TECH CORP Peace in the Valley

British Columbia’s Highland Valley area was one of the worst-hit mining districts in the country when the recession of the early 1980s brought lower metal prices. However, a restructuring of the three big copper-molybdenum mines in the valley seems likely to ensure that copper mining in the Highland Valley will not only survive, but prosper. Teck Corp was indirectly involved in the first step of the re-organization when Lornex Mining and Cominco Ltd. combined their Highland Valley operations in mid-1986. Teck has been a 23% owner of Lornex since 1978 and led a consortium of companies that took over a control position of Cominco late in 1986.

Now Teck says its 50%-owned Highmont mine will be added, consolidating all three of the Highland Valley mines into one of the world’s largest producers of copper concentrate.

Teck owns a 23% share interest in Lornex Mining, a company in which Rio Algom is the major shareholder with 68%. Teck’s interest was acquired through a 1978 merger with Yukon Consolidated Gold Mines which had been a major factor in the famous Klondike gold mining camp. Yukon acquired its interest by financing early exploration of the Lornex orebody in the 1960s, after its last Klondike dredging operation shut down. The Lornex orebody was discovered by Norwegian prospector Egil Lorntzen, working south of Spud Huvestis’ Bethlehem copper property. Egil remains an honorary director of Lornex.

The property was drilled by a number of companies before Rio Algom optioned it in 1965. A decision to build a mine was reached in 1970; and by 1972 a mill with a capacity of 38,000 tons per day was in production. In 1981 the operation was expanded to 80,000 tons per day, making it the largest metal concentrator in Canada and one of the largest in the world. By 1985, with copper and molybdenum prices weak, a decision was made to try to combine the Lornex assets with the nearby Valley Copper orebody of Cominco. Valley Copper is higher grade in copper than Lornex, with relatively little molybdenum. Also, using this ore, instead of Lornex ore, in the Lornex mill would result in a lower break-even price.

Such an arrangement was completed, and since July 1, 1986, the two companies’ assets in the Highland Valley have been merged into the Highland Valley Copper partnership. Lornex has a 45% interest in the partnership.

The Valley Copper mine is now being expanded and crushing and conveying systems installed to transport ore to the Lornex mill. In the meantime, development ore is being trucked to the mill and mining is continuing i n the Lornex pit. The project should be completed by the end of 1987 at a capital cost of about $80 million.

The Highmont copper-molybdenum deposit occurs just southeast of the Lornex mine which, in turn, is just south of the Valley Copper orebody. While the three deposits are probably part of the same epoch of mineralization, there is a regional zoning ranging from virtually all copper at Valley Copper, through primarily copper but with a significant molybdenum component at Lornex, to Highmont where valves were about equally split between copper and molybdenum.

With strong copper and molybdenum prices, the decision was made to put the Highmont property into production in 1979, and construction of a 30,000-ton facility was completed by 1981. Unfortunately this coincided with the onset of the economic recession, which resulted in lower prices for copper and particularly molybdenum. The project was shut down in late 1984 and the mill and equipment placed on a care-and-maintenance basis.

Plans now are to contribute the Highmont mill to the Highland Valley Copper partnership so that production can be expanded. With softer Valley Copper ore, the capacity of the Highmont mill is expected to be about 40,000 tons per day. Highmont is itself a partnership consisting of Teck (50%), an affiliate of Kuwait Investment Office of London (30%) and Metallgesellschaft (20%).