LATIN AMERICA — Bolivia seeks to attract mining investment

International and Canadian aid agencies are attempting to invigorate Bolivia’s beleaguered economy.

The International Monetary Fund has designated the nation “heavily indebted,” paving the way for a greater infusion of financial aid aimed at reducing and restructuring foreign debt. Meanwhile, a program funded by the Canadian International Development Agency (CIDA) and Quebec’s Ministry of Natural Resources (MNR) is designed to attract investors to the country’s mining sector.

Key to the CIDA-MNR program is the implementation of a new geographic information system that will serve to enhance Bolivia’s national geological service. CIDA and MNR will convert data generated by the Bolivian service into digital form, making it faster and easier to use.

“The new system is a modern tool to attract the newcomer,” says Enrique Arteaga, president of the Bolivian Mining Club. “Making information more available allows us to compete better with Chile and Peru, which are more developed.”

In a further attempt to attract foreign investment, the Bolivian government is reviewing its valueadded tax. The mining industry advocates a moratorium on the 13% nominal tax, and several ministries within the government support the proposal. Removal of the tax would require the approval of either the president or the congress.

The cornerstone of Bolivia’s modern-day mining industry is the Kori Kollo gold mine near Oruro. Operated by 88%-owner Battle Mountain Gold (bmg-n), the open-pit mine added 295,000 oz. to the company’s account last year. Ore is processed in a 21,000-tonne-per-day mill. Production this year is expected to fall 15% to 250,000 attributable oz., at an average cash cost of US$205 per oz.

Meanwhile, there are a smattering of exploration companies still active in the country.

• Apex Silver Mines (SIL-X) — This Denver-based company is in the final stages developing the San Cristobal silver-lead-zinc deposit in southwestern Bolivia. A final feasibility study is expected by mid-year.

  The project contains reserves of 509 million oz. silver within 259.5 million tonnes grading 69 grams silver, 1.57% zinc and 0.55% lead. At 40,000 tonnes per day, the operation is expected to produce, on an annual basis, 22 million oz. silver, 191,400 tonnes zinc and 54,400 tonnes lead.

  Apex expects to secure the necessary financing by year-end, with construction slated to follow in early 2000. Startup is projected for 2002.

  A new rail line joining Bolivian lines with the port of Iquique in northern Chile will enable the company to transport concentrates to the coast for shipment to Asian, North American or European smelters.

• Orvana Minerals (ORV-T) — Vancouver-based Orvana is developing underground workings for what will be the Don Mario gold project in Santa Cruz province. A final feasibility study is being prepared, and production is scheduled for the first half of 2000.
• RTZ (RTP-N) — Bolivia’s largest private miner, Compania Minera del Sur, is developing the Puqio Norte deposit, 130 km north of Santa Cruz. The company is 30%-held by London-based RTZ and is expected to produce between 25,000 and 30,000 oz. annually.
• Vista Gold (VGZ-X) — The company hopes to announce a production decision at the Amayapampa gold project soon, provided it is able to raise the necessary funds.

  Construction costs are pegged at US$26 million, including working capital and a 20% contingency, and the operation is expected to crank out 50,100 oz. gold annually at a cash cost of US$147 per oz. in the first five years.

• Broken Hill Proprietary (BHP-N) — The Australian major has begun drilling at the Pederson gold project, which is jointly owned by Orvana and its Bolivian partner, Empresa Unificada. The project is east of Lake Poopo on the Altiplano.
• Corriente Resources (CTG-T) — In the southern Altiplano, near the Argentina border, Vancouver-based Corriente is evaluating the Tasna bismuth-copper project for its gold potential.

  Recent mapping has focused on an area of intersecting faults at the top of Cerro Tasna. The company traced a zone of quartz brecciation, which corresponds to a magnetic low, cutting across the hill for 1,000 metres.

  Corriente had planned to drill this zone, measuring 600 by 300 metres, from the surface until it located an old tunnel into the hillside. The tunnel extends past the bismuth workings within 100 metres of the gold target. Gold grades within the tunnel show an encouraging increase in value toward the target. Four zones of gold mineralization were found to contain values as high as 30 grams per tonne.

  The company likens the Tasna project to the Pogo gold project in eastern Alaska, where gold mineralization is also associated with bismuth. Tasna also has significant silver and tungsten mineralization.

• Eaglecrest Explorations (EEL-V) — This Vancouver-based junior has resumed exploring the San Simon gold project in northeastern Bolivia, near the border with Brazil.

  New management, which took over in May 1998, has embarked on a $570,000 program of mapping and sampling aimed at confirming results from prior programs. The company also expects to drill 1,500 metres of core to test for a bulk-minable target. Eaglecrest is financing this work through a $1.2-million private placement.

• Silver Standard Resources (SSO-V) — The company is evaluating results of a prefeasibility study on the El Asiento silver project in southern Bolivia. To date, Silver Standard has completed four phases of drilling totalling 4,872 metres.
• Essex Resource (ESX-T) — Vancouver-based Essex has succumbed to lower commodity prices and shut down activities at its Santa Cruz volcanogenic massive sulphide project in eastern Bolivia.

  Prior drilling had identified copper and gold mineralization over a strike length of 550 metres.