Indochina revises plans for Monywa

Indochina Goldfields (ING-T) intends to reduce capital costs and speed up construction at its Monywa open-pit copper project in central Myanmar.

The company hopes to cut costs by about US$35 million by making maximum use of process facilities and equipment already on site, company President Edward Flood said.

The new capital cost estimate is US$90 million, down from the previous estimate of US$125 million.

“We’ve advanced the timetable for some of the detail engineering and design work,” Flood said. “We’re now on track to have mine construction begin in the second quarter of 1997.”

Copper production will begin in the second quarter of 1998 — six months ahead of the original schedule. The mine is expected to yield 25,000 tonnes of refined copper per year over a period of 20 years. The cash operating cost is projected at US45 cents per lb. (based on a copper price of US90 cents per lb. over the life of the project).

The Monywa copper project is being operated by Myanmar-Ivanhoe Copper Co., a 50-50 joint venture between Ivanhoe Myanmar Holdings (a subsidiary of Indochina Goldfields) and Mining Enterprise No. 1 (owned by the government of Myanmar).

The entire project could eventually produce more than 125,000 tonnes of refined copper cathode a year, Indochina says. The amount will depend on the results of core drilling, now under way on the large, underdeveloped Letpadaung deposit.

The overall, drill-indicated copper resource is estimated at 1.1 billion tonnes grading 0.41% copper, sufficient to support a large-scale, low-cost mine for more than 30 years.

Drilling at Letpadaung has yielded encouraging results, including: hole 9, which intercepted 187.2 metres grading 0.6% copper; hole 15, which cut 106 metres grading 0.83% copper; hole 20, which returned 96.5 metres at 0.39% copper and 100 metres at 0.49% copper; and hole 66, which intercepted 176.1 metres at 0.51% copper.

Hole 74 intersected 240.9 metres at 1.04% copper, hole 76 hit 210 metres at 1.41%, hole 77 returned 214 metres at 0.95%, and hole 80 returned 32 metres grading 1.44% and 154 metres at 0.5%.

A pilot plant has confirmed that heap leaching and solvent

extraction-electrowinning are ideally suited to the mineralized material at Monywa.

Meanwhile, exploration work in and around the complex has uncovered gold mineralization on the flanks of the known copper deposits.

Drilling has also begun at the Swebontha prospect, about 1 km northwest of Letpadaung, where trenches have outlined an epithermal stockwork zone 1,000 metres long and up to 100 metres wide, with gold grades in the range of 1.2-2.3 grams per tonne. Drilling is also scheduled at Swebontha and Kyaukmyet, a high-grade gold and silver discovery 2 km from the Sabetaung pit.

“The discovery of what is, in effect, a golden halo is further evidence that we’ve just scratched the surface of the total Monywa resource,” Flood said.

In other company news, shareholders of Indochina have approved the acquisition of 1.8 million ordinary shares of London-listed Bakyrchik Gold from mining financier Robert Friedland. The company now holds about 26.6% of London-based Bakrychik’s issued and outstanding shares.

Bakyrchik’s principal asset is an interest in a joint venture with the government of Kazakhstan for the Bakyrchik gold project. The deposit has a global resource 47.3 million tonnes grading 6.94 grams gold, or about 10.6 million oz.