The mining properties that comprises the Cerro Vanguardia Mining Group and the mineral resource existing therein are property of Fomicruz. Its discovery occurred in the late 1970s through the Patagonia Comahue Geological Mining Plan, later being a National Reserve Area and in 1987 it became a Provincial Reserve Area. In 1988 the Province of Santa Cruz created the mining state company Fomento Minero de Santa Cruz (FOMICRUZ SE), mainly to administer the mining rights of Cerro Vanguardia with a legal figure that allows to have the ownership of the mining rights and to favor their development in a framework that best preserves the interests of the Province.
After carrying out exploration programs in the area a bidding process was opened in the 1990s that allowed the conformation of MINCRUZ Joint Venture that was formed by Fomicruz SE and Minera Mincorp SA., the latter integrated by Anglo American Corporation (now AngloGold Ashanti) and Perez Companc (who retired from society in 2001). In 1992 the advanced exploration of the project begun until 1996 when the Economic Feasibility Study led to the decision to start the development stage and subsequent production of the project.
Cerro Vanguardia poured its first gold in late 1998 and has been in production since with at least a forecast of 5 more years ahead. The exploitation method is simultaneously open pit and underground, using all safety and efficiency standards.
The operation of the deposit is in charge of Cerro Vanguardia SA (AngloGold Ashanti 92.5% and Fomicruz SE 7,5%) under an Usufruct Mineral Agreement in force since 1996 and for the period of 40 years.
La Josefina Exploration Contract:
In 2007, after a Public Bidding process, the Project was awarded to the Cerro Cazador (wholly-owned subsidiary of Hunt Mining Corp.), which was improved with the signing of an exploration and eventual exploitation contract, with a business scheme based on shareholding and variable mining usufruct, according to the reimbursement of the investments made by Fomicruz. To date, the company has met and exceeded the investment commitment assumed in the contract. More than 65,000 m of drilling have been drilled and a pre-feasibility study has been completed with an indicated resource of 280,000 of gold equivalent ounces. Cerro Cazador continues carrying out exploratory works to increase reserves and advance the feasibility of exploitation
La Valenciana Private Initiative:
In 2011 Cerro Cazador presented a Private Initiative for the La Valenciana Area with a business proposal similar to La Josefina. This proposal was accepted by Fomicruz at the end of 2012. From 2013, exploration works have been developed, including geological mapping, surface samplings, and 3000 m of HQ core drilling were completed. The extension of the exploration program is certain to define mineral resources with economic potential.
In both areas (La Josefina and La Valenciana) Fomicruz carried out diverse exploration programs before awarding the areas to the private company. During this exploration stage (mapping, sampling, geophysics and drilling), targets with economic potential were defined and ready to be developed with greater investments. Cerro Cazador is planning to operate both areas jointly in order to have a resource of greater volume.
Patagonia Gold S.A. is an Argentinean junior mining company with an important presence in the Patagonia Region. This is a strategic association for Fomicruz to explore and exploit precious metals in the Deseado Massif, in which it holds 10% share in the assets that may be developed together as the Agreement says.
The properties are located approximately 160 km SW of the town of Perito Moreno. Patagonia Gold currently has two operating projects: Cap Oeste and Lomada de Leiva (currently in operation) and Fomicruz owns the mining rights of Kaikén, La Marcelina, San Vicente, El Cóndor, La Esperanza and La Última projects, while correspond to Patagonia Gold the mining properties of Cap Oeste and Lomada de Leiva projects
In 2008, the private initiative for the formation of a partnership with Extorre Gold Mines was presented, with the contribution from Fomicruz of the block of properties called Bahia Laura with a total of 69,256 hectares and the Cerro Moro project from Extorre.
Between 2009 to 2012, Extorre (then Yamana Gold as from 2012) developed exploration programs on these properties which included mapping, sampling, geophysics and more than 14,000 meters of drilling.
Three sectors of interest have been defined with encouraging results for the gold and silver content. These results are available in the technical reports presented by the company recently. Currently, Yamana continues with the development and construction of the Cerro Moro Project, expected to start producing soon.