Musto seeks partner for Argentine play

Having completed the feasibility study on its Bajo de la Alumbrera deposit in northwestern Argentina, International Musto Explorations (TSE) is seeking a partner to help develop the US$550-million project.

Alumbrera, about 1,000 km northwest of Buenos Aires, has been described as a textbook example of a copper porphyry deposit. It lies within the Tertiary-aged Farallon Negro volcanic complex. Intruding into the complex is a series of comagmatic, potassic-enriched dacite porphyry stocks, two phases of which carry economic concentrations of copper and gold.

Highlights of the feasibility study are as follows:

* Ultimate minable reserves using a 0.2% copper cutoff are 494 million tonnes at 0.53% copper (5.8 billion lb.) and 0.68 grams gold per tonne (10 million oz.). The orebody remains open at depth and to the southwest. Recent resampling of prior drilling has indicated an increase of 5% in the copper grade and 3% in the gold grade.

* Reserves were calculated on the basis of 119 drill holes totaling 27,700 metres.

* The deposit will be mined via open pit at 60,000 tons per day for 20 years. During the first 5.5 years, ore will be mined from two starter pits, yielding about 470,000 oz. gold and 280 million lb. copper per year. (Subsequent annual production is estimated at 250 million lb. copper and 360,000 oz. gold.)

* Operating costs over the life of the mine, excluding royalties, are $250 per oz. gold and 49 cents per lb. copper. Royalties include a 20% net profit interest payable to YMAD (the property vendor), after the recovery of all investment and interest, and a 3% net smelter return payable to the state of Catamarca.

* Ore will be milled on site to produce a concentrate containing 27% copper and one ounce gold per tonne. Metallurgical testing indicates recoveries of 91% for copper and 70% for gold.

* The concentrate will be transported via a 56-km slurry pipeline to Andalgala. The concentrate will then be transported 1,140 km by rail to Rosario on the Rio Parana river. Here, it will be loaded on boats for shipment to smelters in Brazil, Europe and the Far East.

* Capital costs (excluding working capital) are estimated at US$550 million. Development is expected to take about three years, with production forecast to begin in late 1996.

At a recent gathering of financial analysts in Toronto, Musto President Lukas Lundin said “we are looking to sell a 50% interest in the deposit.” He went on to explain that about 20 companies have shown an interest and that he expects at least 10-12 majors will tender bids by the Jan. 21, 1994, deadline.