McLeese Lake to Gibraltar’s liking

First-quarter copper production from the McLeese Lake open-pit mine of Gibraltar Mines (TSE) in central British Columbia totaled 15.3 million lb. at a cash cost of US88 cents per lb.

The mine, which re-opened in September, 1994, after a 9-month shutdown, ran at full capacity during the quarter. Mill throughput averaged 42,000 tons per day grading 0.26% copper, with recoveries averaging 74.66%.

Gibraltar is reviewing its long-term mine plan and will begin recommissioning the mill’s molybdenum circuit at a cost of $1.3 million. The circuit is expected to resume operation in October, when the moly grade of mine ore is scheduled to rise to economic levels.

Output of moly is projected at 60,000 lb. per month at a cash cost of $3.40 per lb. The average moly price during the first quarter was US$14.50 per lb. As for copper, production in 1995 is expected to total 65 million lb. at a cash cost of US90 cents per lb.

In the past, Gibraltar had talked of boosting the milling capacity by 50%, but President William Myckatyn says the company is now intent on operating the mine as a long-life asset.

The mine has proved profitable, he points out, and Gibraltar can use the funds to finance development work on other projects. Therefore, in an effort to protect the property and keep it operating, Gibraltar has become much more active with its hedging.

Meanwhile, high copper prices helped Gibraltar record a profit of $714,000 for the first quarter, on revenue of $23.2 million.

The company is continuing with feasibility work at its Lomas Bayas project in Chile. As of March 31, about US$2.6 million of the estimated US$6.95 million budget for the feasibility study had been spent.

Drilling is confirming resource estimates of 88.3 million tons grading 0.68% copper in the Tirana and Andacollo-Candelaria zones. Also outlined is a low-grade resource of 100 million tons grading 0.27% copper.

Deep drilling below the Tirana zone is confirming that mineralization extends well below the previously designed pit floor. Also, condemnation drilling at Lomas Bayas identified additional mineralized areas, and a US$412,000 exploration program is planned in order to test several targets.

The condemnation drilling is being conducted east of Lomas Bayas in an area where several zones have been encountered. These include a 177-ft. intersection grading 0.94% copper, which bottoms in mineralization at a depth of 500 ft.

Meanwhile, stepout drilling, northeast of Candelaria, has hit a high-grade zone. One hole returned 177 ft. grading 3.52% copper, while a second angle hole (drilled perpendicular to the first) encountered 492 ft. grading 3.1% copper, including a 26-ft. interval grading 25.3% copper.

Drilling will also test a large magnetic anomaly similar to that which exists over Lomas Bayas. The structure is about 2 miles northeast of Lomas Bayas in an overburden-covered valley.

Preliminary estimates put the cost of a 22,000-ton-per-day copper-leaching operation at US$157 million. Annual output is projected at 100 million lb. copper at a cash cost of US52 cents per lb. Feasibility work is expected to wind down in the fourth quarter.