Nord Pacific and Cominco had been investigating the feasibility of building and operating a hydrometallurgical treatment plant based on the latter’s proprietary technology.
Teck Cominco points out that samples from the deposit were deemed amenable to the technology, and that the project could become attractive if economic conditions improve.
Earlier this summer, Nord Pacific failed to make a required payment for the Tritton copper project, prompting its partner, Australian-listed Straits Resources, to seek redress.
A year ago, Nord Pac sought to buy the half of the Tritton project it did not already own. The agreement called for the junior to pay A$9 million (US$4.7 million) to Straits, the vendor.
Nord Pac paid A$3 million upon signing and agreed to make four semi-annual payments of A$750,000, followed by six payments of A$500,000 when production began.
However, Nord Pac recently underwent a change in management and is strapped for cash. The company decided not to make the US$750,000 payment that was due June 1. Straits filed a default notice and requested remedies available under the contract.
Nord Pac also announced that it would be unable to pay a bill to accounting consultant KPMG to complete its year-end financial statements.
Nord Pac has already missed the first deadline for filing financial statements. In late July, the company was suspended from trading on the Toronto Stock Exchange because of its failure to meet listing requirements.
Nord Pac says it had negotiated a tentative agreement to acquire Straits’ interests in the Girilambone mine and facilities and to pay the remaining amounts due on the Tritton property purchase but that the deal was tied to Teck Cominco’s participation.
Nord Pacific is now looking to renegotiate the draft agreement with Straits.
The Tritton deposit is a lens of copper mineralization 12 miles south of the Girilambone copper mine.
Straits operates Girilambone, which is nearing the end of its life, through a 60-40 joint venture with Nord Pacific. Straits retains the right to acquire Nord Pac’s 40% stake through the Tritton transaction.
Nord Pac had hoped to develop Tritton as an underground operation, with copper production pegged at 40 million lbs. per year for seven years. A year ago, reserves stood at 5.1 million tons grading 3.14% copper within a resource of 10.2 million tons of 2.6% copper.
In addition, the company has a 100% interest in the Tabar Islands gold project in Papua New Guinea.
Nord Pac is 28.5%-owned by
As part of a cost-cutting plan, Nord Pac’s chief executive officer, Leland Erdahl, has agreed to step down from his duties as officer and director and to continue unpaid with the company. John Roberts, a director, will assume the position of chairman. Mark Welch, the company’s vice-president of development, will assume the positions of president and CEO.
Nord Pac says it hopes to produce copper from Girilambone until it can develop Tritton.
If gold prices improve sufficiently, the company says it will consider developing its fully permitted Simberi project in Papua New Guinea.
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