller

 

   

Martin Andino – Senior Fixed Assets Analyst

 

   

Daniela Esper – Senior Cost Analyst

 

   

Oscar Sagardia – Environmental Superintendent

 

   

Garbriel Barrionuevo – Chief Metallurgist

 

   

Federico Ojedo – Administrative Assistant, Process Department

The Veladero operation has been the subject of resource/reserve technical audits as follows:

 

   

May 2008, Mineral Reserve and Resource Audit, Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA, a predecessor company to RPA).

 

   

May 2007, Veladero Model Review, Resource Modelling Inc. (RMI)

 

   

March, 2005, NI 43-101 Technical Report, Barrick Gold Corporation.

 

   

February 2005, Reserve Procedure Audit, RPA.

Mr. Evans is responsible for the overall preparation of this report. Mr. Evans reviewed the geology, sampling, assaying, and resource estimate work and is responsible for Sections 1 to 12 and 14. Mr. Ehasoo reviewed the mining, reserve estimate, and economics and is responsible for Sections 15, 16, 19, 21, and 22. Dr. Altman reviewed the metallurgical, environmental, and permitting aspects and is responsible for Sections 13, 17, 18, and 20. RPA would like to acknowledge the excellent cooperation in the transmittal of data by Barrick and MAGSA personnel.

The documentation reviewed, and other sources of information, are listed at the end of this report in Section 27 References.

 

 

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LIST OF ABBREVIATIONS

Units of measurement used in this report conform to the metric system. All currency in this report is US dollars (US$) unless otherwise noted.

 

µm    micron    km2    square kilometre
°C    degree Celsius    kPa    kilopascal
°F    degree Fahrenheit    kVA    kilovolt-amperes
µg    microgram    kW    kilowatt
A    ampere    kWh    kilowatt-hour
a    annum    L    litre
bbl    barrels    L/s    litres per second
Btu    British thermal units    m    metre
C$    Canadian dollars    M    mega (million)
cal    calorie    m2    square metre
cfm    cubic feet per minute    m3    cubic metre
cm    centimetre    min    minute
cm2    square centimetre    MASL    metres above sea level
d    day    mm    millimetre
dia.    diameter    mph    miles per hour
dmt    dry metric tonne    MVA    megavolt-amperes
dwt    dead-weight ton    MW    megawatt
ft    foot    MWh    megawatt-hour
ft/s    foot per second    m3/h    cubic metres per hour
ft2    square foot    opt, oz/st    ounce per short ton
ft3    cubic foot    oz    Troy ounce (31.1035g)
g    gram    ppm    part per million
G    giga (billion)    psia    pound per square inch absolute
Gal    Imperial gallon    psig    pound per square inch gauge
g/L    gram per litre    RL    relative elevation
g/t    gram per tonne    s    second
gpm    Imperial gallons per minute    st    short ton
gr/ft3    grain per cubic foot    stpa    short ton per year
gr/m3    grain per cubic metre    stpd    short ton per day
hr    hour    t    metric tonne
ha    hectare    tpa    metric tonne per year
hp    horsepower    tpd    metric tonne per day
in    inch    US$    United States dollar
in2    square inch    USg    United States gallon
J    joule    USgpm    US gallon per minute
k    kilo (thousand)    V    volt
kcal    kilocalorie    W    watt
kg    kilogram    wmt    wet metric tonne
km    kilometre    yd3    cubic yard
km/h    kilometre per hour    yr    year

 

 

 

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3 RELIANCE ON OTHER EXPERTS

This report has been prepared by Roscoe Postle Associates Inc. (RPA) for Barrick Gold Corporation (Barrick). The information, conclusions, opinions, and estimates contained herein are based on:

 

   

Information available to RPA at the time of preparation of this report;

 

   

Assumptions, conditions, and qualifications as set forth in this report; and

 

   

Data, reports, and other information supplied by Barrick and other third party sources.

For the purpose of this report, RPA has relied on ownership information provided by Barrick. RPA has not researched property title or mineral rights for the Veladero property and expresses no opinion as to the ownership status of the property.

RPA has relied on Barrick for guidance on applicable taxes, royalties, and other government levies or interests, applicable to revenue or income from Veladero.

Except for the purposes legislated under provincial securities laws, any use of this report by any third party is at that party’s sole risk.

 

 

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4 PROPERTY DESCRIPTION AND LOCATION

LOCATION

The Veladero Mine is located on the east flank of the Andes Cordillera, six kilometres east of the Chile/Argentina border. The mine site is at approximately 29°20’ South latitude and 70°00’ West longitude in the Department of Iglesia, San Juan Province, northwest Argentina. The closest major population and commercial center is the provincial capital of San Juan, which is approximately 280 km southeast of Veladero. By road the distance is approximately 360 km via paved National Highway No. 40 north from San Juan to Provincial Road No. 436 (paved) and the village of Pismanta, and by public gravel road to Tudcum. Barrick’s 156 km all-weather gravel road continues from Tudcum over Conconta Pass, through the Valle del Cura, and over Despoblados Pass to Veladero. Elevations at the mine range from 3,900 m to 4,800 m. The mine location is shown in Figure 4-1.

LAND TENURE

Since 1989, IPEEM has been the provincial mining entity responsible for holding title to certain of the San Juan Province’s mineral rights, and for soliciting and administering bids for exploration and mining licences in the province. Therefore, some of the mining licences are held by IPEEM. The remainder of the mining licences are held by MAGSA, which is a wholly-owned subsidiary of Barrick. RPA notes that BEASA controls an extensive land package in the district that is contiguous with the mine concessions. This report summarizes only the mining and surface rights that are directly related to the Veladero Mine.

Veladero comprises two distinct mining concessions, Mina Ursulina Sur (2,515.7 ha) and Mina Veladero (11,927 ha). The ownership details of the mining properties are shown in Table 4-1. Areas needed to provide access to the mine and additional areas for supporting facilities are subject to a different type of ownership claim, which are called easements. Details of these land holdings are provided in Table 4-2. The land holdings are shown in Figure 4-2.

 

 

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TABLE 4-1 MINING CONCESSIONS
Barrick Gold Corporation – Veladero Mine

 

Concession & Licence

Numbers

  

Concession & Licence

Names

  

Owner

  

Area (ha)

520-0314-M-99

   Mina Veladero    IPEEM    11,927

338837-I-92

   VE II    IPEEM    1,459.1

338888-I-92

   VE LIII    IPEEM    1,500

338895-I-92

   VE LX    IPEEM    1,500

338845-I-92

   VE X    IPEEM    1,397.9

338849-I-92

   VE XIV    IPEEM    1,500

338878-I-92

   VE XLIII    IPEEM    1,520.7

338883-I-92

   VE XLVIII    IPEEM    1,470.9

338851-I-92

   VE XVI    IPEEM    1,500

1124-M-525-2009

   Mina Ursulina Sur    MAGSA    2,515.7

425380-B-03

   Ursulina Sur    MAGSA    469.1

0676-F18-M-95

   Rio 2    MAGSA    600

0675-F18-M-95

   Rio 3    MAGSA    998.4

0764-F28-M-96

   Gaby M    MAGSA    269.5

296942-F-89

   Florencia I    MAGSA    192.7

 

TABLE 4-2 EASEMENTS
Barrick Gold Corporation – Veladero Mine

 

Number

  

Description

  

Owner

  

Area (ha)

1739-F18-A-95

   Camp and mine facilities    IPEEM    1,1927.1

425129-B-03

   Camp and mine facilities    MAGSA    6,037

425255-B-03

   Roads and antennas    MAGSA    399.5

295,232-M-89

   Roads    MAGSA    Approx. 60 km

1124-418-M-2008

   Airstrip    MAGSA    1,100

MAGSA holds 100% direct ownership of the Mina Ursulina Sur mining concession, which is contiguous with and immediately north and east of the Mina Veladero mining concession (Figure 4-2). IPEEM owns the Mina Veladero mining concession. Through its exploitation contract and record of agreement with IPEEM, MAGSA’s rights to exploit Mina Veladero, in conjunction with development of Mina Ursulina Sur, are secured for 25 years. This term is renewable at MAGSA’s sole discretion for another 25 years.

BEASA controls essentially all the surface of Mina Ursulina Sur and Mina Veladero, in addition to other large contiguous surface parcels in the region. The main surface right easements in the mine area are shown in Figure 4-2. Easements that are not shown in Figure 4-2 are mostly related to communication antennas and access roads.

 

 

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FIGURE 4-1 LOCATION MAP

 

LOGO

 

 

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FIGURE 4-2 CLAIM MAP

 

 

LOGO

 

 

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Royalties to be paid by MAGSA total 3.75% of the value at the pit crest of ore mined at Veladero. This includes separate pit crest royalties of 0.75% payable to IPEEM, and 3.0% payable to San Juan Province.

Federal income taxes in Argentina are levied at the rate of 35%, but a number of provisions exist for reducing taxable income, and the Mining Investment Law provides for various foreign investment protections in the form of stabilization of key elements of fiscal, foreign exchange, and customs regimes. Argentina charges an additional tax of 5% of the gross revenue received from sale of minerals exported from the country. A number of other relatively minor taxes and fees are levied at the federal, provincial, and municipal levels.

The Argentine government initially stated that the export duty of 5% on gross sales was imposed as a temporary measure in 2002 was reduced in 2005; it was intended to be eliminated altogether by 2007, however, the current royalty is 4.76%.

 

 

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5 ACCESSIBILITY, CLIMATE, LOCAL

RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY

ACCESSIBILITY

The closest major population and commercial center is the provincial capital of San Juan, approximately 280 km southeast of Veladero. By road, the distance is approximately 360 km, via paved National Highway No.40 north from San Juan to Provincial Road No.436 (paved) and the village of Pismanta, and by public gravel road to Tudcum. Barrick’s 156 km all-weather gravel road continues from Tudcum over Conconta Pass, through the Valle del Cura, and over Despoblados Pass to Veladero.

It takes approximately six hours to drive to Veladero from San Juan, which in turn is approximately a two hour drive to the International airport at Mendoza. There are regular flights to Mendoza from Santiago, Chile and there are also direct flights to San Juan from Buenos Aires, Argentina.

LOCAL RESOURCES

Veladero is isolated from major cities and towns and operates on a self-sufficient basis with material and goods trucked in. Mine personnel work on a residential rotation. Operations personnel work a 14 day on – 14 day off rotation on 12-hour shifts. Administrative personnel work on either a four day on—three day off schedule or on an eight day on—six day off schedule if they have a cross shift who has the same duty functions such as a general supervisor.

INFRASTRUCTURE

Due to the remote location, the property is self-sufficient with regard to the infrastructure needed to support the operation. Electric power is generated on site using diesel generators and a wind turbine. The water supply for industrial usage, i.e. process and dust control is secured from the Las Guas River. The domestic water supply is secured from two water wells. The potable water is treated using reverse osmosis. The Veladero site has four aerobic sewage treatment plants and one prototype sewage treatment plant that utilizes worms instead of bacteria to break down the domestic waste.

 

 

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Accommodations on site are in a camp that includes emergency medical facilities, cafeteria, gymnasium, offices, and rooms for the Veladero workers.

Other infrastructure includes warehouse, truck shop, maintenance facilities, and analytical laboratory.

PHYSIOGRAPHY

The Veladero Mine area is characterized by rugged mountains with deeply incised steep-sided valleys. Elevations at the mine range from 3,900 MASL to 4,800 MASL, and the alpine climate is cold, dry, and windy. Vegetation is sparse, and is concentrated in wetlands areas. Rock outcrops and colluvial soils predominate on slopes, and overburden thicknesses of up to 170 m occur in the mine area.

Highest annual temperatures occur from December through February, when maximum daytime temperatures generally range from 10ºC to 22ºC, with lows between -5ºC and 5ºC. Winter months from June through August have daytime highs generally between -10ºC and 10ºC, and night time lows of -10ºC to -30ºC. Mean annual precipitation is estimated to be approximately 200 mm at 4,400 m elevation, with most of the precipitation arriving as snow. Winter conditions can be severe, with intense winds, blowing snow, and extreme cold, and can adversely affect mine access and operations. Rocks and gravel airborne by strong gusty winds are a common hazard in mine operations and on access roads. Local weather conditions are monitored by five meteorological stations across the site.

The mine is in the Rio de las Taguas watershed, with Despoblados, Potrerillos, Guanaco Zonzo, and Canito creeks comprising the other major perennial streams in the mine area. Water supplies for Veladero are extracted from surface and groundwater sources in the Rio de las Taguas valley.

There is no permanent habitation in the area. Tudcum is the nearest village.

 

 

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6 HISTORY

The Veladero area was first explored in the late 1980’s by Argentine government geologists, who identified scattered gold anomalies in the Veladero Sur area and surrounding region during field examinations of hydrothermal alteration centers identified through satellite imagery. In 1988, administration of mineral rights in the region was transferred from the Federal to the Provincial government, and in 1989 San Juan Province established the IPEEM as the provincial mining entity responsible for holding title to certain of the Province’s mineral rights, and for soliciting and administering bids for exploration and mining licences in the Province.

Following a competitive bidding process completed by IPEEM in 1994, AGC, a Canadian junior exploration company, was awarded exploration rights to Veladero. AGC then entered into a 60:40 joint venture agreement with Lac Minerals (40%), which was acquired by Barrick a short time later.

In 1995, AGC assigned its interest to its subsidiary, MAGSA, and from 1996 through 1998 the MAGSA/Barrick joint venture successfully explored Veladero. Concurrently, Barrick, through its subsidiary BEASA, explored BEASA’s adjoining 100%-owned Ursulina Sur property as part of the Lama project. In early 1999, Homestake Mining acquired AGC, and intensified Veladero exploration, while Barrick advanced definition of the Filo Norte or Federico deposit on the Ursulina Sur property. The December 2001 merger of Homestake and Barrick resulted in Barrick gaining 100% indirect control of Veladero through MAGSA and BEASA.

Exploration by the Veladero joint venture initially focused on the Veladero Sur gold anomalies, but eventually moved north and encountered strongly anomalous gold mineralization associated with outcropping breccia bodies in the area of what is now the Amable deposit. Initial RC drilling in late 1995 defined a small resource in this zone (Brecha Agostina), and focused the joint venture’s exploration efforts on other breccia exposures on the property.

Since Veladero started production in 2005, the mine has produced over four million ounces of gold and over six million ounces of silver from approximately 142 million tonnes of ore averaging 1.25 grams per tonne gold and 14.7 grams per tonne silver. The production history details are described in Section 16.

 

 

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7 GEOLOGICAL SETTING AND

MINERALIZATION

REGIONAL GEOLOGY

The Veladero deposit is situated at the north end of the El Indio Gold Belt, a 120 km by 25 km north-trending corridor of Permian to late Miocene volcanic and intrusive rocks, which host a number of hydrothermal alteration zones and epithermal mineral deposits (Figure 7-1). The belt consists of a Tertiary volcanic rift basin in which volcanic flows and tuffs were deposited and subsequently cut by associated intrusions. Basement rocks in the belt consist of andesitic to rhyolitic tuffs, lava flows, and volcaniclastic rocks of the Permo-Triassic Choiyoi Formation, which are overlain unconformably by Tertiary igneous and volcanic rocks ranging in age from older 40 Ma stocks to more recent 4 Ma tuffs, lava flows and volcaniclastic rocks. These volcanic rocks within the basin are grouped into five units, which from youngest to oldest are the Vallecito (5 Ma to 7 Ma), Vacas Heladas (9 Ma to 13 Ma), Cerro de las Tortolas (12 Ma to 19 Ma), Escabrosa (17 Ma to 21 Ma), and Tilito (21 Ma to 27 Ma). All of these units consist of felsic and intermediate-to-mafic volcanic rocks derived from volcanic centers located both within and outside of the mineralized belt.

The regional structural setting of the El Indio Gold Belt is dominated by fault and fracture sets associated with Tertiary east-west regional compression. The main fault set is a series of north-south striking reverse faults with associated east-west extensional fracture sets and 030º to 060º and 320º to 300º conjugate shear sets. Intrusive and volcanic centers are concentrated at structural intersections. The north-south reverse faults border the volcanic rift basin. These structural trends are important to the localization of mineralization at Veladero and at other deposits associated with the belt, including the El Indio, Pascua-Lama and Zancarron deposits.

The El Indio Gold Belt hosts both high and low sulphidation style mineralization over a 55 km strike length, from the Tambo-El Indio mines in the south to the Pascua-Lama project in the north. Epithermal mineralization within this belt is associated with Tertiary structural trends.

 

 

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FIGURE 7-1 REGIONAL AND LOCAL GEOLOGY

 

 

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LOCAL AND PROPERTY GEOLOGY

The Veladero deposit is a hypogene-oxidized, high sulphidation gold-silver deposit hosted by volcaniclastic sediments, tuffs, and volcanic breccias related to a Miocene diatreme-dome complex. Hydrothermal alteration is typical of high sulphidation gold deposits, with a silicified core grading outward into advanced argillic alteration, then into peripheral argillic and propylitic alteration haloes. Gold occurs as fine native grains, and is dominantly associated with silicification and with iron oxide or iron sulfate fracture coatings. Silver mineralization is distinct from gold, and occurs as a broader, more diffuse envelope, probably representing a separate mineralizing event. Copper and other base metals are insignificant, and sulfide mineralization is negligible. Principal controls on gold mineralization are structures, brecciation, alteration, host rocks, and elevation.

The Veladero deposit forms a broad, disseminated, three kilometre long blanket of mineralization along a N15ºW-striking structural trend. The diatreme-dome complex includes a massive, central, brecciated core of heterolithic, matrix-supported tuffisite that transitions outward through clast-supported breccias into the volcanic country rocks. A bedded tuff unit that represents fragments ejected from the central vent forms a ring that overlies portions of the tuffisite and breccias at the southern end of the deposit. The Veladero deposit comprises three main ore bodies: Amable in the south; Cuatro Esquinas in the center; and Filo Federico in the north. The Argenta ore body is a small satellite deposit located approximately five kilometres to the southeast of the Veladero deposit.

A variety of volcanic explosion breccias and tuffs are the principal host rocks at Cuatro Esquinas and Filo Federico, where alteration consists of intense silicification. The Amable ore body is hosted within bedded pyroclastic breccias and tuffs which are affected by silicification and advanced argillic alteration. Much of the Veladero deposit is covered by approximately 40 m of overburden and the overburden in some areas is up to 170 m thick. The colluvium is generally uncemented.

The water table at Veladero is deep, and is below the projected pit bottom elevation. There is also no known significant groundwater within the colluvial cover. The simplified lithology in the deposit area is shown in Figure 7-2.

 

 

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FIGURE 7-2   SIMPLIFIED LITHOLOGY DISTRIBUTION

 

 

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ALTERATION

The alteration assemblage is typical of high sulphidation deposits with a silica core grading outward into silica/alunite and then argillic alteration. The gold mineralization is dominantly associated with the silicified core, which is composed of silica, hematite, goethite and jarosite. Minor sulphide mineralization is present at less than one percent concentrations.

There are three main sectors, Amable in the south, Cuatro Esquinas in the centre, and Filo Federico to the north. The more recently discovered Argenta ore body represents a separate satellite sector located approximately five kilometres to the southeast of Amable. A variety of volcanic explosion breccias and tuffs are the principal host rocks at Federico and Cuatro Esquinas where alteration consists of intense silicification. Amable is hosted within bedded pyroclastic breccias and tuffs which are affected by both silicification and advanced argillic alteration. The intense silicification may be vuggy to massive. The surrounding country rocks are normally composed of argillically or propylitically altered intermediate volcanic flows, domes and volcaniclastic sediments.

A late-stage, silica-destructive event produced an intensely steam heated unit, concentrated around the main northwest-striking faults. This unit is highly altered and has very low rock strength.

The simplified alteration distribution in the deposit area is shown in Figure 7-3.

 

 

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FIGURE 7-3   SIMPLIFIED ALTERATION DISTRIBUTION

 

 

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MINERALIZATION

Precious metals mineralization at Veladero is controlled by stratigraphy, structural trends and elevation. Disseminated gold mineralization forms a 400 m to 700 m wide by three kilometre long tabular blanket localized between the 3,950 m and 4,400 m elevations. Veladero has been separated into three main sectors, Amable in the south, Cuatro Esquinas in the centre and Filo Federico to the north (Figure 7-4). All sectors of the deposit are characterized by the same high sulphidation style of mineralization.

The mineralized envelope encompassing greater than 0.2 g/t Au is oriented along a 345°-trending regional structural corridor. The mineralization is dominantly hosted in the diatreme breccias along the fault-bounded northwest trend. Within this trend, higher grade mineralized shoots, averaging approximately 4 g/t Au but with one metre values up to 100 g/t, with lengths of 300 m to 500 m, form along northeast striking structural trends and are surrounded by a halo of lower grade mineralization ranging between 0.1 g/t Au and 1.0 g/t Au.

A mostly barren zone approximately 300 m long occurs between Amable and Cuatro Esquinas. From Cuatro Esquinas north through Filo Federico, the gold mineralization envelope is continuous. The Veladero ore envelope lacks recognized roots or high-grade feeder conduits at depth, and exhibits no evidence for significant supergene enrichment of metals (Barrick, 2005).

 

 

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FIGURE 7-4 MAIN OREBODY LOCATIONS ON 4,200 M BENCH

 

 

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Modified After Sanfurgo (2007)

 

 

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The approximate deposit dimensions and depths below surface are summarized in Table 7-1.

TABLE 7-1 OREBODY DIMENSIONS

Barrick Gold Corporation – Veladero Mine

 

Ore Body

Name

   Depth
to Top (m)
     Approximate Dimensions (m)  
      Length      Width      Height  

AMABLE Main Zone

     50         620         350         360   

                    593  Zone

     90         350         80         140   

                    203 Zone

     80         600         140         200   

                     Agostina

     Outcrops         180         60         190   

CUATRO ESQUINAS

     250 -300         700         430         280   

FILO FEDERICO

     200         1400         650         400   

FILO MARIO

     Outcrops         360         210         80   

ARGENTA

     Outcrops         550         150         90   

Gold mineralization can be hosted by any kind of rock at Veladero, including overburden and steam-heat altered lithologies. Principal host rocks are hydrothermal breccias and felsic tuffs at Filo Federico and Cuatro Esquinas, and pyroclastic breccias and felsic to intermediate tuffs at Amable. Main-stage introduction of gold clearly is younger than diatreme eruption, acid leaching, and major stages of silicification and fracturing. It accompanied or closely followed hypogene deposition of iron oxides and jarosite. Principal controls on localization of gold mineralization are structurally-induced open spaces (fracture zones, structural intersections), favourable host rocks, brecciation, alteration, and elevation.

Gold occurs at Veladero as minute native grains disseminated along fracture surfaces, and usually it is associated with silicification and hematite, goethite, or jarosite. Trace gold telluride minerals have been identified petrographically, but are not significant. Gold grains have been found encapsulated by quartz overgrowths, and also by jarosite. Megascopic gold grains up to one millimetre in size have been recovered from a number of drill holes, but most Veladero gold is less than 50 microns in size. Metallographic studies indicate that the gold contains some silver and that the overall gold purity or millesimal fineness is approximately 800 to 900.

Amable and Cuatro Esquinas contain zones in which gold has been found disseminated and encapsulated within silica or remnant sulphides at grain sizes of 5 microns or less. Contrastingly, the gold mineralization in Filo Federico and Filo Mario consists mainly of gold grains located primarily on particle surfaces or fracture planes, possibly suggesting gold emplacement in two separate events (SNCL, 2002).

 

 

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Silver values are consistently anomalous at Veladero. The principal silver-bearing mineral is argentojarosite, and rare grains of native silver and a silver-bearing telluride have been identified in thin sections. Within the ore zone, silver and gold exhibit different distributions: some silver mineralization correlates with gold (Ag:Au ratios generally less 20:1); some silver has no associated gold; and some gold has little to no associated silver. These observations of silver and gold distributions suggest multiple events of precious metals mineralization (Barrick, 2005).

Silver is present in four mineral species, most commonly as coarse, brown, insoluble crystalline argentojarosite. Other mineral forms of silver include an insoluble dissemination in psilomelane, and soluble forms in cerargyrite and native silver (SNCL, 2002).

Goethite, hematite, and jarosite are the dominant gangue minerals in the Veladero ore bodies, occurring as earthy to crystalline fracture coatings, vug linings, breccia matrices, and disseminations. Jarosite is more abundant in the Amable sector, while hematite and goethite predominate at Filo Federico.

Sulphide mineralization within the deposit is negligible, with overall abundances of less than one percent. Pyrite is the most common sulphide mineral, and locally may reach three percent. Where present, it occurs as fine disseminations encapsulated by or intergrown with quartz, and is not known to be associated with gold. Other metallic sulphides identified in thin sections are chalcopyrite, sphalerite, bornite, pyrrhotite, arsenopyrite, cinnabar, and molybdenite; all are volumetrically insignificant.

Trace element analytical results are available from five metre downhole sample composites from 109 drill holes distributed across the Amable, Cuatro Esquinas, and Filo Federico sectors (Table 7-2). Of the nine elements analyzed, mercury is the most anomalous, followed by arsenic. Trace element geochemistry shows broad, strongly anomalous concentrations of arsenic, antimony, bismuth and lead in the Amable sector. Mercury is anomalous throughout the property, with highest concentrations at Filo Federico, where mercury exceeds 10 ppm over broad areas. In this sector mercury shows a strong correlation with a strongly silicified felsic tuff unit (Barrick, 2005).

 

 

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TABLE 7-2 TRACE ELEMENT GEOCHEMISTRY RESULTS

Barrick Gold Corporation – Veladero Mine

 

     As
(ppm)
     Bi
(ppm)
     Cu
(ppm)
     Hg
(ppm)
     Mn
(ppm)
     Mo
(ppm)
     Pb
(ppm)
     Sb
(ppm)
     Zn
(ppm)
 

Mean

     216.2         18.72         19.85         8.43         71.53         12.2         152.21         25.83         14.36   

Median

     71         4.6         13         1.92         51         10         62         7.7         7   

Std Dev

     687.56         80.54         66.26         58.31         208.76         9.85         302.52         82.07         37.65   

Range

     9999.5         1999.9         3850.5         3801.99         6594         270.5         9999         1999.9         959.5   

Minimum

     0.5         0.1         0.5         0.01         2         0.5         1         0.1         0.5   

Maximum

     10000         2000         3851         3802         6596         271         10000         2000         960   

From Barrick (2005)

Trace element geochemistry shows broad, strongly anomalous concentrations of arsenic, antimony, bismuth and lead in the Amable sector. Mercury is anomalous throughout the property, with highest concentrations at Filo Federico, where Hg exceeds 10 ppm over broad areas. In this sector mercury shows a strong correlation with a strongly silicified felsic tuff unit.

 

 

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8 DEPOSIT TYPES

The Veladero deposit is a high sulphidation epithermal gold-silver deposit hosted by volcaniclastic sediments, tuffs, and volcanic breccias related to a Miocene diatreme-dome complex. Hydrothermal alteration is typical of high sulphidation gold deposits, with a silicified core grading outward into advanced argillic alteration, then into peripheral argillic and propylitic alteration haloes. Gold occurs as fine native grains, and is dominantly associated with silicification and with iron oxide or iron sulfate fracture coatings. Silver mineralization is distinct from gold, and occurs as a broader, more diffuse envelope, probably representing a separate mineralizing event. Copper and other base metals are insignificant, and sulphide mineralization is negligible. Principal controls on gold mineralization are structures, brecciation, alteration, host rocks, and elevation (Barrick, 2005).

 

 

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9 EXPLORATION

The major exploration programs took place prior to the completion of the Feasibility Study in 2002. The original drilling program targeted structural intersections with surface geochemical anomalies (involving rock chip, soil, and screened talus sampling) that were coincident with Controlled-Source-Audio-Frequency-Magneto-Telluric (CSAMT) resistivity highs and magnetic lows. Since 2002, additional exploration and infill drilling has been completed. More drilling is planned to explore some gaps that still remain on the mining concessions. The historical drilling from 1995 to 2011 is discussed under Section 10—Drilling.

 

 

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10 DRILLING

The resource model is based on data available up to April 14, 2011. This includes 1,272 drill holes totalling 321,089 m and 490 underground chip face and wall traverse samples totalling 4,145 m (Table 10-1). Over 95% of the drilling and chip samples summarized in Table 10-1 have gold and silver assays available.

Over 80% of the drilling was by reverse circulation (RC) and the balance was diamond drill holes. Some 29 DDHs totalling 5,675 m were drilled from an underground exploration drift. Most of the surface diamond drill holes and RC holes were drilled at steeply inclined orientations toward the west or the southeast.

RC holes were drilled using 5 1/4 in. to 6 in. tricone bits, and all diamond drill holes were collared using HQ, HQ2, or HQ3 size tools. Some core holes were reduced to NQ diameter when conditions warranted. Many of the deeper diamond drill holes incorporate RC pre-collars, especially in areas of thick overburden. Hole lengths range from 20 m to 601 m. The abundance of intense silicification and fractured/brecciated ground at Veladero results in slow drilling progress, low bit life, and high per-metre drill costs. Core drilling averages only 17 m advance per 24-hour day, and RC progress averages approximately 52 m per day.

Drill hole spacing varies across the deposit. In the central portions of the Amable and Filo Federico pits average drill hole spacing is in the range of 35 m to 40 m, increasing outwards to 50 m to 90 m spacing, and increasing to approximately 100 m to 120 m spacing toward the peripheries of the orebodies. Condemnation holes outside mineralized areas are drilled on approximately 400 m centres to sterilize waste dump areas and other infrastructure sites.

 

 

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TABLE 10-1 HISTORICAL DRILLING SUMMARY

Barrick Gold Corporation – Veladero Mine

 

Year

   Type    Count      Total Metres  

95/96

   RC      39         4,243   

96/97

   RC      18         2,456   

97/98

   RC      27         7,978   

98/99

   DDH      10         2,267   
   RC      82         23,161   

99/00

   DDH      5         1,418   
   RC      223         68,659   
   RC-DDH      22         4,704   

00/01

   DDH      37         10,676   
   RC-DDH      44         16,100   
   RC      268         75,793   

01/02

   UGDH      19         3,908   
   DDH      8         2,866   
   RC-DDH      2         560   
   RC      165         29,708   
   Tunnel Faces      490         4,195   

02/03

   DDH      5         490   
   RC-DDH      6         822   
   UGDH      9         1,767   
   RC      10         1,605   

03/04

   RC      3         1,220   

04/05

   RC      25         7,641   
   DDH      4         1,387   

05/06

   RC      57         14,603   
   RC-DDH      20         3,714   
   DDH      2         864   

06/07

   RC      62         7,806   

07/08

   RC      10         2,030   

08/09

   DDH      5         1,312   
   RC      38         9,823   

09/10

   RC      22         4,839   
   DDH      6         2,152   

10/11

   RC      16         3,739   
   DDH      3         780   
     

 

 

    

 

 

 

Total RC

        1,065         265,303   

Total DDH

        113         29,886   

Total RC-DDH

     94         25,900   

Total Tunnel

     490         4,195   
     

 

 

    

 

 

 

Grand Total

        1,762         325,284   
     

 

 

    

 

 

 

 

 

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FIGURE 10-1 DRILL PLAN

 

 

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CORE AND RC RECOVERY

Core recovery averages 81% and approximately 60% of the samples have core recoveries exceeding 80%. RC recovery averages 70% and only approximately 35% of the samples have recoveries exceeding 80%. The core and RC recovery rates are not very good but can be attributed to the large volumes of fractured, brecciated, and broken rock that hosts the mineralization at Veladero.

POSSIBLE DRILL HOLE SAMPLING BIASES

Over approximately 80% of the drill hole sampling is from RC holes. A study that compared RC grades and diamond drill hole grades found that, in general, the core samples had lower grades than adjacent RC samples (REI, 2003). The discrepancy was attributed to the ability of the significantly larger RC samples to recover more of the fine size fraction, which contains most of the gold, than core samples, particularly in highly fractured and vuggy material, which tends to host the higher gold grades.

Sanfurgo (2004) found that the RC gold and silver grades decreased at lower RC sample recoveries at Amable and to a lesser degree at Filo Federico. Screen tests have found that most of the gold is contained in the fine fractions and that there is a direct relationship between gold grades and fracture intensity. The results suggested that the RC gold and silver grades might be understated at Amable and Filo Federico.

RPA concludes that there is a possibility that both the core and RC gold and silver grades may be biased low, however, no significant sampling biases are evident from the production reconciliation results for the first nine months of 2011.

 

 

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11 SAMPLE PREPARATION, ANALYSES AND SECURITY

SAMPLING METHOD AND APPROACH

Samples from the initial 56 RC holes (6,734 m of drilling) were collected on two metre or longer intervals. All subsequent RC drilling was sampled on one metre intervals. Most of the RC samples were drilled dry. Wet sampling was conducted only when groundwater was encountered or when water injection was necessary to avoid sticking the rods. A double cyclone system was used to capture as many fines as possible from RC holes. The exhaust from the first cyclone circulated to a second cyclone to collect the fines, which were then included with all chips recovered from the sample run.

Drill core was sampled on nominal one metre intervals, depending on geologic conditions. The maximum length for individual samples from drill core is two metres. Core was cut in half using a water-cooled diamond saw; half was bagged and submitted for assay, and half was retained for reference or for metallurgical sampling.

The 509 m long Amable decline and the 638 m long Filo Federico decline generated 5,150 m of chip samples from the workings, mostly from one metre long horizontal cuts from each rib and face, taken with a pneumatic chipping hammer. Muck piles from every round of decline advance were grab-sampled, generating 7,181 individual samples. The muck samples were not used for the resource estimate.

Blast hole samples are taken with a shovel from channels cut on both sides of the blast hole cuttings pile after the over-drill material is scraped off. Approximately 12 kg of blast hole material is sent to the mine laboratory. The drills do not have skirts but loss of fines during strong winds is not a significant issue because the drills use some water, which holds the cuttings together in a semi-frozen state. The blast hole data are not used for the resource model, except to periodically update the gold grade envelope and geology wireframes.

RPA is of the opinion that the core, RC, underground chip, and blast hole sampling procedures at Veladero are reasonable.

 

 

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SAMPLE PREPARATION, ANALYSES AND SECURITY

Prior to January 2000, drill sample preparation and assaying was performed by Centro de Investigacion Minera y Metalurgica (CIMM), a commercial laboratory based in Santiago, Chile. The entire RC drill sample was collected and split at the drill site to an 8 kg to 10 kg sub-sample, which was delivered to a portable preparation facility at the Veladero camp. Samples were dried at 50°C, jaw-crushed to approximately 5 mm, then roll-crushed to -10 mesh. RC sample rejects are stored at Veladero. The portable facility could not consistently meet the preparation protocol of 100% -2 mm so it was discontinued after the first 3,175 drill samples. All subsequent samples were sent to CIMM’s preparation facility in San Juan. At this location the 8 kg to 10 kg RC samples were crushed to 100% passing -2 mm and split to 1.0 kg, then pulverized in a single-pass LM-2 ring and puck mill to 95% -150 mesh. Pulps were then split to 250 g and sent to CIMM’s laboratory for assay. The 750 g pulp reject was returned to MAGSA for storage.

Beginning in January 2000 Bondar-Clegg in Coquimbo, Chile (and its successor company, ALS Chemex) was contracted as the primary laboratory to replace CIMM, and subsequent RC, core, and rock chip samples were prepared at an on-site facility. The entire RC sample interval (or half core for diamond drill hole samples) was delivered to the preparation laboratory for weighing, drying at 60°C, and splitting to 8 kg to 10 kg representing approximately 25% of original RC sample weights. The coarse rejects were stored at Veladero, and the 25% splits were Rhino-crushed to 90% -10 mesh, then split again to obtain a 1.0 kg sample. This sample was sent to Mendoza for oven-drying at 60°C, followed by pulverizing to 95% -150 mesh, and riffle-splitting to a 250 g pulp for assay. In 2010, AcmeLabs in Santiago, Chile, was selected as the primary assay laboratory.

The drill core, field duplicates, and reject material are stored at very well organized and secure locations on site and in San Juan. The 250 g pulps are placed in small plastic screw-top containers and stored in 45 gal drums.

Veladero’s standard assay protocol for drill samples and rock chips involves initial assaying for gold by fire assay fusion of a 50 g pulp and analysis by atomic absorption (AA). Results are reported in ppm, with a lower detection limit of 0.005 ppm Au. For silver, 4-acid (“total”) digestion of a 1g pulp is accomplished, followed by AA analysis. Results are reported in ppm, with a lower detection limit of 0.10 ppm Ag.

 

 

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Any samples reporting initial results greater than 3 ppm Au or 50 ppm Ag are re-analyzed for the overlimit element using 50 g fire assay fusion and a gravimetric finish. The detection limits for gravimetric fire assays are 0.1 ppm for gold and 0.35 ppm for silver.

Ten-element geochemical analyses are made of composited drill samples, with 10 g of sample pulp composited from each of five one-metre drill samples. The pulp composite is homogenized and then analyzed for Cu, Pb, Zn, Cd, Mn, and Mo by ICP methods. Mercury is determined by cold-vapor analysis, and As, Bi, and Sb are determined by hydride generation.

Through 2003, drill samples grading greater than 0.4 ppm Au had six-hour cyanide solubility shake tests for gold and silver performed on a 20 g split of the sample pulp.

Analytical results are received from the lab in an electronic format and are entered directly into the database without external manipulations.

CIMM and Bondar-Clegg (ALS Chemex) have been the project’s principal analytical laboratories. Miscellaneous analytical work and check assays on drill samples have been performed by other laboratories including Alex Stewart, ALS Chemex/Geolab, Geoanalítica, Lakefield, McClelland, and Verilab.

Rock chip and drill samples are delivered by MAGSA personnel to the sample preparation facilities where the laboratory assumes sample custody.

RPA is of the opinion that the sample preparation, analytical protocols, and security measures are very good and exceed industry standard practice.

QUALITY ASSURANCE AND QUALITY CONTROL

Veladero’s quality control (QC) and quality assurance (QA) procedures were designed in 1998 by consultant Dr. Barry Smee, and utilizes field blanks to monitor contamination; pulp standards to monitor accuracy; plus field duplicates, preparation duplicates and pulp duplicates to monitor precision. Quality control samples are included with sample submittals from RC chips, drill core, and underground chip sampling.

 

 

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Blanks consist of crushed barren material, and are inserted every fortieth sample. If assay results for a blank sample show anomalous gold or silver, the lab re-assays all samples for the batch containing that blank. One in 30 samples is a duplicate, which is inserted at varied frequency so that it is blind to the laboratory. If duplicate results do not agree within acceptable limits (usually ±20%), all samples in that batch are re-run.

Thirteen internal reference standard pulps prepared from Veladero material cover a range of grades and are used to monitor laboratory accuracy. As with duplicates, if the lab’s result for a standard falls outside of established control limits, all samples from that batch are re-assayed. Standard pulps are submitted at a frequency of one in every thirty samples.

One in every twenty crushed samples are checked for granulometry to assure 90% passing 10 mesh, and one in 20 pulps are also is checked to meet the standard of 95% passing 150 mesh.

Ten percent of all samples analyzed at the primary lab (Bondar-Clegg/ALS Chemex) are re-assayed at a second lab during or following a drill campaign, as an independent check on accuracy of the primary lab.

In 2006, Barrick began implementation of standardized QA/QC procedures worldwide for exploration and production samples, which included the regular insertion of in-house standards, blanks, field duplicates, reject duplicates, and pulp replicates. Target insertion rates are approximately five percent for standards, two percent for blanks, and five percent for a combination of field, reject, and pulp duplicates. In addition, approximately five percent of the pulps are sent to external laboratories and sieve tests are also carried out on a regular basis. The current insertion rates at Veladero for exploration samples are approximately four percent each for standards, blanks, and duplicates, and five percent for external check assays. The current insertion rate for blast hole samples is one standard, one blank, and two duplicates in each batch of 30 samples.

 

 

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A detailed quality control report is prepared at least annually, or after each major sampling program is completed. This report includes control charts and discussions of QC results for the current reporting period.

Barry Smee completed annual QA/QC audits of Veladero’s sampling and assaying from 1998 through 2002. During 2003 the Veladero database was reviewed in conjunction with resource and reserve audits completed by Resource Evaluation Inc. and by Micon International Ltd., respectively.

The overall sampling and analytical precision for the exploration samples is approximately 10% at the 0.5 g/t gold concentration (Smee, 2001 and 2002). This is very good for a gold deposit and this suggests that most of the gold is very fine grained and homogeneously distributed. The standards and external check assay data reveal no significant analytical biases for the resource related samples.

The Veladero mine laboratory has been in operation since November 2004. All of the blast hole samples are assayed at the mine laboratory, which has its own QA/QC program. A review of the laboratory by Lynda Bloom of Analytical Solutions Ltd. (ASL) in June 2005 found that it was a well-designed facility with sample preparation, analytical and QC procedures properly implemented (ASL, 2005). Procedures were well-documented and were standard industry practice for gold analyses. The highlights of the laboratory review included:

 

  1. A Laboratory Information Management System (LIMS) that provides state-of-the-art information control.

 

  2. Bar-coding for samples to improve tracking and minimize sample mix-ups.

 

  3. A strong emphasis on assay QC.

 

  4. The laboratory scored 93% on the ASL laboratory audit form, which is a favourable high score.

ASL reviewed the mine laboratory in December 2006. Accuracy, precision, and other minor problems with the mine laboratory were recognized by Barrick personnel in 2006 and confirmed by Harwardt (2006) and ASL (2006). Barrick implemented a number of procedural changes in 2006 and the mine laboratory assays generally improved in 2007.

The QA/QC protocols and results were also reviewed by Scott Wilson RPA in 2007 (Scott Wilson RPA, 2008). The mine laboratory internal reference standard results

 

 

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provided to Scott Wilson RPA for 2007 indicated that the mine laboratory gold assays were accurate and generally unbiased. A quick visual review of the mine laboratory control charts in 2011 by RPA revealed no significant problems.

RPA is of the opinion that the QA/QC practices at Veladero for exploration and production samples are acceptable and exceed industry standards.

 

 

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12 DATA VERIFICATION

The Veladero resource database is regularly validated by MAGSA staff using data validation modules of Vulcan and Gemcom software programs to identify any inconsistencies or logical errors in the data. Mine staff also visually check the drill hole data on-screen on a regular basis. Outside auditors perform spot checks on the electronic database, sample submittal documents, QA/QC records, signed analytical certificates, drill logs, and other geologic records to identify errors, inconsistencies, or statistical anomalies.

As part of his annual audits of the Veladero sampling and QA/QC program, Dr. Barry Smee performed a spot check of data in the electronic database and the signed analytical certificates, and failed to find any discrepancies. He also checked sample tag numbers in the original sample books and found good correlation with sample numbers listed in the electronic database.

Smee (2001) states that a random selection of 18 Bondar Clegg assay certificates representing approximately 1,000 samples, or 1.5%, of the total 2000 and 2001 samples were compared to the master database values. No differences or errors were noticed between the two data sets.

During the 2003 resource audit, Resource Evaluation Inc. (REI) checked 5% of the Veladero assay intervals, comparing assay certificates with the electronic database, and found an error incidence of less than 0.5%, which is acceptable. REI did find an overall truncation of the third decimal place reported on some gold assays in the electronic database; this introduced a very slight degree of conservatism, less than one percent, into the raw assay data. This problem was related to incorrect export-import settings and not the master database. This problem was corrected and the entire database was re-checked according to Barrick (2005), specifically seeking any other errors in data formatting. No additional problems were found.

In 2007, RPA checked the electronic copies of the drill logs, assay certificates, and downhole survey data for holes DDH073 and RC628 drilled in 2005, RC660 drilled in 2006, and RC738 drilled in 2007 with the master database, and found essentially no errors. Only one minor data entry number reversal, related to the second and third decimals of the northing coordinate for hole DDH073, was found. RPA also used a

 

 

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number of Access queries, the Gemcom database validation routine, and visual checks and found essentially no database validation problems, which is remarkable considering the database size.

In July 2011, the exploration data was migrated to AcQuire. An electronic comparison confirmed no differences with the previous master database in MS Access. In addition, all of the collar coordinates for holes drilled since 2005 were verified by the mine surveyor (Vildozo, 2011) and the assays in 32 drill holes drilled from 1995 to 2004 were checked against the assay certificates and no errors were found (Berbe, 2011).

RPA is of the opinion that the drill hole database is acceptable to support resource and reserve estimation work.

 

 

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13 MINERAL PROCESSING AND METALLURGICAL TESTING

METALLURGICAL TESTWORK

The original metallurgical testing to support the feasibility study was completed by McClelland Labs Inc. (MLI) in Reno, Nevada USA. Bottle roll tests, column leach tests, and agitated leach tests were performed in order to select the process to be used at Veladero and estimate operating costs and metal recovery.

During operation of the Veladero mine, frequent samples have been taken of ore being placed on the leach pad and tested to confirm that the recovery has not changed over time. Bottle roll tests are conducted for 96 hours and column tests run for 30 days. Over time, the tests have been shown to show excellent correlations with the recovery curves from the 90 day leach cycle on the heap leach pad. Metallurgical characteristics vary with gold grade, ore type, and whether the ore is crushed or run-of-mine (ROM). The Type 2 ore is associated with argentojarosite, which basically encapsulates free gold. Consequently, recovery is lower for Type 2 ore. The recovery equations used at Veladero are summarised in Table 13-1. The only change that has been made over the six years the mine has been operating is to the Type 1 ore from both Filo Federico and Amable in the gold grade range from 0.5 g/t to 1.0 g/t.

The metallurgical domains are shown in Section 14, Figure 14-5.

 

 

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TABLE 13-1 AVERAGE GOLD RECOVERY FORMULAE

Barrick Gold Corporation—Veladero Mine

 

Ore Type

  

Au Grade (g/t)

  

Recovery Formula (%)

Federico Filo Type 1 (crushed)

   Au < 0.3    60
   0.3 < 0.5    38.4 * Au(g/t) + 55
   0.5 < 1.6    2.4 * Au(g/t) + 77
   1.6 < 2.0    10.0 * Au(g/t) + 65
   2.0 < Au < 3.0    2.0 * Au(g/t) + 81
   3.0 < Au    87

Federico Filo Type 2 (crushed)

   Au < 0.5    40
   0.5 < Au < 1.0    4.0 * Au(g/t) + 38
   1.0 < Au < 3.0    14 * Au(g/t) + 28
   3.0 < Au    70

Amable Type 1 (crushed)

   Au < 0.3    58
   0.3 < Au < 0.5    20.0 * Au(g/t) + 52
   0.5 < Au < 1.0    16.0 * Au(g/t) + 54
   1.0 < Au < 2.0    10.0 * Au(g/t) + 60
   2.0 < Au    80%

Amable Type 2 (crushed)

   Au < 0.5    40
   0.5 < Au < 1.0    4.0 * Au(g/t) + 38
   1.0 < Au < 2.0    14.0 * Au(g/t) + 28
   2.0 < Au    56

Federico Filo Type 1 (ROM)

      60

Federico Filo Type 2, Amable Type 1 and Type 2

   60% of estimated crushed ore recovery

Silver recovery is estimated to be 6.5% for Filo Federico Type 1 and Type 2 ores and 9.0% for Amable Type 1 and Type 2 ores.

RPA evaluated the budgeted gold and silver recovery versus the actual gold and silver recovery for 2009, 2010, and 2011. A summary of the evaluation is provided in Table 13-2.

In reviewing the data, it appears that the estimated recovery for both gold and silver were poor in 2009. In 2010 and 2011, the estimated gold recovery is reasonable and the estimates for silver recovery have improved dramatically, however, the variance between the estimated silver recovery and the actual silver recovery is over 20%.

 

 

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TABLE 13-2 EVALUATION OF ESTIMATED RECOVERY

Barrick Gold Corporation—Veladero Mine

 

           2009                 2010                 2011        
     Actual     Budget     Variance     Actual     Budget     Variance     Actual     Budget     Variance  

Crushing Plant and Leach Pad

                  

Crushed Ore (dmt)

     19,363,645        21,779,383        -11.1     25,744,264        29,611,038        -13.1     26,112,700        33,251,340        -21.5

Crushed Ore Au grade (g/t)

     1.54        1.11        38.5     1.70        1.50        13.3     1.41        1.16        22.0

Crushed Ore Ag grade (g/t)

     13.60        16.37        -17.0     18.56        20.66        -10.2     27.96        27.02        3.5

Run of mine (dmt)

     8,874,448        7,392,580        20.0     4,951,720        4,576,962        8.2     5,581,561        2,538,240        119.9

Run of mine Au grade (g/t)

     0.36        0.37        -0.2     0.47        0.31        51.3     0.68        0.27        152.5

Run of mine Ag grade (g/t)

     5.74        5.92        -3.1     13.03        11.97        8.9     12.30        5.45        125.8

Total Placed (dmt)

     28,238,092        29,171,963        -3.2     30,695,984        34,188,000        -10.2     31,694,262        35,789,581        -11.4

Placed contained Au grade (g/t)

     1.17        0.92        26.9     1.50        1.34        12.0     1.28        1.09        17.2

Placed contained Ag grade (g/t)

     11.13        13.72        -18.9     17.67        19.50        -9.4     25.20        25.49        -1.1

Placed contained Au (oz)

     1,063,101        865,487        22.8     1,482,514        1,474,740        0.5     1,305,528        1,258,001        3.8

Placed Recoverable Au (oz)

     766,824        648,924        18.2     1,161,883        1,150,482        1.0     965,670        882,025        9.5

Placed contained Ag (oz)

     10,101,598        12,871,369        -21.5     17,435,188        21,430,849        -18.6     25,682,442        29,325,811        -12.4

Merrill Crowe Plant

                  

Feed Volume (m3)

     19,429,116        19,272,000        0.8     20,928,322        20,219,238        3.5     23,993,361        23,789,778        0.9

Pregnant Solution Au Grade

     0.98        1.06        -7.2     1.69        1.79        -5.5     1.28        1.30        -1.5

Barren Solution Au Grade

     0.02        0.02        0.6     0.02        0.02        20.4     0.02        0.02        0.6

Refinery

                  

Monthly Total Production Au (oz)

     611,015        635,150        -3.8     1,121,412        1,151,000        -2.6     940,592        965,265        -2.6

Monthly Total Production Ag (oz)

     1,293,098        480,114        169.3     2,113,774        1,626,743        29.9     1,648,401        2,371,032        -30.5

Leach Pad Inventory

                  

Au (oz)

     177,411            215,531            224,479       

Recovery

                  

Gold

     57.5     73.4     -21.7     75.6     78.0     -3.1     72.0     76.7     -6.1

Silver

     12.8     3.7     243.2     12.1     7.6     59.7     6.4     8.1     -20.6


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14 MINERAL RESOURCE ESTIMATE

SUMMARY

Table 14-1 summarizes open pit Mineral Resources exclusive of Mineral Reserves as of December 31, 2011, based on a $1,400/oz gold price. The 2011 year-end Measured and Indicated Mineral Resources total 39.9 million tonnes averaging 0.36 g/t Au and 11.4 g/t Ag and contain 462,000 ounces of gold and 14.7 million ounces of silver. In addition, the 2011 year-end Inferred Mineral Resources total 67.7 million tonnes averaging 0.26 g/t Au and 11.3 g/t Ag and contain 572,000 ounces of gold and 24.5 million ounces of silver.

TABLE 14-1 MINERAL RESOURCES—DECEMBER 31, 2011

Barrick Gold Corporation—Veladero Mine

 

Category

   Tonnes
(million)
     Gold
Grade
(g/t Au)
     Silver
Grade
(g/t Ag)
     Contained
Gold
(Moz Au)
     Contained
Silver
(Moz Ag)
 

Measured

     3.4         0.32         5.5         0.036         0.6   

Indicated

     36.5         0.36         12.0         0.426         14.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Measured and Indicated

     39.9         0.36         11.4         0.462         14.7   

Inferred

     67.7         0.26         11.3         0.572         24.5   

Notes:

  1. CIM definitions were followed for Mineral Resources.
  2. Mineral Resources are estimated using an average gold price of US$1,400 per ounce and an US$/ARG exchange rate of 4.0.
  3. Mineral Resources are estimated at gold cut-off grades that vary by material type from approximately 0.109 g/t Au to 0.364 g/t Au.
  4. Mineral Resources are exclusive of Mineral Reserves.
  5. Numbers may not add due to rounding.

Silver recoveries are very low at Veladero, so silver is not considered for the resource and reserve cut-off grades. The resource estimate gold cut-off grades are 0.155 g/t for Type 1 ROM material from Filo Federico, 0.251 g/t for Type 1 ROM material from Amable, 0.364 g/t for Type 2 ROM material from Filo Federico and Amable, and 0.109 g/t for ROM material from Argenta. The resource model was prepared in March and April 2011, using all of the drill holes available up to April 14, 2011, by Barrick Senior Resource Geologist Marcello Zangrandi under the supervision of Barrick Superintendent of Resource and Reserve Modelling Benjamin Sanfurgo. Barrick Modelling Geologist Lucas Berbe assisted with the geology and copper modelling work.

 

 

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RPA reviewed the resource assumptions, input parameters, geological interpretation, and block modelling procedures and is of the opinion that the Mineral Resource estimate is appropriate for the style of mineralization and that the resource model is reasonable and acceptable to support the 2011 year-end Mineral Resource and Mineral Reserve estimates.

RPA is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other issues that could materially affect the Mineral Resource and Mineral Reserve estimates.

GEOLOGICAL MODELS

The Veladero geology department has developed a very good understanding of the Veladero geology. Geological models were constructed to provide geologic control for grade estimation and to provide parameters for mine planning. Geology models for lithology, alteration and structural sub-zones were built using Vulcan software. The main faults have also been modelled. Interpretations were made by mine geology personnel on 50 m cross sections looking east-west for the lithology model and on 25 m cross sections looking east-west for the alteration model. Lines and control points based on the exploration drill holes, blast holes, and pit mapping were used in Vulcan to create 3D geological wireframes. The geological wireframes were inspected by mine personnel and minor revisions were made locally.

The wireframes built for the main lithological, alteration and sub-zones are listed in Tables 14-2, 14-3, and 14-4, respectively. These wireframes were used to assign codes to the block model.

 

 

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TABLE 14-2 LITHOLOGY CODES

Barrick Gold Corporation—Veladero Mine

 

Code

  

Description

1    Stratified Pyroclastic Rocks and Epiclastic Sediments (B1)
2    Non-stratified Heterolithic Phreatomagmatic Intrusion Breccias (B2)
3    Felsic Crystal - Lithic Tuffs (Dacites-Rhyolites) (FCLT)
4    Feldspar Porphyry Intrusions and Domes (FP)
5    Mafic Crystal - Lithic Tuffs (MCLT)
6    Fine-grained Equigranular Diorite (DIF)
7    No Code
8    Colluvium (Co)

TABLE 14-3 ALTERATION CODES

Barrick Gold Corporation—Veladero Mine

 

Code

  

Description

1    Silica (Si)
2    Silica-alunite (QAL)
3    Alunite-silica (ALQ)
4    Quartz-illite (QILL)
5    Argillite (Arg)
6    Propylitic (PP)
7    Steam Heat (StHt)
8    Colluvium (Co)

TABLE 14-4 SUB-ZONE CODES

Barrick Gold Corporation—Veladero Mine

 

Code

  

Description

1

   Filo Norte (FN)

2

   Filo Mario (FM)

3

   Filo Federico (FF)

4

   Cuatro Esquinas (CE)

5

   593

6

   Amable (AM)

7

   Este (E)

8

   Agostina Sur (AS)

9

   Agostina (AG)

10

   Amable Este (AME)

Veladero has two main zones; Filo Federico (sub-zones 1, 2, 3, and 4) and Amable (5, 6, 7, 8, 9, and 10) The lithological, alteration, and sub-zone models are shown in Figures 14-1, 14-2, and 14-3, respectively.

 

 

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FIGURE 14-1 LITHOLOGICAL DOMAINS

 

 

LOGO

 

 

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FIGURE 14-2 ALTERATION DOMAINS

 

 

LOGO

 

 

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FIGURE 14-3 SUB-ZONE DOMAINS

 

 

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GEOLOGICAL DOMAINS

The main mineralization controls are the alteration and sub-zone domains. The mineralization typically cross-cuts the interpreted lithological boundaries, except for colluvium and steam heat. The steam heat lithology is mostly a barren post-mineralization alteration overprint. The base of the colluvium is mostly barren, however, it can host some mineralized fragments that are of economic interest locally.

The alteration codes are grouped into four simplified alteration domains which are listed below:

 

  1. Silicification-Advanced Argillic Domain (Alteration codes 1 to 3)

 

  2. Argillic Propylitic Domain (Alteration codes 4 to 6)

 

  3. Steam Heat (Alteration code 7)

 

  4. Colluvium (Lithology code 8)

The distinction between silica-alunite and alunite-silica alteration has no impact on grade interpolation, but has a significant impact on pit slope angles.

In decreasing importance, silicification, quartz-alunite, and alunite-quartz are the key alteration types associated with the mineralization. Based on the drill hole database alteration codes, approximately 59% of the total metres drilled are coded as silicification, 7% is quartz-alunite, and 8% is alunite-quartz. Consequently, the Argillic Domain hosts a very minor portion of the global resource, approximately 3% of the resources, the steam heat hosts approximately 1% of the resources, the colluvium hosts approximately 8% of the resources.

GRADE DOMAINS

The drill hole and blast hole data are used to build 3D envelopes at 0.2 g/t Au and 25 g/t Ag from five metre bench contours. A separate lower grade indicator envelope was created based on blocks with a greater than 50% probability of grading over 0.1 g/t Au because the lowest cut-off grade is now lower than the 0.2 g/t Au envelope. The indicator was used to expand the 0.2 g/t Au envelope along strike and down dip. This results in three grade domains (Figure 14-4) and they were used to assign codes to the block model (Table 14-5).

 

 

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TABLE 14-5 GRADE DOMAIN CODES

Barrick Gold Corporation—Veladero Mine

 

Code

  

Description

0

   Low (<0.1 g/t Au)

1

   Medium (0.1 to 0.2 g/t Au)

2

   High (>0.2 g/t Au)

The High Grade Domain is treated as a hard boundary whereby only composites located in it are used to interpolate blocks situated in it. The Medium Grade Domain and Low Grade Domain are soft boundaries so composites from all three grade domains can target blocks in these domains, however, all composites are capped to 0.3 g/t Au before interpolating blocks in these domains.

RPA’s preference would be to define the Medium Grade Domain manually in the future and to use the drill holes as well as all of the blast hole data.

 

 

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FIGURE 14-4 GRADE DOMAINS

 

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METALLURGICAL DOMAINS

The metallurgical recoveries model was updated in November 2008. It is based on bottle roll tests realized by LMI laboratory and internal tests at Veladero for Filo Federico Type 1 material. All other metallurgical types maintain the 2002 metallurgical recovery model. Metallurgical recoveries vary with gold grade and metallurgical type (Section 13, Table 13-1). Silver recovery is very low and estimated to be 6.5% for Federico Filo Type 1 and Type 2 mineralization and 9.0% for Amable Type 1 and Type 2 mineralization. Metallurgical characteristics depend on mineralogy. In particularly, Type 2 is associated to argentojarosite, which basically encapsulates free gold. Consequently, recovery is lower for Type 2 mineralization. Figure 14-5 shows the spatial distribution for Types 1 and 2 at Amable and Filo Federico.

FIGURE 14-5 METALLURGICAL DOMAINS

 

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From Gavelán (2008)

DENSITY DATA

Tonnage factors are assigned based on the main alteration units (Table 14-6). All blocks in the silicified alteration domain are assigned a tonnage factor of 2.47 t/m³. All blocks in the silica-alunite and alunite-silica domains are assigned a tonnage factor of 2.36 t/m³. The tonnage factor for these alteration domains is lower because of the higher clay and vuggy silica content. All of the blocks related to the weaker alteration domains are assigned 2.45 t/m³. The steam-heated alteration blocks are assigned 2.10 t/m³ and the colluvium blocks are assigned 2.00 t/m³.

 

 

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TABLE 14-6 TONNAGE FACTORS

Barrick Gold Corporation—Veladero Mine

 

Alteration Type

   Main Model
(t/m³)

Silicification

   2.47

Silica-alunite/Alunite-silica

   2.36

Quartz-illite

   2.45

Argillite

   2.45

Propylitic

   2.45

Steam Heat

   2.10

Colluvium

   2.00

The tonnage factors are based on over one thousand density tests available up to the end of 2009 and there are no significant differences between this data and the density data available up to the end of 2011. A new tonnage factor study is underway based on 2,455 samples taken from the pit and sent to AcmeLabs in Santiago for water immersion density tests on paraffin coated hand samples. The final results, including investigating variability with depth, will be available for the next resource estimate. RPA does not anticipate any significant changes to the current tonnage factors and is of the opinion that they are reasonable.

CUT-OFF GRADES

The resource cut-off grades are based on a $1,400/oz gold price and the cost, recovery, and other parameters discussed in Section 15 Mineral Reserves. The cut-off grade estimates vary by material type and pit. The resource and reserve cut-off grade estimate details for the Veladero and Argenta pits are very well documented in Diaz, (2011b) and Diaz (2011c), respectively. The resource estimate gold cut-off grades are 0.155 g/t Au for Type 1 ROM material from Filo Federico, 0.251 g/t Au for Type 1 ROM material from Amable, 0.364 g/t Au for Type 2 ROM material from Filo Federico and Amable, and 0.109 g/t Au for ROM material from Argenta.

ASSAY STATISTICS

The assay statistics for gold are summarized and shown as boxplots in Figure 14-6.

 

 

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FIGURE 14-6 ASSAY STATISTICS BY ZONES AND ALTERATION

 

 

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The assays for 251,138 m of drilling average 0.55 g/t Au and have a very high coefficient of variation (CV) equal to 6.08. Approximately 58% of the assays are situated in the silicified alteration domain at the Federico Zone and average 0.55 g/t Au. Alunite-quartz at the Amable Zone is the second most abundant alteration domain at 9% and it averages 0.5 g/t Au.

CAPPING OF HIGH GRADE VALUES

High assays are capped prior to compositing. The main capping levels are 35 g/t Au and 200 g/t Ag for the Filo Federico pit and 50 g/t Au and 300 g/t Ag for the Amable pit. High assays in the quartz-alunite and alunite-quartz alteration at the Amable Zone are capped to 12.0 g/t Au and the high assays in the quartz-alunite and alunite-quartz alteration at the Filo Federico pit are capped to 2.0 g/t Au. Lower capping levels, in the 0.1 g/t Au to 3.0 g/t Au range, are applied to a very small proportion of the assays located in the weaker intensity alteration domains (Table 14-7).

TABLE 14-7 GOLD CAPPING LEVELS

Barrick Gold Corporation—Veladero Mine

 

Description

   Code      Metres      Metres %     Cap
(g/t)
     CV Capped      GT Lost     Percentile  

All zones

        301,341           50.0         1.91         3.6     99.97

Federico & Si

     11         156,063         51.8     35.0         3.05         3.2     99.95

Amable & Si

     12         22,087         7.3     50.0         2.47         8.5     99.83

Federico & QAL

     21         2,454         0.8     2.0         1.98         30.3     99.06

Amable & QAL

     22         18,246         6.1     12.0         2.47         1.4     99.90

Federico & ALQ

     31         1,438         0.5     2.0         2.41         3.0     99.72

Amable & ALQ

     32         24,064         8.0     12.0         2.38         5.1     99.82

Federico & QILL

     41         855         0.3     0.1         0.91         90.4     39.69

Amable & QILL

     42         124         0.0     0.1         1.00         26.8     94.35

Federico & Arg

     51         605         0.2     0.1         1.48         10.1     97.37

Amable & Arg

     52         5,672         1.9     0.1         0.80         65.1     90.3

Federico & PP

     61         88         0.0     0.1         0.89         67.8     96.6

Amable & PP

     62         2,702         0.9     0.1         0.81         67.7     85.7

From Zangrandi (2011)

The capping levels are primarily based on examining statistics, histograms, and log probability plots of the assays for each alteration domain at the Filo Federico and Amable zones. The current capping levels reduce the contained gold at Filo Federico and Amable by approximately three percent and eight percent, respectively. The current

 

 

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capping levels reduce the contained silver at Filo Federico and Amable by approximately one percent and three percent, respectively. Note that Amable is approximately three times more sensitive to capping compared to Filo Federico.

Barrick also applied a second capping level directly to composites for some of the interpolation passes to further reduce the gold grade in some blocks with values deemed to be too high. The composites were capped to 15 g/t Au in the Amable sub-zone and to 10 g/t Au in the Filo Federico zone high grade domain.

Also, all composites are capped to 0.3 g/t Au before interpolating the Medium Grade Domain and Low Grade Domain blocks.

RPA concurs with the capping levels selected by Barrick. The production reconciliation results confirm they are reasonable.

COMPOSITES

Drill hole sample data were composited into five metre lengths starting at the drill hole collars and resetting at the base of the colluvium.

The composite file has an additional length field to track the actual length of each composite that is supported by sample data. The grade interpolation used length weighted composites to help reduce the influence of shorter composites.

The composite statistics for each alteration within each zone are summarized and shown as boxplots in Figure 14-7.

 

 

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FIGURE 14-7 COMPOSITE STATISTICS BY ZONE AND ALTERATION

 

 

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CONTACT PLOT ANALYSIS

Contact plots were generated for gold values to explore the relationship between the grade variable when moving from one geological domain to another.

The contact plots are constructed with Vulcan software. Vulcan searches for data with a given alteration code and then for data with another specified alteration code and groups the grades according to the distance between the two points. This allows for a graphical representation of the grade trends away from a “contact.” If average grades are reasonably similar near a boundary and then diverge as distance from the contact increases, then the particular boundary should probably not be used as a grade constraint and is referred to as a “soft” boundary. If the averages are distinctly different across a boundary, then the boundary may be important in constraining the grade estimation and the boundary is referred to as “hard”. Examples of contact plots for soft and hard boundaries are shown in Figures 14-8 and 14-9, respectively.

Domains with hard boundaries were used separately and soft boundaries were combined in the multi pass to interpolate grades.

FIGURE 14-8 GOLD CONTACT PLOT FOR QAL AND ALQ ALTERATION

DOMAINS AT FILO FEDERICO

 

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From Zangrandi (2011)

 

 

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FIGURE 14-9 GOLD CONTACT PLOT FOR SI AND QAL/ALQ ALTERATION DOMAINS AT AMABLE

 

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From Zangrandi (2011)

VARIOGRAPHY

Barrick built omni-directional correlograms for Filo Federico, Amable, and the entire Veladero deposit using 15 m length composites greater than 0.1 g/t Au (Figure 14-10). The correlograms are smooth, clearly defined, and well-supported by thousands of composite pairs. The range is approximately 200 m and the relative nugget effect is very low for a gold deposit at only approximately 10%. The ranges at 90% and 80% of the sill are approximately 110 m and 70 m, respectively.

 

 

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FIGURE 14-10 VELADERO OMNI-DIRECTIONAL CORRELOGRAM

 

 

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RESOURCE ESTIMATION METHODOLOGY

The step by step resource estimation methodology is well described in Zangrandi (2011). The Vulcan C shell file (estima_au11.csh) provides an excellent record of all the steps done in Vulcan to build the resource block model.

The Veladero Mineral Resource model extends from 2,405,900 m to 2,408,800 m east, 6,749,496 m to 6,753,396 m north, and 3,702.5 m to 4,852.5 m in elevation. The 5 m high by 5 m by 5 m block model is populated directly from the lithology, alteration, sub-zone, and grade envelope triangulations and a separate script is run to incorporate the grade domain codes related to the indicator grade domains.

The capped assays were composited into five metre lengths. Composites for gold and silver were created. The composite lithology, alteration, sub-zone, and grade domain codes are back-flagged from the block model.

Veladero used multiple pass inverse distance square (ID²) to interpolate Au and Ag grades for all domains. Length-weighted composites are used.

The search ellipsoids for Au are generally horizontal pancakes for the lithological domains 7, 8 and for all the Amable Zone, and horizontal to sub-horizontal pancakes oriented at 0° to 330° with a range of dips (0° to -10°) for the Filo Federico zone. The search orientations vary for each zone. The longest search ellipsoid radii are 110 m by 110 m by 50 m for the final pass and the shortest search distances are 2.5 m by 2.5 m by 2.5 m for the first pass box search.

There are seven ID² passes used for the interpolation of grades. The first one is the general box pass, which is always run first and is based on a minimum of one composite. The second pass is used for the colluvium domain, which is based on 30 m by 30 m by 30 m radii and a minimum of one composite and a maximum of three composites per hole. The third and the fourth passes are used for the steam heat domain, inside the Medium Grade Domain and inside all grade domains respectively, which are based on 80 m by 80 m by 45 m radii and a minimum of one composite and a maximum of three composite, with a maximum of one composite per hole.

 

 

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There are three more ID² passes used for each of the grade domains within each sub-zone domain and within each alteration domain and within the remaining lithological domains. Each of these passes actually comprises a number of actual interpolation runs.

The fifth passes use a minimum of two composites and a maximum of three composites, with a maximum of one composite per hole. The fifth pass radii are the distances defined by 80% of the omni-directional sill. The sixth pass radii are shorter than the fifth pass radii. The sixth pass, however, uses a minimum of one composite and a maximum of three composites, with a maximum of one composite per hole. The seventh pass radii are the distances defined by 90% of the omni-directional sill. The seventh passes use a minimum of two composites and a maximum of three composites with a maximum of one composite per hole.

The multi-pass interpolation parameters are summarized in Table 14-8.

 

 

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TABLE 14-8 GOLD ESTIMATION PARAMETERS
Barrick Gold Corporation – Veladero Mine

 

            Composite Selection                    Block
Selection
                   Search Orientation      Search Distances     

Composites

 
                                                                                                                            Maximun  

Pass

   Estimation
Type
     Alteration
Domain
     Grade
Domain
     Lithological
Domain
     Zone      Sub-Zone      Alteration
Domain
     Grade
Domain
     Lithological
Domain
     Bearing
(Z)
     Plunge
(Y)
     Dip
(X)
     Major
Axis
     Semi-
Major
Axis
     Minor
Axis
     Min
Samples
per Est
     Max
Samples
per Est
     Sample
per Drill
Hole
 

1

     IDW2         all         all         all         all         all         all         all         all         0         0         0         2.5         2.5         2.5         1         99      

2

     IDW2         8         all         all         all         all         8         all         all         330         0         0         30         30         30         1         99         3   

3

     IDW2         7         2         all         all         all         7         2         all         330         0         0         80         80         45         1         3         1   

4

     IDW2         7         0,1         all         all         all         7         all         all         330         0         0         80         80         45         1         3         1   

5

     IDW2         4,5,6            1,2,3,4,5,6            5,7,8,9,10         4,5,6            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   

5

     IDW2         4,5,6            1,2,3,4,5,6            6         4,5,6            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            8,10         1            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            6         1            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   
           2                     2                                 

5

     IDW2         1,2,3            1,2,3,4,5,6            5,7,9         1            1,2,3,4,5,6,7         330         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            8,10         2,3            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            6         2,3            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   
                 Amable                                          

5

     IDW2         1,2,3            1,2,3,4,5,6            5,7,9         2,3            1,2,3,4,5,6,7         330         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            5,7,8,9,10         1,2,3            1,2,3,4,5,6         35         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            6         1,2,3            1,2,3,4,5,6         35         0         0         70         70         30         2         3         1   
           all                     1                                 

5

     IDW2         4,5,6            1,2,3,4,5,6            5,7         4,5,6            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   

5

     IDW2         4,5,6            1,2,3,4,5,6            6         4,5,6            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3,4,5,6            1,2,3,4,5,6            5,7,8,9,10         1,2,3,4,5,6,8            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   
           0                     all                                 

5

     IDW2         1,2,3,4,5,6            1,2,3,4,5,6            6         1,2,3,4,5,6,8            1,2,3,4,5,6,7         35         0         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            1,2,3,4         1,2,3            1,2,3,4,5,6,7         330         -10         0         50         50         25         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            1,2,3,4         1,2,3            1,2,3,4,5,6,7         330         -10         0         70         70         30         2         3         1   
           2                     2                                 

5

     IDW2         4,5,6            1,2,3,4,5,6            1,2,3,4         4,5,6            1,2,3,4,5,6,7         330         -10         0         50         50         25         2         3         1   

5

     IDW2         4,5,6            1,2,3,4,5,6         Federico         1,2,3,4         4,5,6            1,2,3,4,5,6,7         330         -10         0         70         70         30         2         3         1   

5

     IDW2         1,2,3            1,2,3,4,5,6            1,2,3,4         1,2,3            1,2,3,4,5,6,7         330         -10         0         70         70         30         2         3         1   
           all                     1                                 

5

     IDW2         4,5,6            1,2,3,4,5,6            1,2,3,4         4,5,6            1,2,3,4,5,6,7         330         -10         0         70         70         30         2         3         1   

5

     IDW2         1,2,3,4,5,6         0         1,2,3,4,5,6            1,2,3,4         1,2,3,4,5,6,8         all         1,2,3,4,5,6,7         330         -10         0         70         70         30         2         3         1   

6

     IDW2         4,5,6            1,2,3,4,5,6            5,6,7,8,9,10         4,5,6            1,2,3,4,5,6,7         35         0         0         35         35         15         1         3         1   

6

     IDW2         1,2,3            1,2,3,4,5,6            6,8,10         1            1,2,3,4,5,6,7         35         0         0         35         35         15         1         3         1   

6

     IDW2         1,2,3         2         1,2,3,4,5,6            5,7,9         1         2         1,2,3,4,5,6,7         330         0         0         35         35         15         1         3         1   

6

     IDW2         1,2,3            1,2,3,4,5,6            6,8,10         2,3            1,2,3,4,5,6,7         35         0         0         35         35         15         1         3         1   
                 Amable                                          

6

     IDW2         1,2,3            1,2,3,4,5,6            5,7,9         2,3            1,2,3,4,5,6,7         330         0         0         35         35         15         1         3         1   

6

     IDW2         1,2,3            1,2,3,4,5,6            5,6,7,8,9,10         1,2,3            1,2,3,4,5,6         35         0         0         35         35         15         1         3         1   
           all                     1                                 

6

     IDW2         4,5,6            1,2,3,4,5,6            5,6,7,8,9,10         4,5,6            1,2,3,4,5,6,7         35         0         0         35         35         15         1         3         1   

6

     IDW2         1,2,3,4,5,6         0         1,2,3,4,5,6            5,6,7,8,9,10         1,2,3,4,5,6,8         all         1,2,3,4,5,6,7         35         0         0         35         35         15         1         3         1   

6

     IDW2         1,2,3            1,2,3,4,5,6            1,2,3,4         1,2,3            1,2,3,4,5,6,7         330         -10         0         35         35         15         1         3         1   
           2                     2                                 

6

     IDW2         4,5,6            1,2,3,4,5,6            1,2,3,4         4,5,6            1,2,3,4,5,6,7         330         -10         0         35         35         15         1         3         1   

6

     IDW2         1,2,3            1,2,3,4,5,6         Federico         1,2,3,4         1,2,3            1,2,3,4,5,6,7         330         -10         0         35         35         15         1         3         1   
           all                     1                                 

6

     IDW2         4,5,6            1,2,3,4,5,6            1,2,3,4         4,5,6            1,2,3,4,5,6,7         330         -10         0         35         35         15         1         3         1   

6

     IDW2         1,2,3,4,5,6         0         1,2,3,4,5,6            1,2,3,4         1,2,3,4,5,6,8         all         1,2,3,4,5,6,7         330         -10         0         35         35         15         1         3         1   

7

     IDW2         4,5,6            1,2,3,4,5,6            5,7,8,9,10         4,5,6            1,2,3,4,5,6,7         35         0         0         110         110         50         2         3         1   

7

     IDW2         4,5,6            1,2,3,4,5,6            6         4,5,6            1,2,3,4,5,6,7         35         0         0         110         110         50         2         3         1   

7

     IDW2         1,2,3            1,2,3,4,5,6            8,10         1            1,2,3,4,5,6,7         35         0         0         110         110         50         2         3         1   

7

     IDW2         1,2,3            1,2,3,4,5,6            6         1            1,2,3,4,5,6,7         35         0         0         110         110         50         2         3         1   
           2                     2                                 

7

     IDW2         1,2,3            1,2,3,4,5,6            5,7,9         1            1,2,3,4,5,6,7         330         0         0         110         110         50         2         3         1   

7

     IDW2         1,2,3            1,2,3,4,5,6            8,10         2,3            1,2,3,4,5,6,7         35         0         0         110         110         50         2         3         1   

7

     IDW2         1,2,3            1,2,3,4,5,6            6         2,3            1,2,3,4,5,6,7         35         0         0         110         110         50         2         3         1   
                 Amable                                          

7

     IDW2         1,2,3            1,2,3,4,5,6            5,7,9         2,3