El Penon is located some 160 km to the south-east of the Chilean coastal city of Antofagasta at an elevation of 1400 m. It defines a new gold district and is in the same vicinity as the Escondida copper mine.
After the discovery hole was drilled in early 1994, the deposit was proved, and following a 10 month construction period, the first gold was poured in September 1999.
The deposit is associated with an approximately 60 Ma rhyolite dome complex which intrudes a sequence of volcanics (dacite flows, tuffs and volcaniclastics). The rhyolite complex represents multi-phase intrusive and extrusive activity.
The El Penon deposit comprises a low sulphidation adularia-sericite epithermal vein system that is related to the rhyolitic dome complex, both temporally and spatially. The mineralisation, which is strongly fault controlled, has been dated at 59.4 ± 1.4 Ma by K/Ar dating of the Adularia. The main NNW trending mineralised faults dip at 80° west, while the NNE trending faults dip at 65 to 75° east or west. These faults are predominantly dip-slip and reflect both extensional and compressional regimes.
Alteration is dominated by quartz ± adularia replacement or flooding within or near the veins systems, grading outwards into quartz-sericite/illite ± adularia. Argillisation is locally developed with in rhyolite, although argillic and sericitic alteration is best developed in the ash flow tuffs and dacite flows of the dome complex.
Gold and silver are associated with a variety of quartz vein textures and grain sizes. Chalcedonic to coarse-grained quartz is found in banded, saccharoidal, comb and bladed carbonate replacement vein textures. Hydrothermal brecciation is common, having prepared the brittle rhyolites for vein emplacement, resulting in zones that are locally up to 22 m in true width. The mineralised veins are believed to have formed from periodically boiling low salinity (< 2 wt% NaCl) fluids at between <200 to 255° C.
The oxide zone which extends 250 to 280 m below the current surface comprises largely silver halides, native gold and silver, and electrum with varying fineness. Base metals are rare in both the oxide and primary ore, although trace sphalerite, galena and chalcopyrite are found in the early banded veins in the unoxidised ore.
During 2000 production totalled 9 t (0.289 Moz) Au and 124 t (4 Moz) Ag at an average gold recovery of 94% and cash cost of $US 48 (total production cost of $US 96) per oz.
Reserves and resources at 31 December, 2000 (Meridion Gold) were:
Proven + probable reserve -4.7 Mt @ 10.1 g/t Au, 186 g/t Ag for 47 t (1.532 Moz) Au.
Mineral resources total 4.5 Mt @ 8.4 g/t Au. 160 g/t Ag for another 38 t (1.217 Moz) of Au.
Reserves and resources at 31 December, 2010 (Yamana Gold website) were:
Proven + probable reserve - 8.55 Mt @ 7.29 g/t Au, 188.6 g/t Ag, for 5.47 t Au; plus
Measured + indicated resource - 2.66 Mt @ 8.85 g/t Au, 236.5 g/t Ag, for 23.6 t Au; plus
Inferred resource - 4.47 Mt @ 8.12 g/t Au, 258.2 g/t Ag, for 36 t Au.
(Source: Porter Geoconsultancy, http://www.portergeo.com.au/, 2008)