Vancouver-based Canada Tungsten Mining (TSE) has acquired an option to buy and develop the Andacollo copper project in central Chile.
Subject to confirmation of technical details during a 15-month evaluation period, Cantung will acquire 90% of the property from Empresa Nacional de Mineria, a state-owned mining company, for US$5.5 million (in staged payments).
Cantung and Compania Minera del Pacifico (CMP), a large Chilean mining company, plan to develop the project on an ownership basis of 70% Cantung and 30% CMP. CMP has substantial mining operations in the vicinity of Andacollo. The project, dropped recently by Placer Dome, sits 350 km north of Santiago near the port cities of La Serena and Coquimbo, at an elevation of 1,000 metres. Electrical power is readily available.
Previous exploration drilling outlined a preliminary estimate of 39 million tonnes grading 0.94% copper in an enriched blanket of secondary mineralization. This minable reserve overlays a larger porphyry deposit estimated to contain 280 million tonnes grading 0.57% copper and 0.17 grams gold per tonne.
Initial metallurgical testing indicates that the overlaying mineralization is amnable to sulphuric acid leaching using solvent extraction-electrowinning. Cantung envisages spending US$50 million to develop a low-cost, open-pit, heap-leach operation delivering 2.5 million tonnes per year and yielding 37 million lb. of high-grade copper cathode per year.
Production costs are estimated to be less than US55 cents per lb. copper. Startup is planned for 1996. The mine life of the leachable ore is estimated to be at least 15 years.
A study will be undertaken to focus on later development of the porphyry material.
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