Gibraltar to buy Chilean project

Toronto-listed Gibraltar Mines has opted to buy the Lomas Bayas copper property in Chile for US$14 million.

The company will assume a royalty on copper production of US2 cents per lb., capped at US$3.8 million.

An oxide deposit, Lomas Bayas lies 110 km northeast of Antofagasta. Based on a cutoff of 0.36% copper, it is estimated to contain a reserve, minable by open-pit methods, of 80.1 million tonnes grading 0.68% copper. A further 90.7 million tonnes of lower-grade material grading 0.27% copper were also outlined, which brings the total resource to 170.8 million tonnes grading 0.46% copper.

At presstime, Gibraltar announced the discovery of a new zone of mineralization situated below alluvium to the northwest of the known resource. Based on assay results from 10 drill holes, the new Gordo zone is estimated to contain a potential geologic resource totaling 36 million tonnes and averaging 0.5% total copper at a 0.36% cutoff. There exists an additional 36 million tonnes of low-grade material ranging from 0.2% to 0.36% copper. This resource is near surface and amenable to open-pit mining. The post-feasibility capital cost is projected at US$157 million for a solvent extraction-electrowinning operation that will produce 45,350 tonnes (100 million lb.) of cathode copper per year over an 11-year mine life. Operating costs are estimated at US52 cents per lb.

A budget of US$7 million has been set for a feasibility study, which will include drilling, metallurgical testing and basic engineering. The study is expected to last one year.