The Sao Francisco mine is an open-pit, heap leach gold mine located in western Mato Grosso State, Brazil, approximately 560 kilometres west of Cuiaba, the state capital, and approximately 50 kilometres southeast of the Sao Vicente mine in the prolific Guapore gold belt. The Sao Francisco mine can be accessed via highway from Cuiaba, which is serviced by several daily flights from a number of Brazilian cities. A power line connects the Sao Francisco mine to the national grid and water is readily available. The property consists of four contiguous mining and exploration permits, covering approximately 16,370 hectares.
Subsequent to acquiring the Sao Francisco mine in April 2010, a 7.8 million tonne dedicated waste stripping program was completed between December 2010 and April 2011. During the dedicated waste stripping period, considerable effort was put into preparing the mine for longer term, sustainable operations, with an improved pit configuration and layout that would enhance production, reduce waste dilution and improve safety. A number of plant improvements were also undertaken during this period to increase throughout in the crushing and processing plant.
Upon recommencement of normal operations early in the second quarter of 2011, a new mine plan was implemented. A key aspect of this new plan is the processing of higher-grade crushing-gravity gold recovery heap leach ore (CGO) and the stockpiling of lower-grade run-of-mine heap leach ore (DLO) nearby the primary crusher with the plan to crush and process this material at the end of the mine life. Previously, the DLO was hauled approximately four kilometres directly to the leach pads from the pit by the mine contractor. Based on current contractor rates, current Brazilian real to US dollar exchange rates and fuel costs, this practice was deemed marginal. Along with longer truck cycle times, this resulted in reduced truck availability for ore and waste movement. Crushing and processing the low-grade ore material will result in immediate savings in haulage costs and better recoveries on the lower-grade material when it is processed.