LATIN AMERICA — General moves Vizcachitas to feasibility — Combined mill and SX-EW project to cost US$276m

Undaunted by the loss of a partner in developing its Vizcachitas project in central Chile, General Minerals (GNM-T) has announced it is going ahead with a bankable feasibility study.

An initial feasibility study, delivered by Kilborn International, concluded that daily production of 30,000 tonnes of millable sulphide ore and 30,000 tonnes of leachable sulphide-oxide ore would be economically feasible at a break-even copper price of US73 cents per lb. (US$1,610 per tonne).

The study comes only shortly after Boliden (BOL-T) announced it was pulling out of the project, which it had inherited in its taekover of Westmin Resources (T.N.M., Aug. 10/98). Westmin had earned a 51% interest in Vizcachitas under an option agreement with General.

Kilborn estimated capital costs of US$276 million, of which US$171 million were direct capital costs. Total cash production costs (including transportation, smelting and refining) would run US60 cents per lb. over the life of the project. During the first four years of operation, exploiting higher-grade reserves would keep the unit cost down to US57 cents per lb., allowing for a payback period of four years if the price of copper were to rise to US90 cents per lb.

The project showed a 20% rate of return at a copper price of US$1, which falls to 14% if the price is reduced to US90 cents.

Kilborn indicated in its study that the best economics may be achieved by producing at a higher rate than the feasibility study had tested. Kilborn, which examined production rates of 20,000, 40,000 and 60,000 tonnes, found the project’s numbers improved at higher production rates. In all three production scenarios, equal amounts of millable and leachable ores would be produced.

Vizcachitas has a resource of 1.1 billion tonnes grading 0.42% copper and 0.014% molybdenum, based on a cutoff grade of 0.3% copper. Slightly more than half of that resource is measured or indicated.

The feasiblity study used a minable reserve figure of 170 million tonnes of sulphide ore grading 0.58% copper and 0.016% molybdenum, plus 205 million tonnes of leachable ore grading 0.34% copper. Molybdenum would not be recovered in the leach operation. The designed pit included 199 million tonnes of waste rock, giving a stripping ratio of 0.53-to-1.

The pit, as designed, would have a mine life of 17 years at a daily production rate of 60,000 tonnes. Annual copper production would average around 74,000 tonnes.

More drilling is planned, with the intention of bringing more high-grade material into the early stages of the pit.

Metallurgical tests at Lakefield Research, while still preliminary, showed good recoveries from conventional flotation. Leaching tests on the sulphide-oxide mineralization (a mixture of chalcocite, chalcopyrite, and copper oxides, principally covellite) yielded recovery figures between 26% and 62%. More metallurgical testing is scheduled for September.

The feasiblity study assumed the mill would produce a copper-molybdenum concentrate that would be separated in a final on-site flotation circuit before being shipped to a smelter. Leachable material would be processed using solvent extraction and electrowinning to produce refined-grade copper on site. The feasibility study used preliminary recovery figures of 93% for copper and 60% for molybdenum from the sulphide ores, and 50% for copper from the leachable ores.

For the final feasibility study, General is planning geotechnical, hydrological and environmental studies as well as the drilling and metallurgical work.

General Minerals reported working capital of C$16.1 million, including cash and short-term investments of C$16.4 million, at the end of the second quarter of 1998. Short-term payables brought the working capital figure below the figure for cash on hand.

The company reported a loss of C$1.4 million for the first six months of 1998, compared with a C$1.1-million loss in the first half of 1997. General’s chief expense is exploration.