Cominco Resources’ Gold Projects Advance

Ore reserves were increased on two gold projects, and a feasibility study started on a third, reports Cominco Resources International (TSE) in a review of operations for the nine months ended September 30. During the period, the company’s share of production from the 76%-owned Buckhorn mine in Nevada was 15,500 oz of gold and 81,000 oz of silver, which provided mining income of $1.5 million.

The company owned 58.6% by Cominco Ltd. (TSE), said exploration at the 70-sq- mi Buckhorn property “more than maintained” ore reserves, despite the mining of over 1.2 million tons since the project was acquired in April, 1987. Indicated and inferred oxide ore reserves are now reported to be 1,435, 000 tons grading 0.053 oz gold per ton.

Further afield, construction continued on budget at the company’s 26%-owned, Marte heap leach gold mine in Chile.

The operation is expected to begin production (95,000 oz per year when up to capacity) in the second quarter of 1989.

Drilling is continuing on the nearby 50%-owned Lobo gold prospect where inferred reserves were increased to 33 million tons containing 1.4 million oz of gold. A prefeasibility evaluation of the deposit, including some metallurgical testing, is in progress.

The 60%-owned Kinsley Mountain gold project in Nevada is at the feasibility study stage and mineable reserves are now reported to be 2.6 million tons grading 0.046 oz gold per ton. If the feasibility study is positive, the company said a production decision might be possible in early 1989, with its share of production (12,000 oz per year) starting in 1990.

Although its exploration mandate emphasizes gold, Cominco Resources also has a number of base metal situations, including the 50%-owned Sheep Creek copper project in Montana. Results of a program to explore for extensions to the deep high grade copper mineralization encountered earlier were mixed with two of four recent holes intersecting mineralized sections grading 6% and 8% copper over 23 ft and 8 ft respectively.

The company said the high grade Maria copper project in Mexico is on hold, pending acquisition by the company’s 51% partner of necessary surface rights for the mine portal. Cominco Resources plans to drill a 20-million-ton deposit grading 0.6% copper that it owns in northern Mexico, which is suitable for low- cost solvent extraction- electrowinning copper production.

Earlier stage exploration work continued on various gold and base metal properties in the United States, Mexico, Ireland, Turkey and Botswana. However, the company terminated activity in Brazil following the introduction of the country’s new constitution with its restrictions on foreign ownership in the mining industry. To date, the company has spent about $10.5 million on exploration worldwide.

Cominco Resources reported a loss of $7 million for the year to September 30. Early in October, the company obtained a gold loan of about 14,000 oz to fund its contributions ($4.8 million) to the Marte gold mine. The gold had previously been sold forward at $437 (US) per oz. If this transaction had been completed before the end of the quarter and included in those financial statements, the company said cash at the end of the period would have been $29.2 million.