The Vermelhos District is located 60 km north of the Caraíba Mine (Figure 7-2). In this district, copper mineralization has been identified over 2.6 km in a NNW direction including the Siriema deposit, the Vermelhos Mine, and the N8 and N9 deposits (Figure 7-28). Current exploration has identified copper mineralization over 10km in a NNW direction.

The Vermelhos Mine area is largely covered by quartz-rich colluvium with rare outcrops occurring along drainages.

The deposits are located within the gneiss of Tanque Novo Complex, comprising orthogneiss (enderbites and tonalites gneiss) and paragneiss which have undergone granulite facies metamorphism and were cross-cut by mafic to ultramafic intrusions. The mafic rocks are composed of the norites, gabbros, and gabbro-norites. The ultramafic rocks are the main ore host of the copper mineralization and are composed by the pyroxenites and melanorites (Figure 7-29, Figure 7-30 and Figure 7-31). The gneiss and mafic-ultramafic rocks are cross-cut by late, steep westerly-dipping, NS to NNE-SSW trending, granite and pegmatite dykes measuring a few centimeters up to 40m thick. The pegmatite dykes extend from the Siriema deposit to the N8 deposit. Minor late quartz veins and diabase dykes cross-cut all lithologies.

The main sulphides of the deposits in the Vermelhos district consist of chalcopyrite (approximately 70 to 75%), bornite (20 to 25%) and minor chalcocite. The chalcopyrite contains low concentration of nickel impurities (Tappert, 2020). Copper sulphides are associated with minor pyrite, pyrrhotite, pentlandite as well as chromite and magnetite. Sulphide textures include interstitial, net-textured, stringer and sulphide-rich matrix breccias (Figure 7-33 to Figure 7-36). Evidence throughout the Curaçá Valley of sulphide zonation, characterized as pyrrhotite +/- pentlandite zoning to pyrrhotite +/- pentlandite plus chalcopyrite and finally to chalcopyrite plus bornite is more common in the Vermelhos District (Figure 7-35, B), both within the Vemelhos UG Mine and at Siriema. High-grade mineralization in the Vermelhos District is often closely associated with phlogopite enrichment. Copper mineralization can also occur in altered zones in the gneiss, in pegmatites and silica altered zones (Figure 7-32, E). The nickel, cobalt and PGE content tends to be higher in the Siriema deposit than in Vermelhos and the N8 and N9 deposits but further analytical work is needed to confirm these observations. The detailed textures observed on polished slabs of sulphides show intergrowths of chalcopyrite, pentlandite, chromite, pyrrhotite and bornite (Figure 7-37).

Oxidized mineralization occurs as malachite (Figure 7-36) and chrysocolla within the weathered zone that occurs from 15 m to 40 m depth and, to date, is only associated with mafic-ultramafic rocks in the Vermelhos District.

As currently defined, mineralization at Vermelhos UG Mine generally occurs within both flat-lying and vertical bodies that trend north-south and plunge to the north.

For the purposes of defining geologic zones of interest, a value of 0.20% Cu was selected to delineate near-surface low-grade mineralized lenses. In contrast, a value of 0.45% Cu was used to delineate higher grade lenses that occur at depth. Three dominant mineralized geological Domains were generated at the Vermelhos UG Mine.

The Vermelhos UG Mine is located approximately 80 km north of the Pilar UG Mine and the Caraíba Mill. Trial mining and test metallurgical processing started in the third quarter of 2018. Following receipt of the Mine’s Operating License on October 10, 2018, average daily production rates are ramping up to 2,500 tonnes of ore per day. The current envisioned mine depth is limited to 300 m below surface.

For Vermelhos UG Mine and C12 UG Mine, Sublevel Open Stoping method (“SOS”) is the mining method currently in use at Vermelhos and planned for the C12 UG Mine.

The SOS method was chosen as the mining method at Vermelhos UG Mine considering the dip, plunge and thickness of the orebodies as well as the rock quality designation and overall competence of the host rock. Variations of this method are planned for the central area for maximum possible recovery using the cemented rockfill (“CRF”) technique.

Within the Vermelhos UG Mine, the vertical sections of the deposit typically range from 2.5m to 8.0m wide, with strike dimensions of up to 80.0m. Within the sub-horizontal high-grade portion of the deposit (Tobogã, or “Toboggan”) the dimensions are approximately 195m in length, 75m in thickness and 23m to 27m in height.

The mine design, currently in practice, entails mining panels of 25m to 30m, on average, in the vertical dimension without the need for rib pillars to support the open excavations. In the central and western highgrade areas (the “Tobogã”) mining occurs using sub-horizontal stopes. In these areas, the panel size has been reduced to 25m and is filled using CRF to maximize mining recoveries and limit in-situ stresses.

Similar to Pilar UG mine, Vermelhos UG Mine ramp development utilizes a maximum design grade of 15% and 25m radius on center (same parameters as the Pilar UG Mine). Ramp design targets an average distance of 30m from the ramp to ore gallery access to limit access development meterage.

Gallery access design dimensions of 4.5m x 5.0m are employed due to the size of the equipment operated by MCSA and the infrastructure necessary for further development of the galleries (ventilation ducts and production equipment access). Production galleries design dimensions are 4.5m x 5.0m. Transport crosscuts are located at an average distance of 35m from the ore body and parallel to the mineralized zone.

The ore production of Vermelhos UG includes two handling phases: mine-to-pile and pile-to-plant handling.
1. The mine-to-pile production is carried out via the primary ramp utilizing haulage equipment, over a current average haulage distance of 2.5 km to the stockpile area on surface. The average loaded tonnage of the articulated trucks that transport ore to the surface is 25 tonnes.
2. For the pile-to-plant production, 50 tonne excavators and bi-train haul trucks contracted through a third-party materials handling company are used, with an average loaded tonnage of 72 tonnes per bi-train. The distance traveled from the pile to the plant is approximately 70 km. Linked to the mining process, there is the cement rock fill activity of the exhausted stopes. The rock-fill is prepared on a surface plant by crushing and mixing the waste with water and cement, and then moved from the surface to the previously mined stopes via the primary ramp by 25 tonne trucks.

To enable maximum recovery of the high-grade reserve of the Vermelhos UG Mine, CRF is used to fill the voids after primary stopes have been mined, thereby allowing adjacent secondary stopes to be mined after curing. Rock-fill is prepared on surface plant by crushing and mixing the waste with water and cement and transported from the surface to the stopes for filling via ramp by 25 tonne trucks.

In September 2020, an expansion of the rock-fill plant was completed, increasing the capacity from 23kt/month to 38kt/month. The expansion included an installation of a secondary crusher, breaker hammer and mixer.

Threestage crushing is used to prepare a nominal 12.5mm top size crushed feed for the ball milling circuit that also feeds the regrind mill circuit prior to being sent to flotation for the recovery of copper-bearing minerals.

There are two primary crushing operations. Ore from other mining sites is delivered to the surface primary gyro crusher, featuring a nominal capacity of 1,600t/h. Ore from underground mining is crushed underground by one of two primary jaw crushers with a nominal capacity of 400t/h each. Feed enters the primary crushing operations with maximum size of 48” and is discharged with maximum size of 10”.

The blended product of the primary crushing operations is transported via conveyors to a feeder stockpile with a capacity of 12,000 tonnes. The stockpile feeds two primary double deck screens, configured with 100mm aperture on the top and 40mm aperture on the bottom decks. The material over 40mm feeds one of two secondary cone crushers (seven-feet (“ft.”) standard Symons; 1,400t/h of capacity each) set to 28mm aperture. Screen undersize and secondary crushers products discharge onto one conveyor in an open circuit configuration.

Secondary cone crusher discharge and primary screen fines are blended with tertiary crusher discharge and are conveyed to the seven secondary double screen decks, configured with 25mm aperture on the top and 16mm aperture on the bottom decks. Tertiary crushing is performed with four standard CH660 Sandvik cone crushers (capacity of 350t/h each) set to 20mm aperture. Oversize material passes to the tertiary crushers operating in a closed-circuit configuration. Final product from the combined crushing and screening operations is 88% passing 1/2”.

Crushed ore is conveyed to the stacker-reclaimer system to further homogenize the ore for feeding the plant. The stacker-reclaimer system is comprised of a two-armed stacker and a 16 bucket-wheel reclaimer with capacities of 1,600t/h and 1,200t/h, respectively. Crushed ore capacity of the stacker-reclaim system is currently 140,000 tonnes.

GRINDING
The grinding circuit consists of two identical lines operating with a primary ball mill operating in closed circuit with a dedicated battery of 26” hydro-cyclones. Each ball mill is 5.0 m by 7.6 m, charged with 90 mm in diameter high chrome cast steel balls. The nominal grinding capacity of each mill is 200 t/h each. Typical ball consumption is 340 g/t.

Blended ore from the stacker reclaimer is withdrawn through belt feeders below one of the 3,000 tonne ore silos that are interconnected. Ore is delivered to the ball mill over a belt weightometer to control and measure the mass of ore sent to each mill for metallurgical accounting purposes.

The coarse fraction from the cyclone underflow recycles to the ball mill feed chute for further grinding. Overflow from both grinding lines combines as feed to the high frequency screeners and regrinding circuit.

HIGH FREQUENCY SCREENS AND REGRINDING CIRCUIT
The cyclone oversize is pumped to high frequency screening operations comprised of eight screens with five decks each of 105+ micron aperture. The high frequency screening coarse fraction is gravity fed to the vertical mill (STM HIG Mill HIG2300/23000) for regrinding, operating in an open circuit. The HIG Mill (High Intensity Grinding mill) was commission in September 2020. The screening operation fines combine with the regrind mill product and are pumped to the flotation.

The Caraíba Mill has been producing copper concentrate since commissioning in 1979 and has benefited from improvement projects over the years, including most recently those undertaken by Ero Copper. The mill has been designed to process ore from both the Pilar UG Mine, via a production shaft supported by two primary underground jaw crushers as well as ore from throughout the Curaçá Valley (including within the Vermelhos and Surubim Districts) via a primary cone crusher located on surface. In its current configuration, the plant is capable of processing a nominal 3.2 million tonnes of copper ore per annum assuming 91% availability. Pursuant to the current LOM plan, the milling capacity of the Caraíba Mill will be increased to 4.2 million tonnes per annum (“Mtpa”) through integration of the Company’s high intensity grinding mill (“HIG Mill”) that was successfully installed during the third quarter of 2020, and a to-be-installed high pressure grinding roll (“HPGR”). In support of the LOM ........