CAP desalination plant planned to supply Chile's El Zorro project

Chilean mining and steel company CAP and Australia's Tesoro Resources signed an MOU to evaluate water supply options for the El Zorro gold project.

Patricia López, the chairwoman of Atacama-focused desalination subsidiary Aguas CAP, was quoted as saying in a press release that "the company has carried out brine tests, which yielded positive results in its mining process."

The MOU will serve to secure water resources for the development of El Zorro, which is 25km from a multipurpose desalination plant owned by Cleanairtech, a company jointly owned by CAP Group and Mitsubishi Corp.

El Zorro involves initial capital of US$132 million and is in the advanced exploration phase. In its initial phase, it is expected to produce an annual average of 93,000oz.

Meanwhile, Aguas CAP is carrying out studies to expand the plant's capacity from 400l/s to 600l/s in the short term, López said, referring to rising demand from the local mining, energy and agricultural sectors.

El Zorro is managed by local unit Tesoro Mining, which holds concessions near power lines, a port and cover the Ternera deposit.

The company is preparing technical and financial studies to define the project roadmap, in parallel with metallurgical testing, exploration and permitting management, Tesoro said in a March presentation.

El Zorro has a net present value of US$302mn, more than 570km2 of unexplored area, and counts with major player Gold Fields as strategic investor, which owns a 19% stake.