Placer updating Zaldivar study

An updated feasibility study for development of Placer Dome’s (TSE) 50%-owned Zaldivar copper property is to be completed by early July.

Situated in the Atacama desert of northern Chile, Zaldivar is estimated to contain near-surface reserves of 1.1 billion tons grading 0.57% copper at a cutoff of 0.2% copper. This includes a higher-grade zone of 290 million tons grading 1.16% copper at a cutoff of 0.7% copper, an important feature for any company interested in rapid payback of capital costs. Zaldivar is also expected to be a low-cost producer, as it is largely amenable to a leaching, solvent extraction-electrowinning (SX-EW) method.

Placer Dome acquired its interest late last year from Outokumpu Copper Resources B.V. for US$100 million. It agreed to provide loan financing of up to US$400 million toward the estimated US$500-million capital cost of constructing a mine and treatment plant.

The agreement provides a good return on investment for Outokumpu, which is reported to have bought the project from a Chilean company for US$25 million in 1989. But the Finnish major also spent another US$5 million on exploration, thereby doubling reserves.

If a development decision is made, Placer will take the lead in designing and building the open-pit mine and plant while Outokumpu will be the long-term marketing agent for the entire production. If all goes as planned, production would start in 1995.

Although the feasibility study will define mining plans more precisely, a plant production capacity of more than 100,000 tons of copper per year and a mine life of at least 20 years are envisioned. Production costs are expected to be in the lower one-third of world copper production costs. Zaldivar has an airstrip and is also served by a rail line which links the project to the port city of Antofagasta. A paved road to Antofasta is nearby and serves the neighboring Escondida copper mine.

Securing a water source may not be a problem in British Columbia, where Placer Dome has operated large mines for decades. But it can be problem in Chile, particularly in the arid Atacama desert. As a solution, Placer plans to build a pipeline to a water source some 100 km from the mine site. If all goes as planned, Zaldivar would be one of several large-tonnage projects being developed as SX-EW operations in Chile. SX-EW has been used commercially in copper mining since the late 1960s, but only lately has its full potential come to light. The process bypasses high smelter fees and offers many other advantages over conventional milling, smelting and refining, including low-cost copper cathode production in the order of US30-60 cents per lb., lower capital costs and less environmental pollution. Placer Dome has previous experience with this technology, which is used at the Gibraltar copper mine near Williams Lake, B.C. The major owns 68.1% of Gibraltar Mines (TSE) which has operated an SX-EW plant to produce cathode copper since 1968. Feed comes from oxide portions of the copper deposit as well as from oxidized dumps of lower-grade material. The bulk of Gibraltar’s production, however, is from a 38,000-ton-per-day conventional mill processing open-pit sulphide reserves to produce a copper concentrate.