Cominco Resources may sell Chilean assets

London- based N.M. Rothschild & Sons and its Canadian affiliate have been retained by Cominco Resources International (TSE) to examine the potential for selling the company’s interests in several Chilean gold properties. The assets include a 50% interest in the Lobo gold deposit, now at the prefeasibility stage, and various interests in the less advanced Valay, Escondido and Soledad properties. All the properties are in the active Maricunga district.

If Cominco Resources decides to proceed with the divestiture, an information package describing the properties will be made available early next year.

In the meantime, the company plans to continue work on the Quebrada Blanca copper deposit in Chile, and continue exploring for gold and base metals in selected countries throughout the world, including Chile, Turkey, Mexico and the U.S.

A company spokesman said the decision to examine the sale of the Chilean assets was made so that financial resources could be directed to the promising Quebrada Blanca copper project in Chile and to various other key projects.

At Quebrada Blanca, where Cominco Resources and parent Cominco (TSE) each holds about a 42.5% interest, a feasibility study is examining production of 75,000 tonnes of cathode copper per year by leaching, solvent extraction and electrowinning.

Cominco Resources expects to become more involved in Mexican projects now that positive changes to the country’s mining law have been made. It is already looking to a highly profitable year (1991) at its 49% owned Maria copper mine in Mexico which is operated by a Mexican joint venture partner.

The partners received $1.8 million from the sale of direct shipping ore grading 12% copper in the quarter ended Sept. 30. The planned operating rate of 500 tonnes per day should be reached early next year, and at this rate, Cominco Resources’ share of copper production from the Maria property is expected to be about 20 million lb. in 1991.

But operating losses were reported by Cominco Resources for its 50% owned Glenbrook nickel smelter in Oregon, the 76.4% owned Buckhorn gold mine in Nevada, and the 25.7% owned Marte gold mine in Chile. (All operating losses at Marte are being funded by Anglo American, the major shareholder and operator.)

As a result, the company reported a hefty loss of $22.1 million, or 49 cents per share, for the nine months ended Sept. 30, compared with a loss of $8.1 million for the comparable period in 1989. The loss for the nine months includes worldwide exploration and development expenditures of $9.8 million plus various other costs.