TVX adds Chilean mine to portfolio

Toronto-based Consolidated TVX Mining has just added to its Latin American precious metal portfolio by acquiring a stake in a Chilean gold/silver prospect from Consolidated Goldfields.

Already Brazil’s second largest gold producer, tvx says the acquisition of La Coipa gold property was made by Compania Nacional de Mineria, a Chilean mining company in which tvx holds a 49% interest.

cnm is controlled by tvx Chairman Eike Batista and partners but he recently agreed to exchange his 49% interest in the Chilean company for an equity stake in the tvx.

Under the agreement, tvx will issue one treasury share (to a maximum of 22 million shares) to Batista for every $24 in net profits earned from the project, once production has begun.

Located 1,000 km north of Santiago, the La Coipa property was developed to a feasibility stage by Goldfields after it had completed a 75,000-m drill program.

But a land work dispute involving over 40 law suits, persuaded the world’s largest gold company to sell the property in exchange for a small royalty interest.

An independent audit says the 30,000-acre property contains proven reserves of 49 million tons grading 0.09 oz per ton of gold equivalent. Those reserves include 10 million tons of 0.2 oz and over one million tons of 0.5 oz, the study says.

According to tvx, that adds up to almost 5 million oz and since the deposit is open at depth with parts of it open on two sides, the Toronto company says, exploration could add to the reserve figure.

Production at La Coipa is expected to begin in early 1989 at a rate of 140,000 oz annually. Reserves will be mined from surface using agitation leaching techniques.

President Ian Telfer says the open pit project will become one of Chile’s largest gold mines when production rises to around 400,000 oz annually in 1991. Under the agreement, tvx gets 50% of production while Goldfields retains a royalty interest to a maximum of $2 million. With a $60-million(US) financing loan, tvx says it is financially equipped to make the acquisition and install a 1,100-ton-per-day plant by 1989. Future plans also include the construction of a much larger 16,500-ton-per-day plant by 1991.

As reported (N.M. July 6/87) tvx’s share of production from four Brazilian gold mines and five exploration projects was expected to be 192,000 oz in 1987.

The company also holds a 20% interest in Golden Shield Resources of Toronto which acquired the old Kerr Addison mine at Virginiatown, Ont., last year.