Gibraltar adds to copper interests

An expanding Gibraltar Mines (TSE) intends to acquire the Lomas Bayas copper property in Chile.

The decision — part of a corporate thrust to become a multi-mine copper producer — follows a joint-venture agreement with Imperial Metals (TSE) to explore the Mt. Polley deposit (T.N.M., March 21/94).

Lomas Bayas is 65 miles northeast of Antofagasta and contains a preliminary oxide reserve of 79 million tons grading 0.76% copper at a stripping ratio of about 2-to-1.

An 18,000-ton-per-day, heap-leach, solvent extraction-electrowinning operation is envisaged and a preliminary estimate of the capital cost is US$130 million.

Based on a recovery of 80%, the mine would throw off about 81 million lb. copper per year at an operating cost of roughly US55 cents per lb. According to the terms of an initial option period, Gibraltar will pay US$840,000 cash on May 10, a further US$1 million before Aug. 1 and spend US$1 million on the property by Oct. 31.

To exercise the option and acquire the property, Gibraltar must pay a further US$14 million before Nov. 1 and assume a royalty of US2 cents per lb., capped at US$3.8 million.

Drilling and metallurgical testing are planned, to confirm the assumptions used in the preliminary evaluation.

The deposit is thought to be open in several directions and Gibraltar sees good potential for discovering new reserves.