Cominco Resources ups reserves at Chile gold mine project

With one gold mine project in Chile slated to begin production in early 1989, Cominco Resources International (TSE) appears to have the makings of yet another still in the wings.

The international mining and exploration company, owned 58.6% by Cominco Ltd., said recently it has increased inferred reserves at the Lobo gold prospect from 7.5 million tons containing 300,000 oz of gold at year-end, to 28 million tons containing 1.2 million oz.

The company said the increase was made as a result of “excellent” intersections obtained from the first 14 drill holes of the 1988 program.

The Lobo property, in which Cominco Resources holds a 50% interest, is located seven km south of the 26%-owned Marte gold project now at the advanced construction stage. The $35-million(US) 9,000 tons per day open pit Marte gold mine is expected to produce 95,000 oz annually using a low cost heap leach process.

Cominco Resources has interests in other prospects in Chile, including a 50% interest in the Valy project located two km south of the Lobo property. The company said exploration to date is demonstrating “good prospects” for the presence of other large tonnage gold deposits similar to those at Marte and Lobo.

Plans call for drilling to continue on the Lobo deposit which remains open for further expansion, both laterally and to depth. President George Tikkanen said the project would require in-fill drilling before a production decision could be considered.

Closer to home, Cominco Resources has completed ore reserve definition on the Main, Upper and Ridge zones at the 60%-owned Kinsley Mountain project in Nevada.

The company said the best results were obtained from the Main zone, which has 1.2 million tons grading 0.054 oz gold, bringing total combined reserves for the project to 2.6 million tons grading 0.046 oz. Exploration drilling is also continuing at the 76%-owned Buckhorn gold-silver mine in Nevada, where revenues of $6.2 million were generated to Cominco Resources’ account during the first half of 1988. Previous work had resulted in the discovery of a new area of gold- bearing sulphide mineralization with values as high as 0.19 oz over 135 ft, and Cominco plans to continue metallurgical test work to design a treatment process for the sulphide ore.

Elsewhere in the U.S., Cominco has become the operator of a new drill program at the Sheep Creek project in which it holds a 50% interest. Earlier this year the company had reported a 24-ft drill interval of 7.4% copper, within a thicker zone averaging 5.7% copper over 41 ft. The new drill program will test for extensions to this mineralization.

The company is preparing for the start of underground work at the high grade Maria copper project in Mexico and is also continuing exploration work, ranging from preliminary reconnaissance to target definition and drilling, on more than 40 projects in the U.S., Mexico, Chile, Brazil, Italy and Ireland, as well as on more recently acquired prospects in Turkey and Botswana.

Cominco Resources reported a loss of $4.3 million or $0.13 per share for the first half of 1988, which the company said was due to its “aggressive exploration program.”