Low cost zinc and lead production

CAML took 100% ownership of the Sasa underground zinc-lead mine in November 2017. The mine is located in north eastern Macedonia, approximately 150km east of the capital city, Skopje, and 10km north of local town, Makedonska Kamenica.

The Sasa deposit was discovered during a period of exploration between 1954 and 1965. Trial mining commenced in 1965 and, in 1966, the mine commenced commercial production as a state-owned entity. The mine closed in 2002 and was placed into bankruptcy due to lack of funding. The Solway Investments Group subsequently purchased the mine, invested in new equipment and operations resumed in 2006. Solway Group later sold the mine to Fusion Capital and Orion Mine Finance Group in 2015.

Sasa lies within the Serbo-Macedonian Massif, which hosts a large number of lead and zinc deposits and extends through Serbia, Macedonia, Bulgaria, eastern Greece and into Turkey. The mine’s Svinja Reka and Golema Reka deposits are located on the eastern flank of a copper molybdenum porphyry deposit at Osogovo. Mineralisation occurs as stratiform deposits hosted predominantly by schists and marbles at Svinja Reka and by gneisses at Golema Reka. Hydrothermal fluids and bedding parallel faulting are responsible for the metasomatism of the host sediments that produce the skarn and base metal mineralisation. The deposits are well defined lenses of lead zinc silver mineralisation, which dip at about 35 degrees and range in thickness from 2 metres to 30 metres.

20

year Sasa mine life

Recent Production

The following table shows recent Sasa mine and concentrate production for the past five years.

Year Units 2012 2013 2014 2015 2016
Plant Feed
Feed dmt 754,153 774,007 780,285 777,121 779,231
Pb grade % 3.93 4.13 4.16 4.04 3.95
Zn grade % 3.35 3.47 3.48 3.52 3.41
Pb in feed t 29,658 31,982 32, 475 31,375 30,761
Zn in feed t 25,280 26,858 27,192 27,370 26,599
Lead concentrate
Production dmt 38,025 40, 996 41,631 40,162 39,507
Recovery % 94.42 94.37 94.51 94.10 94.13
Grade % 73.64 73.62 73.73 73.51 73.29
Pb in concentrate t 28,003 30,181 30,693 29,524 28,955
Zinc concentrate
Production dmt 43,140 46,228 46,920 47,159 45,548
Recovery % 86.20 86.31 86.50 85.77 84.64
Grade % 50.51 50.15 50.13 49.78 49.43
Zn in concentrate t 21,789 23,182 23,522 23,476 22,515

Mineral Resource and Ore Reserve estimate, July 2017

Ore Reserves

Tonnage Grades Contained
Svinja Reka Mt Pb % Zn % Ag g/t Pb (kt) Zn (kt) Ag (koz)
Probable 10.9 3.9 3.1 18.4 421 337 6,447

Mineral Resources

Tonnage Grades Contained
Mt Pb % Zn % Ag g/t Pb (kt) Zn (kt) Ag (koz)
Svinja Reka
Indicated 13.3 4.6 3.7 22.0 611 490 9,403
Inferred 2.7 3.2 2.1 16.6 84 56 1,426
Total 16.0 4.3 3.4 21.1 695 546 10,829
Golema Reka
Inferred 7.4 3.7 1.5 18.6 273 112 4,424
Total 7.4 3.7 1.5 18.6 273 112 4,424

Note 1: Svinja Reka Mineral Resources are estimated at a $35/t NSR cut off and Golema Reka Mineral Resources are estimated at a $30/t NSR cut off.

Note 2: Mineral Resources are reported inclusive of that material used to derive the Ore Reserves

How we produce zinc and lead concentrates

Sasa is an underground zinc and lead mine that produces approximately 780,000 tonnes of ore each year. Accessed by adit, the Svinja Reka deposit is mined using a sub-level caving method, which utilises the geotechnical characteristics of the weak hanging wall to allow the rock to cave naturally into the void remaining after ore has been blasted.

Main haulage levels are at 80 metre intervals, with sub-levels every 7 metres. Ore drives are typically 3.5 metres by 3.5 metres. Ore is mined with predominantly Atlas Copco equipment, using a top down approach without backfill. Ore is drilled using single boom jumbos, blasted and then excavated with underground loaders.

Once blasted, 70% of the ore is then sent via ore passes to the 830m level where it is transported by rail wagons to the Golema Reka shaft for hoisting, and the remaining 30% is hauled to surface using Atlas Copco 20t trucks via the adit.

Once at surface, ore is then crushed in two stages – initially with a Metso jaw crusher and then with a Metso secondary cone crusher. The milling circuit then involves two rod mills, followed by spiral classifiers and then two ball mills to ensure material is the appropriate size for liberation by flotation at approximately 74 microns.

The processing plant then operates both lead and zinc flotation processes, producing separate concentrates that are filter pressed to produce products containing 5-9% moisture. Silver is also produced and this reports to the lead concentrate. The lead concentrate contains c.73% lead and the zinc concentrate contains c.49% zinc. The concentrates are stored in two separate bays before being loaded into haulage trucks for sale to smelters.

Tailngs from the Sasa processing plant are stored in storage facilities (TSF) on site. TSF 3.2 is currently active, with TSF 4 under construction and scheduled for commissioning in Q4 2018.

Streaming agreement with Osisko Gold Royalties

Due to a long standing streaming agreement with Osisko Gold Royalties, CAML will receive $5/oz for its silver production for the life of the Sasa mine.

Sasa simplified process flow sheet
Click to enlarge
780,000

tonnes of ore mined annually